Future of Work and Public Policy
Commissioner Pru Goward
7.30am, 17 July 2003
COMMONWEALTH HEADS SENIOR EXECUTIVE
BREAKFAST SEMINAR
Parmelia Room,
Parmelia Hilton,
14 Mill St
- Thankyou to the Senior Executive Group for inviting me to speak today, it is always a pleasure to be in your beautiful city .....and after an absence of a couple of years, good to be able to address this group again.
- As a rule, I'm not sure how wise it is to address breakfast functions. After all, breakfast is immediately preceded by sleep, which in turn is preceded by a period of late night reading.
- Late night reading is all those interesting books that come along in my area, like Wife Work, by Susan Maushart, or Work Life Collision, by Barbara Pocock.
- As you can imagine, I travel a lot and I have to make sure I don't read them at home. Because there is nothing less conducive to a pleasant evening than a few pages of soul-ripping Wife Work, or the equally distressing Pocock book.
- Indeed, whatever time of day you read them, you are guaranteed to fall into a black abyss of silent rage. It is all just so unfair and so dangerous!
- I have actually told Barbara Pocock that there were chapters of her book I could not finish reading, it was so like reading about bits of my own life I had tried hard to forget.
- But I recommend each of them to you, not to blacken your breakfast mood, but because they are such graphic illustrations of all the lifeless and painless socio-economic statistics we as policy planners see continuously rolling under our noses, and because they help explain why those painless statistics actually represent an imperative.
- I have to say it was the accounts I heard from individuals about the difficulties of combining work and family which has informed my commitment and driven my passion for paid maternity leave.
- It is very difficult to persist with calling for the recognition of social change if you can't picture it.
- More recently I have been forced to conclude that the nature of federal politics, the away-nature of parliamentary life, is not assisting Australia to grapple with the work and family debate.
- The tyranny of distance has forced federal parliamentarians to live lives remote from the rest of us.
- In the work and family stretch, they are a long way behind most of us. They don't see their children, they don't often even prepare their own food, mowing lawns is a bit of a luxury, taking their parents out for a Sunday drive is someone else's job and visiting relatives in nursing homes is carried out by long suffering staff members on their behalf.
- When do they talk to cleaners and factory workers, when do they see kids behaving badly at school or in shopping centres? Unless they are the occasional constituent come to make a complaint, rarely.
- Very often they have partners who don't work, or grown up children. Little wonder that they find it so difficult to relate to the statistics or the accounts of what's happening in the world, and rely instead on their own memories or ideas about what should be the case. That's why their daughters are very often invoked as the opinion changers.
- The daughter effect I suspect is only of limited usefulness in understanding the rate of change in policy stance, but I guess it's better than admitting to being swayed by focus group research.
- To a lesser extent this is also true of senior public servants. With a median age surely more than the national average, and a career built on a life time of long hours and commitment, it must be the case that many of our most senior public sector leaders have also escaped experiencing the daily drama of family life in Australia.
- For this reason alone diversity in public sector leadership is crucial; without it public policy becomes naive, if not just wrong.
- In the mean time, I recommend the reading of books you will not enjoy to bridge the gap. Yes, its true most public servants aren't farmers or soldiers either, the difference here is that we are all members of families.
- It is easy to assume that our family experience is like everyone else's, and that we are fit to judge how other families' lives work.
- When I worked for the ABC I used to think every new board member suffered the same problem- since they watched television they thought they knew what good television for the rest of us was about.
- Which is all by way of a very long introduction to the topic of today-the future of work and public policy.
- Having said you should read the heart breakers, let me begin with the statistics.
- 61% of mothers in couples and 47% of sole female parents have jobs. The female participation rate has risen from 36% in 1966 to 55% in 2002.
- Most people are not rich professional couples with children in private schools.
- In 1999-2000, median income for couples with children under five was $917 per week, including welfare benefits. For couples with children over the age of 15, median family income was $1,238.
- Among our poorest families, mum at home and dad in a full time crummy job is rare.
- Going up the income brackets, single income households become more common, although in no category are they the dominant family type.
- So fact one- families have both parents away from their children for at least part of the time. As a consequence, parents with young children, particularly mothers, are extremely time poor.
- In 1997, men spent 16 minutes a day on average in child care as a main activity, women 45 minutes. These figures drastically increase when we take into account multi-tasking and the fact that not all people do childcare - amongst people who actually did some childcare, men spent an average of 301 minutes a day and women spent 488 minutes a day on child care.
