The pe¯p¯ı penalty

Women take a $116m hit every year from a lack of access to childcare, writes

Like so many parents seeking more for their children, Renata Kotua moved out of Auckland for her career and what she hoped would be a better lifestyle.

What she didn’t expect was to spend the next five months bringing her baby to conferences, staying up till 2am finishing projects, and scheduling meetings for when her child slept.

‘‘I feel like I’m barely keeping my head above water, I’m just scraping by all the time,’’ says Kotua, who is now packing for the move back to Auckland.

Kotua contacted 14 childcare providers when she moved to Palmerston North in April with her then 10-month-old, Martha. As a single mum, she needed to work to pay for the cost of living for her and her two children, and because she wanted to; she was offered a good job at a decent salary.

There was no space at the high-quality daycares. ‘‘Everywhere that looked nice and decent and clean and dry and the kids were happy [had] long waiting lists.’’

At others, she wouldn’t have felt safe leaving her baby. When she googled one, she found a child had died there.

Finally, a centre offered her two school days and a half day, a total of 16 hours at $119 a week, or $7.40 an hour. That was a high price, and it wasn’t enough time to cover her work week of 32 hours. But she took it, because she had no choice.

She’s coped – just – by working in shorter, productive bursts, distracting her baby with toys, and working while Martha sleeps, day and night. ‘‘I have a home-based office, but having a little one with you at home just wreaks havoc.’’

Kotua says she is ‘‘lucky’’ to have a boss who understands, and who has now agreed to let her work from Auckland, where she can be closer to family, and has more childcare options.

But not everyone does. The juggle is real, and new research places monetary value on the severe restrictions placed on women’s lives by not being able to find and afford childcare.

A series of studies undertaken for the Ministry for Women shows New Zealand women who want to work are missing out on an estimated $116 million a year because of barriers to accessing childcare.

It found the system doesn’t work for at least half of all women, and it’s worse for those on low incomes and Mā ori, Pasifika and disabled women.

The estimated impact includes only women with kids under 3.

‘‘The true figure is likely much higher,’’ says study author Isabelle Sin, of Motu Research. ‘‘Access to childcare has material consequences for mothers’ work.’’

‘The motherhood penalty’

Minister for Women Jan Tinetti says the figure is ‘‘extremely horrific’’. She has ordered a review of policies to see what needs to change.

‘‘Care is very much a gendered issue and it really does impact upon women’s participation in the labour market.’’

Tinetti’s review will include looking at the chasm between paid parental leave ending, when a child is 26 weeks old, and the start of significant childcare subsidies of 20 hours when the child is 3.

‘‘In that gap do we provide childcare assistance lower than 3, or extend paid parental leave? That’s the question we are asking – what will make the biggest difference for women?’’ Tinetti says. ‘‘The motherhood penalty does exist.’’ She expects the analysis to be complete within three months.

Not enough support

Caring for children has typically been considered women’s work, with no dollar value attached. But the importance of who looks after children, how hard it is, and what that means for paid work was thrown into relief by Covid-19, when parents realised doing both was almost impossible.

It’s being increasingly understood that getting provision right is critical to the economy – and lack of access is perpetuating gender inequality.

For her research, Sin used the Growing Up in New Zealand longitudinal data of 6846 children to identify mothers who said they wanted to work when their children were 9 months and 2 years old, but couldn’t because of childcare access issues. They were compared again at 41⁄2 years old, when nearly all mothers were in paid work.

She found 8% of all mothers couldn’t access childcare, with Mā ori and Pasifika mothers finding it more than twice as hard and struggling for longer, with issues persisting past two years, along with poor and less educated mothers.

‘‘There are large numbers of women with kids under 3 who aren’t working when they want to be, and the reason they aren’t is childcare,’’ Sin says.

‘‘Cost is a big one, but a whole range of barriers were reported, which suggests there’s no one solution for these problems.’’

Mothers are missing out on an average $2660 every month when their child is 9 months old, and $3500 each month when they’re aged 2.

Outside of paid parental leave and the 20 hours subsidy, Work and Income childcare subsidies are available for low-income parents – but many mothers don’t know about these, or find the bureaucratic process too hard, Sin says.

Reasons other than cost include a lack of space, childcare not being available in work hours, and transport difficulties. These women often end up leaving work or making do with precarious or unsuitable childcare arrangements, the study found.

‘Antiquated’ system

After having her first baby, now 26 months, mum Melissa despaired at how they were going to afford childcare and work.

When she and her husband finally found childcare in Wellington – where more than 66 per cent of places have a waitlist, the worst in the country – it was $85 a day, or $660 a fortnight. ‘‘I couldn’t afford it on the salary I was on, I went back to work when she was 5 months old and then had to get a promotion before she turned 1 to pay,’’ Melissa says.

Her husband stayed home with their baby when her 26 weeks’ paid parental leave ran out, and their baby went into fulltime childcare aged 1. They found a new daycare at $605 a fortnight, with no significant subsidy until she’s 3.

‘‘This whole system is set up so there’s a primary caregiver. It’s expected one person will be at home and one at work.

‘‘Either you have to go back to work fulltime because it’s so expensive to have a kid, or you don’t go back because you can’t cover the cost,’’ Melissa says. ‘‘If their goal is to support all children, this isn’t achieving it.’’

Women are more likely to be primary caregivers, and re-entering the workforce can have long-term effects on their careers. When they do go back to work there’s a ‘‘motherhood penalty’’ – of an average 4.4 per cent drop in hourly earnings. Including the gender pay gap over a lifetime, they are expected to earn $880,000 less than men.

When the 20 hours free ECE policy was introduced in 2007, the aim was to remove financial barriers to childcare and provide universal access for over-3s.

But the workforce patterns it was based on are long gone. The labour force participation rate for women has risen by 50% since 1986, and they are returning when their babies are younger. While the employment rate for women is above the average for Western countries, they are more likely to work in precarious and underpaid jobs, be affected by unpaid work demands, and have been hit harder by Covid-19.

Auckland University of Technology associate professor of employment relations Katherine Ravenswood says women are still expected pick up the burden of care, and not be rewarded for it.

‘‘It’s this 1950s idea of women, these really discriminatory gendered ideas that all they do is reproduce and look after their children and husbands for free. That also explains why we don’t pay early childhood educators properly, because it’s care work of little children, it’s women and we don’t think it’s hard.

‘‘These underlying currents are that still, at base level, we don’t value women.’’

There is a ‘‘massive gap’’ between parental leave – paid at less than the minimum wage – and the start of the ECE subsidies compared with other developed countries, she says. ‘‘We have a bad mix in wanting to have as little regulation as possible around employment, and not valuing women . . . and what they do as ECE teachers or as parents. It’s a really nasty ideological hellhole.’’

Going it alone

For many single parents, going back to work is a pipe dream.

‘‘A lot of my single mums want to get back to work for peace of mind, because it’s relentless looking after children, but it’s so expensive it’s impossible to,’’ says Beneficiaries Advocacy and Information Service manager Karen Pattie. ‘‘Childcare is the biggest hurdle.’’

If they can find work and childcare, sometimes the difference between that and the benefit is negligible.’’

Parents who are already working may qualify for a Work and Income childcare subsidy, but Pattie says applying can be a complicated process. ‘‘It’s a logistical nightmare.’’

(The Ministry of Social Development could not provide data on average processing times, but says most applications are processed within a week.)

Kotua qualifies for a subsidy, and says this helps to reduce her childcare by $40 a week. But this has been more than cancelled out by the debt she has incurred with MSD to help her move cities.

Still, she’s trying to be pragmatic – at least she still has a job.