Woman traveling with baby on phone

ParentsMay 29, 2018

The parent pay chasm: how the gender pay gap widens among those with kids

Woman traveling with baby on phone

New research reveals the penalty women pay after becoming mothers, and it should spur us to take action to change, writes Jess Berentson-Shaw

“Having children is just selfish.”

It’s a common line. People have said it to my face happily enough (not to my husband’s though, oddly enough). There is an element of truth to it. But the thing about truth is it’s a many-faceted diamond. Children are a taonga, they well up from the spring of ancestors and are to be honoured; children are the product of innate biological drive that we can no more overcome than other biological functions. Children are necessary for caring for the generation that has goes before them; children will ruin the planet. Being a parent is important work; being a parent does not count as work at all.

The narratives are different. None are more correct. Because these are not differences in facts – they are differences in values. And depending on which values a society prioritises the wellbeing of children and parents differs.

There is a strong narrative in New Zealand in which women (not men so much) who have children are seen to be doing so for their own benefit. Or parenting children is not as important as paid work for society and the economy. Any loss of economic wellbeing women experience from having and caring for children is acceptable in this context.

When we swim in an ocean of stories that subtly and not so subtly devalue parenting (mainly parenting done by women) it is hard to see just how grotty the water is. The narrative of individual choice, individual responsibility, and a valuing of paid work over other work is however, leading to some long term problems. Problems for children, problems for our public services, and problems for parents of all genders as they try to become more equitable and responsive to their children and partners within a rigid and inflexible system.

Women parents experience a pay penalty for parenting

In research released by Motu today, Dr Isabelle Sin, Dr Kabir Dasgupta and Professor Gail Pacheco compared the earnings of women parents with men parents. The research follows Dr Sin’s excellent work on the productivity wage gap – in which she showed that women who produced the exact same value for a company as men were still paid less because of, well, sexism.

The findings of this new study will be no surprise to many women who have had children. However, quality data help us see the story more clearly.

Using a collection of data sources: administrative wage data, birth records, and survey data on hours worked and earnings, the researchers explored the patterns of employment and pay for parents as they have their first child and for the next 10 years.

The data confirms that the majority of post baby care giving is done by women. That these women suffer a significant pay drop after becoming a parent and in the 10 years after their pay has not recovered. Nothing happens to men’s salaries. They just continue in a nice smooth upwards pattern. 

Becoming a mother is associated with a 4.4% decrease in hourly wages on average. There is no effect of becoming a father on hourly wages.

Because few men are the primary caregivers it is difficult to compare and contrast the earnings of men and women who do most of the parenting. However, even for women who are highly paid and return very quickly to work after having a baby (ie their work patterns looks more like men) earnings fall with becoming a parent and don’t catch up.  Males’ working in the same bracket (the purple line) continue to growth smoothly over time after they become parents. Their monthly incomes pull further ahead of mothers.

The research found that the motherhood penalty in earnings was larger for women who started on higher incomes. The authors suggest a few reasons for this. Women on lower incomes have less “human capital to depreciate” (economist-speak), and they may be work longer hours when they return to work than other women.

We know that the women who are paid the least in New Zealand are Pacific women and Māori women. While their earnings may “depreciate less”, they start with less and never catch up not only to men but to wealthier women. And they have to work longer hours to support their children. That is deeply problematic. We have a massive problem with child poverty in this country, their mother’s economic wellbeing is part of that story.

There is also a significant pay penalty for  women who parent for longer. For women who are doing parenting work for over a year there is an 8.3% decrease in their hourly wages. This is possibly to do with either a real or perceived loss of skill when they return to paid work. But let’s face it 12 months out of paid work is hardly justification for an 8.3% “skill depreciation adjustment”. I know cars and stoves that have depreciated less than that in a year.

On average mothers earn 12.5% less than fathers of the same age and education.

One of the drivers of the pay difference is likely to be that many (not all) women are doing fewer hours at work, and more hours at parenting. The balance of the types of work they are doing changes.

At this point some people may be asking if some women are working fewer hours and so receive less money why should we be concerned? We should be concerned because parenting (and people who take time out of paid work to do other important roles in society or do both at the same time) is just another type of productive work in society. Yet we are penalising the doing of it. We are literally punishing people for productive necessary work. That is some messed up signal about what matters.  The penalty leaves parents (women parents) with reduced economic wellbeing and independence compared to men. There is a compounding effect across the lifetime of women.

This motherhood pay gap also acts as an impediment to rebalancing the gender roles in parenting. Men are less likely to step into caring roles when they see how deeply undervalued it is, and how penalised women are for doing so.

Caring work has a measured value even if it is mainly invisible

Caring for children, caring for sick people, caring for the elderly, caring for people who are mentally unwell. Caring for each other and the environment is valuable. Sometimes we even choose to estimate the value of it officially when we do a time use survey. The last time we did one, in 2009, the unpaid work of women made up about 60% of all unpaid work done in New Zealand. Women do most of their unpaid work while they are also working, men tend to do it in retirement. This is why when paid and unpaid work was combined, women in part-time or full time paid work worked more hours per day than similar men.

All the unpaid work New Zealanders did was valued at $40 billion a year to the economy. Though as the economist Prue Hyman points out the dollar value attached to caring work in these equations is also depressed due to the historical undervaluing of what is traditionally seen as “women’s work”. Have a go at this nifty (US based) tool created by Nobel Peace Laureate Leymah Gbowee, and see what the value of your invisible labour is.

The fact that we don’t regularly (annually) measure the huge amount of community endeavour that goes on to make our economy and society function is telling. What we measure (or don’t’ measure) says a lot about what we think matters most. James Shaw this is a direct challenge to you!

In New Zealand are now building a new model of economic wellbeing. We have recognised that focussing only on the money is not doing us a lot of good. It is doing us harm. At the moment that wellbeing measure is derived from the OECD wellbeing framework. Neither of these frameworks have a metric of unpaid caring work, or gender inequity in that work.  The OECD says this is because time use surveys are patchy (PDF), which is true. But if we don’t value it, we don’t measure it, we can’t explore the issues, and nothing changes. It is a vicious cycle that says a lot about the values that informs research.

We can change this if we choose

We need to find ways to tell new stories about the value of parenting. We are not short of clever ideas, just short on the desire to act. We can in part influence story through policy changes. Big policies that close the gender pay gap, small policies such as paying into kiwisaver when parents are on leave, topping up the government’s parental leave payments, paid leave for fathers (or a significant other for sole parents), measuring where men and women and parents spend their time regularly.  Businesses also need to step up and recognise their role in leading the community on gender and parenting wage gap issues. Let’s have the conversation. The data is there to support it. But let’s focus first on what work and who’s work we value.

Keep going!