- Since 1982, there has been a 76% increase in the amount of time that married and de facto women spend working. They have managed this extra work in a range of ways, including by sleeping less, buying more pre-prepared food, outsourcing domestic chores and spending less time on recreation and leisure. In 1997, women undertook around three quarters of unpaid childcare work, and two thirds of housework.
- Now why are they working?
- They're working because we're an aspirational culture, we want our children to have more than we did, we have endowed them with house prices that make repayments in Melbourne and Sydney a substantial portion of earnings.
- In Sydney for example, the average mortgage is almost half average weekly earnings, in Melbourne its 27%. Overall housing affordability in Australia has dropped by 29% in the space of a generation.
- They are working because we want them to.
- Australia tends not to favour high immigration intakes but does like economic growth. We want to be part of this sexy new global market place and we like 3% growth rates when the rest of the post-industrial world is wallowing at a third of that.
- So we have been quite happy to send women to work, children or not. The size of the labour market is a direct determinant of economic output and women have been the single largest contributors to rising living standards since the seventies.
- They are also working because they want to. We are removing discrimination against women because work can be an enjoyable and defining activity. Even for time poor mothers, paid work can meet a desire for intellectual stimulation or social contact.
- For many women who have spent years developing a career, maintaining contact with the workforce while their children are young keeps that career alive.
- So Fact Two: Australia needs women to work and has actively pursued this policy for thirty years.
- Australia's also changed the way governments meet their responsibilities; it's cut back on some, privatised others, become more efficient, stream lined its payments. Old age in particular has been privatised, so has caring for the disabled. Governments are increasingly reluctant to pick up the tab and families - or individuals, have to meet the need.
- Put that together with the demographic shift and no wonder we have unemployment trending to a record low and the work force predicted to actually decline, when baby boomers start to enter retirement. We get Fact Three: Australian women need to work more than they ever have. For their own old age and for the sake of the future. There is no turning back.
- Competing with this trend is the fact that increasing numbers of working aged people now have ageing parents who require care - creating dilemmas for families of whether to purchase expensive private services or do the caring themselves.
- The improved health of older Australians also means that the types of services provided by the market are often not the type of care that our older parents need. You cannot pay someone to take mum to the doctor or sort out dad's telephone problem.
- This leads directly to Fact Four- work life balance is on a collision course. We have increasingly onerous family needs and increasingly onerous work needs. There is only one discretionary "choice" area - the number of children we have. No wonder the number of only child families has increased from 1 in 5 families in 1981 to 1 in 3 families in 2001.
- There are private schools in Melbourne and Sydney where half their primary school classes consist of only children.
- But that's not everyone. For every family reducing its number, there are others struggling along with a couple of kids and no body home.
- SO IF THE PROBLEM IS TIME MANAGEMENT, WHAT IS THE ANSWER?
- First of all, is it the responsibility of government to provide the answer? Is time shortage a public policy problem. After all, people choose to have children and they choose to work. How they combine those responsibilities is their decision.
- Much depends on what you think the problems are - frustrating or limiting peoples' choices is not in itself a problem, a shortage of time is not of itself a problem. But if we can link time shortages directly to health, social development and welfare outcomes, then arguably there is a need for governments to be involved.
- Surely one of the key objectives of government is political stability. As the French revolution taught us, political stability is cost effective but is reliant on social stability and satisfaction.
- If we assume that giving families more time is ineluctably good for them (and there are families where this might not be so and there are forms of care away from parents that are also useful, such as school and some child care) then how do we achieve this?
We either:
- mandate it - by making it illegal, for example, for one parent to work or sole parents to work; OR
- we provide incentives that affect effective marginal tax rates in such a way that the second income earner stops work or works less; or
- we regulate and encourage industry to provide working conditions more conducive to family life; or
- we change gender roles so that men and women share evenly in the available time with and responsibilities for families.
- Banning two income families is clearly out of the question.
- Whether we raise EMTRs for second income earners to encourage them to reduce their hours of work, or provide funding and further regulation of industry to facilitate family-friendly work conditions comes down to three issues: ideology, cost and economic efficiency.
Ideology
- My ideological starting point is human rights, gender equality and the importance of individual choice.
