Tuesday 16 January 2018

Why getting women back into the workforce is key for our economy

Ahead of the Budget, employers' body Ibec has called for a wide range of measures to support women in the workforce

The high cost of childcare - as always - is flagged as a major issue.
The high cost of childcare - as always - is flagged as a major issue.
Gavin McLoughlin

Gavin McLoughlin

It's that time of year again. On one side of the ballroom of romance - the Government preparing the Budget. On the other side - the lobby groups lining up to make their case. Ibec is one of the most powerful of the lobbyists and this year it's come out with a hefty report arguing for a significant overhaul of the labour market in order to encourage more female participation in the workforce.

Ireland doesn't fare particularly well in this regard. According to the most recent Quarterly National Household Survey (QNHS) figures from the CSO, the gap between male and female participation stands at 14.2 percentage points (67.8pc vs 53.6pc).

Lifting female participation would help insulate the Irish economy from the many potential shocks that exist in these uncertain times - Brexit, Deutsche Bank, the wildly dysfunctional bond market, or high levels of Chinese debt. It would also help mitigate against the effects of longer living - a larger workforce makes it easier to support increasing numbers

Dr Kara McGann, senior labour market policy executive at Ibec and the author of the report, says increasing female participation "could help alleviate some of the skills shortage, boost productivity and realise the untapped potential that is available to businesses".

The high cost of childcare - as always - is flagged as a major issue. Without good and affordable childcare services that parents want to use, it will be difficult to lift the female participation rate without reducing the male participation rate, negating the positive macro-economic impact of having more people at work outside the home.

"When you factor in childcare costs in Ireland, a second family income is diminished by an average of 92pc, leaving no incentive to participate in the workforce," McGann says.

"When the high marginal rate of tax is combined with the high cost of childcare and the lack of affordable housing in many parts of the country, life can become very difficult for working parents. Often one of them may feel forced to leave the workplace, and this is typically the female.

"The economic rationale for reform is overwhelming: We are creating jobs but not growing participation rates and to address this we need to change the current model. This will require investment and an openness to change in existing structures, such as child benefit and staff ratios, if we are to make a real difference for families across a range of income levels."

The report sets out 12 policy steps the business representative group wants the Government to take.

It wants child benefit to be means tested, with payments beginning to taper off after an €80,000 threshold, with the money saved by the Exchequer to be diverted into providing childcare services.

It wants the Early Childhood Care and Education Scheme (available to children aged between three and five-and-a-half) extended to include children aged between one and three, and an increase in the scheme's duration to four hours a day from three.

And perhaps most controversially, it wants a loosening of the child-adult ratios in childcare services by which better-qualified staff could deal with higher numbers of children.

As one might expect from an Ibec report, the lobby group favours tax cuts as a means to boost labour market participation.

It wants the top marginal rate of tax (including USC and PRSI) to come in at no more than 45pc, arguing that higher tax rates disproportionately disincentivise women to work. Those earning above €70,044 currently pay 52pc according to the Irish Tax Institute.

It's all well and good having the right incentives in place - but will they actually inspire people to take up a job outside the home?

The Ibec paper explicitly keeps away from issues including social attitudes, a preference for remaining in the home with young children, and the availability of flexible working arrangements. That last one is particularly important, according to Laura Erskine, a spokesperson for online mothers' community Mummypages.ie.

"Many of our mums are saying that they're forced out of their jobs by their employers being completely inflexible when they've had to take some time off for sick children, if they've had to juggle their working hours around creche pick-up and drop-off times. And that sort of thing has actually resulted in mums leaving the workforce without wanting to," Erskine told the Sunday Independent.

That's despite many mothers wishing to stay on in work after they have children, she adds.

"Our mums repeatedly tell us that they really don't like to leave their career after they have children because they feel that they'll never get back to the same level they were at if they take a career break of any sort beyond their statutory maternity leave. And they also feel that they're viewed differently by their peers within the organisation after having children as being less committed to their job and less committed to developing their own career.

"Employers would have a much more motivated and dedicated female workforce if there was some flexibility allowed for mums to be a mum and also contribute to the workplace."

She continues: "What most of them strive to achieve is a better work-life balance after they've had children. And that is often not available in this country... whether it's flexible work hours, a four-day week, a job-share, or a couple of days' work from home, that's considered normal practice in many other European countries but it's not in Ireland. I think it's because we have a very traditionalist view of women's role within the family."

An attitude shift is needed as well as an incentive shift, it seems.

Sunday Indo Business

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