Motherhood penalty costs Australian women $876K over her lifetime

The motherhood penalty costs the average working woman in Australia $876K: New report

Australian mothers fall behind their global peers in regard to workforce participation when they have children and never catch up. This is despite starting at the top of global standings on education levels.
Motherhood penalty

There is not a country in the world where ‘the motherhood penalty’ doesn’t conspire against women with children. In every country, to varying degrees, having a baby erodes the capacity of women to develop and maintain economic security and to participate and progress at work in the same manner as their male peers.

This gap is costly from a social and economic perspective, at an individual and collective level. It relegates too many women and children into financial insecurity and poverty, entrenches inequity, limits the ability of women to realise their potential and hampers national productivity.

While the motherhood penalty persists everywhere, among developed countries few have done as little as Australia to tackle it.

Back Of The Pack 2021 Equity Economics for The Parenthood

Since 2006 when the World Economic Forum published its first Global Gender Gap Index Australia has consistently held the number 1 rank for the educational attainment of women and girls. There are few nations in the world that guarantee girls and women access to education as consistently as Australia. That ought to be a source of pride. 

But while we have retained the top rank for educational attainment, when it comes to economic participation women in Australia lag their global peers. Back in 2006 we ranked 12th for women’s workforce participation but since then we have steadily slid backwards and in 2021 Australia fell to 70th on this measure.

This chasm is unusual because generally education and workforce participation track together, but it’s not inexplicable. It reflects two things. First, that other countries, by intentionally pursuing policies to reduce gender equity, have overtaken Australia in their efforts to close the gap between the working patterns of men and women.  

Second, that our parenting policies make it more difficult for Australian women to continue working after having a child. Once a woman in Australia has a child, her workforce participation drops below her global peers and she never catches up. 

This is the reason Australian mothers, who are better qualified and educated than their peers in other developed nations, are more likely to be in part time work than mums in those other countries. 

Sweden is well regarded as a world leader in terms of parenting policies. Before women have children, women in Australia participate in work to a higher degree than women in Sweden. After the birth of a child the pattern changes. 

Economic modelling by Equity Economics in Back of The Pack – How Australia’s Parenting Policies are Failing Women and Our Economy, a new report commissioned by The Parenthood, shows that if an average Australian woman had the same workplace participation patterns after having children as an average Swedish woman, she would:

·  earn an additional $696,000 over her working life; and

·  retire with an additional $180,000 in superannuation.

When you consider that the average super balance of an Australian woman aged between 50 and 54 is $157,124, that additional $180,000 in super alone is radical and would dramatically change the picture for women in retirement. Because let’s not forget that women over 55 remain the fastest growing group of Australians experiencing homelessness, a shocking situation that will never change without structural intervention to enable women to more consistently participate in paid work over the course of their working lives.

An additional $696,000 in earnings for the average working woman – and her family – would be similarly transformative because it represents financial security and independence. Being able to attain financial security ought to be a baseline but it is practically a luxury for women in Australia – despite being well-educated, qualified and wanting to work.

Financial security doesn’t elude women because they’re lazy or not contributing. It eludes women in Australia because they remain structurally disadvantaged when it comes to their ability to participate in paid work. The price women pay – individually and collectively – for financial insecurity is devastating. From poverty to housing stress to violence to uncertainty, to fear.

Where to from here

The gap between working patterns of women in Australia and Sweden is not intransigent. Mums in Sweden aren’t able to work and earn more over the course of their lives than mums in Australia by accident. It’s a direct result of Sweden’s ambition and efforts to provide the necessary infrastructure for families to ensure that mothers and fathers are able to equitably and sustainably combine work and care.

Adequate and equitable paid parental leave and universal access to quality early learning and care are the “bridges and roads” that enable parents to be there for their children and provide for their family. 

Without them, parents, carers and children are stranded trying to build their own roads and bridges to get between home and work. You can’t go to work if you don’t have a road to get there. You can’t go to work if you don’t have an affordable and safe place for your child. We don’t expect commuters to create their own train lines or bus systems to get into the office but that’s what parents and carers are expected to do day after day.

Parents and carers are forced to piece together a patchwork arrangement that does the job but is very difficult. For many, it’s impossible. And it’s mums who pay the price. 

It is time for Australia to invest in expanded paid parental leave and universal access to high quality early childhood education and care. In doing so Australia will be investing in dramatically improving the economic and social wellbeing of women, children and the nation’s future. 

It is time to bring Australian mothers to the front – not the back – of the pack.

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