- If good government is the employment of scarce resources for the achieving of national interest outcomes such as peace, prosperity and safety from harm, then good government is also about preserving and advancing the human rights of its citizens.
- Increasingly the links between countries with legal and social systems that promote and protect human rights with economic development are becoming clearer. The rule of law and respect for individuals is integral to the efficient functioning of the state and its markets.
- We know that good governance is a necessary precedent for development. For example, a recent international comparison drawing on the World Values Survey results concluded that Muslim nations have have a lower commitment to gender equality and that this affects the take up of democratic institutions in those countries.
- Wherever you look in fact, the human rights of women are a litmus test for the rights of citizens as a whole.
- While economic development is obviously the easiest indicator of prosperity to measure, you can predict that wherever women are denied rights, freedoms and choices, the rules of law and good governance won't apply in the social and political spheres either.
- For this reason, I believe it remains important for debates about economic and social progress to maintain a human rights focus.
- It remains important to acknowledge that individual choices and the capacity of people to make those choices are linked directly with prosperity and peace. After all, freedom to choose is an underlying assumption of demand and supply theory.
- So how do we relate this to solving families' time management problem?
- It would be nice if we had a one size fits all - if all women wanted to stay home so it was just a matter of giving them more money to do so - or if all women wanted to work so we adopt policies that enable them to do so.
- In fact women will want to choose from a range of options and ideally we should have policies that enable both.
- Having said that, ideology can also dictate here. If a government was of the strong view that all children had a right to one full time parent for the first five years of life, it might well provide generous incentives for women to do so, and either discouragement or no support for the choice to work.
- Alternatively, if it believed it was essential for women to remain in the workforce, it could put money and legislative effort into work and family arrangements and make no provision for women who wanted to do their own parenting.
- Looking further, there are assumptions here about what is desirable in family life, for the status of women and for who ends up supporting who. In other words there are equity implications in these ideologies.
- A fair bit of family policy has been driven by ideology in Australia. I am tempted to say "sadly" since I think freedom of choice is fundamentally economically and socially efficient, but we elect governments to govern and part of the package must be their ideology.
Cost and economic efficiency
- Turning now to cost and economic efficiency - cost considerations, while also able to be overwhelmed by ideology, are in the end part of the efficiency equation.
- Take an ideology which says it is better for mothers not to work for the first five years. Government subsidies large enough to effectively discourage women from working may need to be very high.
- For example even the $4billion Family Tax Benefit Part B package has not made a dent in the participation rate of women with children under five. This rate continues to rise. Sure, it might have risen even more were it not for FTB(B), but the point remains that women attach a very high opportunity cost to not working and require high levels of income substitution before they will leave employment.
- I have not costed a package that would enable all women to stay at home for five years but if we took the $213 million maternity leave proposal, which assumed women would stay home for up to minimum weekly earnings for 14 weeks, and multiplied this for all births and for five years, you can see the cost stretching to many billions.
- This high opportunity cost is not just the consequence of greater training and education investment by women but also of their belief that they will need to return to the workforce eventually, and that time out of the workforce is associated with greater difficulty in returning, in recovering their earnings levels and in providing for themselves and their old age.
- This is to say nothing of the climate of job uncertainty and contracts. 66% of part time jobs are casual. 40% of employed mothers have no leave entitlements.
- I also believe that the post war emphasis on human rights and the idea of gender equality has firmly established women's right to access public life such as education and employment, and women are determined to pursue it.
- This does not mean all women want to go back to work. Of course not. As Catherine Hakim, the British demographer whose work has been of such interest to the Australian government says, many women want to stay at home but feel obliged to work, for social and economic reasons. But unless those factors change, then that is the reality, not the wish list.
- Equally, in a society that elects to promote women in the workforce, the cost of providing first class childcare for all children and subsidised work arrangements, as the Scandinavian countries have done, is also high.
- Combinations of these policy approaches are doubtlessly also very expensive.
- On economic grounds, there seems to be no doubt that it is better for the family and for the country to retain the investment in the education of women and girls and to maximise the size of the workforce and its skilfulness. This is particularly the case with baby boomers beginning to leave the labour market.
- As a response to skill shortages, it makes sense to engage women in paid work more rather than less. The demographic shift that is so rapidly transforming the developed world is certainly the biggest challenge to the existing work order. For the first time since the great plagues the developed world will experience peace-time reductions in the supply of labour.
