The gaping holes in Labor’s 20% pay boost for childcare workers
Published by The Sydney Morning Herald, Thursday 2 May
Labor has attracted favourable headlines by promising to boost wages for underpaid childcare workers. But how much will this policy really benefit the workers it is designed to help?
Labor says it will spend $10 billion over the next decade to increase childcare workers’ wages by 20 per cent. For government to “top up” pay for privately employed workers is highly unusual. There is precious little detail in the Labor announcement about how this will work. There are many questions to be answered.
Will government money simply fund pay increases that would have happened anyway? Labor has said that its increase will be in addition to any pay rise employers agree with their workers. Employers may need to pay more in future as demand for childcare services grows. Will employers simply hold back on offering any pay rises and let the government pick up the tab?
Are such payments constitutionally valid? If the payments are made directly to childcare providers and are not direct subsidies per hour of childcare, are they still “family allowances” and if not does the Commonwealth have constitutional power to make them?
Will the government permanently contribute to wages of these workers? The current policy sets out a timeframe to boost wages over eight years, but what happens beyond that will be crucial if higher pay is to be sustained. If future governments don’t support the policy will these workers face a future wage cut?
All this is before you even get to the precedent the Labor policy sets. Aged-care and disability workers were understandably quick off the mark to ask why they weren’t being extended the same treatment.
A previous attempt by the Gillard government to top up childcare worker wages via a grants program was substantially underfunded, and the Audit Office heavily criticised the operation of the scheme before the Abbott government redirected the money to staff training.
None of this is to quibble with the policy objective. Childcare workers are poorly paid. Workers with a Certificate III make as little as $22 an hour, which isn’t much higher than the minimum wage and is less than half the average full-time wage. Very few are paid above the award rate. Childcare workers in Queensland say they must rely on supplementary income – such as being supported by a partner on a higher salary – to afford life’s necessities.
Caring for children and helping them develop is no easy task. It is hard work mentally, emotionally and physically. The fact that qualified childcare workers make less than staff at McDonalds or people in retail seems an anomaly.
It’s likely that low pay rates in the childcare industry are at least partly the result of gender biases. Industries with high shares of female employees tend to be lower paid. About 94 per cent of childcare workers are female. But proving that gender inequality is difficult.
Last year, United Voice lost a five-year, $1 million legal battle at the Fair Work Commission to increase childcare workers’ wages by 35 per cent. The union compared wages in the manufacturing and care work industries to argue that men are paid more than women for analogous work.
Fair Work rejected the case, arguing the union didn’t provide enough evidence that the manufacturing industry is a reasonable comparator.
But the Commission left the door open to a more conventional work value argument – that work of the same value should be remunerated equally.
Labor has already announced a suite of policies to empower the Fair Work Commission to address pay disparities in sectors with a high proportion of female workers. Under the proposed changes, pay equity would become a key objective of the industrial relations system under the Fair Work Act.
Labor has also pledged to create a new presidential role within the commission to conduct pay equity reviews, with support from a pay equity panel and a research unit.
Why not wait for these to take effect? These are certainly a more conventional and sustainable way to tackle the problem of low wages for care workers.
It doesn’t mean the government is off the hook financially. The government would have to fund part of the cost of any award increase through higher childcare rebates if the centres put up fees. But at least it leaves the question of appropriate wage levels in the hands of the independent umpire, rather than tying the remuneration of a whole sector to the political whims of the day.
Fair pay for Australia’s childcare workers has been a long time coming. This issue and those workers deserve a better and more detailed policy response than Labor’s most recent headline-grabbing promise.