The cost of bringing a new baby home is significant. There are medical bills to pay, a cot and related furniture to procure, baby clothing, maternity needs, and the weekly supply of nappies, formula, baby foods and other goods required.
Then there is the $2 million less in lifetime earnings that the average 25-year-old woman today who goes on to have one child can expect when compared to the average 25-year-old man who also enters parenthood, according to analysis based on current work trends.
A woman’s earnings are reduced by 55 per cent on average during the first five years of parenting her child. As for new fathers? He can expect his earnings to remain unaffected.
The above figures were some of the more startling data points outlined in the 10-year plan unveiled yesterday by the Women’s Economic Equality Taskforce to “unleash the full capacity and contribution of women to the Australian economy.”
Addressing the ‘motherhood penalty’, alongside penalties applied to women who take on both informal and formal care roles, is critical to reducing economic inequality in Australia.
And considering the massive drop in earnings a new mother experiences is just the start in calculating the full price she will pay.
Mothers will also contend with childcare costs and a system of subsidies that disincentive her from taking on a fourth or fifth day of employment, or even pursuing early childhood education at all. While childcare fees should be a shared and family cost, mothers often take it on – either directly by paying it from their own salary, or indirectly in reducing childcare days and limiting work. The Albanese Government’s childcare package has sought to reduce some of these out-of-pocket costs – but it doesn’t change the long-term impact on the financial and career opportunity prospects of women who were disincentivised to work in the past, with 90,000 Australian parents reporting they stayed out of the workforce in 2020 due to the cost of childcare, according to a 2021 Productivity Commission report.
Women will also find their access to paid work limited by other factors – their time and energy among them, with women spending 30.2 hours a week on unpaid care and housework, compared to 21.8 hours a week for men.
And once again, there are stark differences in the impact of unpaid work and workforce participation between mums and dads. ABS data reveals that mothers spend an average of three hours and 34 minutes participating in childcare activities daily, compared to two hours and 19 minutes for fathers. The 2022 ABS Time Use Survey also found that women aged 35 to 44 were the most likely group to report “always or often feeling rushed for time” – with a massive 55 per cent of those in this age group doing so.
Women head up more than 8 in 10 sole-parent households – and a massive 37 per cent of these households are living below the poverty line, according to a 2020 UNSW/ACOSS report on Poverty in Australia. The figure drops dramatically to just 18 per cent for sole-father-headed households. As advocacy groups share, many more such families don’t meet the “below the poverty line” definition but are struggling daily with financial hardship.
Meanwhile, women (those with and without children) will go on to take on the majority of casual and insecure work and the vast majority of the formal care work – in industries like early childhood education, aged care and nursing that continue to be shockingly underpaid and undervalued, and yet continue to face significant skill and worker shortages, and are identified as key jobs of the future.
A further cruel twist on economic inequality for the future of mothers and women generally in Australia will come via the Stage 3 tax cuts, which are still slated to occur from mid 2024. The tax cuts predominantly benefit the wealthy and those in higher-paying and full time jobs (eg, not in care-related fields which are dominated by women). Men will benefit far more than women here, taking $2 for every $1 that women benefit from the tax cuts. As the analysis from The Australia Institute finds, the changes as slated will only worsen gender inequality, and we can then assume that this will also worsen the motherhood penalty.
The motherhood penalty is real in Australia and a significant contributor to why women over the age of 55 have become the fastest-growing cohort of those entering homelessness. It is also why so many mothers see the qualifications and experience they have worked so hard to achieve fall by the wayside as they find little choice but to step out and stay out of the workforce, or find themselves unable to pursue the career and jobs they may have otherwise pursued due to inflexible hours and lack of promotions available to those working flexibly and part time.
The lost earnings of motherhood, the gender pay gap, lost superannuation during periods of paid and unpaid parental leave as well as reduced super payments during periods of part-time work – all compound to impact retirement and superannuation savings later on.
And all of it contributes to overall economic inequality for women. It is women who take on the bulk of the unpaid care work for children, those with disabilities and the elderly. It is women take on the bulk of the underpaid formal care work. And women who then carry the financial consequences of decades of contributing to the most important and essential work that can and will ever be done.
And yet the economic inequality is so “normalised” that we are led to believe it’s merely just the cost of choosing to have a baby, or choosing to care.