- In fact over 40,000 Australians left our shores permanently last year- the largest number ever- to seek a future elsewhere.
- These are likely to be young, skilled workers who are directly joining the mobile global economy. They will go where there are good wages, political stability and social stability.
- Immigration is not the answer- skilled migrants are like hens-teeth in the English speaking world and we are beginning to compete with other countries, also suffering ageing populations. Canada, Hong Kong and the UK are fighting us for our nurses and teachers for example.
- Alternatively, we could make our existing workers begin working earlier and work until they are older. This I understand is the Treasurer's preferred approach.
- We have certainly expanded the effective age range of our labour force - while increased education has delayed the start of full-time work for young people, most students now work at least part time and employers are encouraged to keep workers on until well into their sixties- but these mechanisms are also limited in effectiveness.
- Enabling more women of prime work age to work and mother is, by contrast, an excellent alternative.
- In other words there is a strong case for adopting family-friendly industrial practices if these produce a total increase in labour effort.
- However, such a restructure will also not be without economic price- after all part time work cannot produce the same output as full time work, even if it is more efficient per hour, and flexible work practices involve administration and management costs for employers.
- Mind you, in a post industrial society, where knowledge workers out number manual and semi skilled workers, it is arguable that there are economic gains to be had from happy, refreshed and committed workers that would not once have been a consideration.
- Studies of the US stock market suggest that employers with good HR practices have better performing stocks than those that have not. I assume I don't have to describe good hr practice- flexible work hours, part time work with promotional possibilities etc.
- A further factor we might need to anticipate is the Men's Movement. At the moment the Men's movement has an unattractive face - men working very long hours, apparently by choice, but then concerned that their sons have no role models and prepared to compensate for their own absences by paying men more than women to become teachers.
- The Men's Movement also wants fifty fifty care arrangements post divorce, without any suggestion that men will have to put in equal parenting time while the marriage is intact or how they will rearrange their lives to be more involved after separation.
- Some analysts are tempted to put all this together and warn that a new Gender War is on the way. Maybe. But it need not be.
- If the responsibilities of child care can be more equally apportioned, if fathers and mothers take equal care of their children in intact marriages, then maybe the sorts of policy solutions being mooted today will become irrelevant.
- Equality between men and women has hit a brick wall- and only the engagement of men in the struggle for work and family balance will move equality closer.
Trading off growth for lifestyle
- There is still a case for arguing that mature economies like ours may eschew economic growth, having decided that the family does not need another coffee machine that also makes the bed and chooses your favourite music.
- In this case, the value of personal time and of families may increase - again producing either an even more family friendly workplace or a gender-based division of parenting, based on tax incentives, than exists now.
- The Dutch experience- where by law parents can work part time, is instructive. Sixty nine percent of women and nineteen percent of men work part time. Terrific.
- Economic growth is a quarter of a percent. Terrible? - Or a deliberate choice to trade off Time against Things?
- To me there is increasing evidence that Australia is reaching a point where this will become the key question.
- At the moment, there is a lot of problem-describing (like the Pocock book) and blaming through the opinion pages of the broadsheets.
- Overall there still seems to be a strong assumption that the only option for people is to work harder and longer and somehow find a way of squeezing in families.
- At least that is the debate in the public domain. In fact, a huge number of women work part time- Australia has 46% of women workers in part time work. In 2001, fifty seven percent of employed mothers worked part time.
- Presumably these positions tend to be at the lower skilled end of the market than the top end, but it is still a strong sign that many families are voting with their feet and attempting to manage time pressures by forgoing income.
- Sadly, many of those families also expect Dad to work longer and longer to make up for the income she has lost.
- Whether or not these families are more stable, whether or not their divorce rate is lower, their children happier, whether or not these women are likely to share equally in the superannuation outcomes come retirement, are questions I do not have answers to.
- For their sakes, I trust the answers are favourable. In the mean time, 43% of employed mothers work full time and do the mother juggle.
- Mums in paid work spend less time on personal care than mothers who are full time carers and they sleep less. The time use surveys show they spend as much time giving child care. Very few dads work part time.
- Are they a harbinger of a full blown debate about the need for less things and more time, or are they the harbingers of a need for more government intervention into family life while both working parents continue to work? It is an interesting question.
- Just how our governments might engage in and steer these looming cultural wars is another topic for another day.
Thank you.
Last updated 19 September 2002
