Paternity pay

OK, so we all know that maternity leave….that career gap to bear and raise a child,…is a major determinant of the gender pay gap.

Concluding that it was time that "policy-making enabled men to play an equal part in parenting", the EHRC proposes that the first 26 weeks of a baby\’s life would remain dedicated maternity leave for mothers, but with higher rates of pay, so that they would receive 90% of pay for the entirety of their maternity leave. Fathers would still get two weeks of paternity leave at the birth of their child, but this would also go up to 90% of their pay.

Beyond the first six months of maternity leave, the commission proposes three blocks of "parental leave", which could be taken any time before the child\’s fifth birthday, each of about four months, one block dedicated to mothers, one to fathers and one either could take.

The first eight weeks of each of these blocks of leave would be paid at 90%.

Excellent! So we\’ll raise maternity pay, thus increasing the gender pay gap. And we\’ll raise the cost of employing fathers as well. So that we now have a parent pay gap!

Success!

Sheesh.

16 comments on “Paternity pay

  1. So are you suggesting that the system stays as it is (meaning that women only experience the pay gap) or do you have any suggestions?

  2. This does seem backwards (and perhaps not in the way you mean). In that if one of the large causes of an advancement gap is an employment gap from child raising…. This would not materially help. Mothers would not gain any faster advancement compared to say fathers if mothers got 26 week of maternity time and fathers got 2 weeks. A big difference might be attained by equalizing maternity and paternity benefits and perhaps a PR campaign geared at fathers to take more time off for child rearing.
    (Given fathers might be less likely to take the full time off equal might not be exactly half the number of weeks … perhaps 16 weeks each?)

    I think one could argue it from a legal/rights prospective as well. I would find it hard to imagine that there was an issue of ‘a relevant sexual difference’ as generally viewed by the courts here.

    It is merely the way the law was written.

    (as an aside it would be interesting to devise a relative gender mobility test much like is conceptualized for income mobility to measure if there is an opportunity gap as a opposed to a gap that reflects average lifestyle choices and a biased policy)

  3. Garick,

    “A big difference might be attained by equalizing maternity and paternity benefits and perhaps a PR campaign geared at fathers to take more time off for child rearing.”

    Right, so now you’ve got men and women on an equal standing. Now what do you do about the unequal competitiveness with China, India or the United States?

    You start offering couples 1/3rd of their year off at 90% maternity leave, and you’re adding a large amount to the costs of employment – costs that those countries don’t add. It raises our costs and makes us less competitive with countries like India and China.

    Maternity leave had a simple objective originally. It was there because women were incapable of working for a few weeks. So, give women a month, men a couple of weeks.

  4. > Maternity leave had a simple objective originally. It was there because women were incapable of working for a few weeks. So, give women a month, men a couple of weeks.

    Whatever it’s original purpose, fact is that if you have a welfare state built on the assumption that our kids will pay our bills, you need kids. Making it economically impossible to have them (which is what you’re suggesting here) just is not a good plan.

    Now, I’ll vote for anyone (well, you know…) who wants to scale back or remodel the welfare state, but I think the changes in payouts would need to precede the changes in funding, even if only just.

    As for competing with China… well, no, they don’t pay maternity leave; very true. A bit of an understatement, though, isn’t it? There are one or two other ways in which we treat our workers better than they do, and, quite frankly, anyone who thinks their way is something to aspire to should be taken out and shot.

    With you, though, Mr W, on the gender pay gap thing. That the same people who want it gone want maternity leave in place ensures that they will never be satisfied. They need to choose.

  5. Sorry, should have added:

    There are also strong non-economic reasons why we should encourage kid-having, which is why viewing the problem in purely economic terms is always inadequate.

  6. @micearenice
    I suggest the system stays as it is. The pay gap is not a problem. It would only be a problem if it were due to disrimination. Seeing as it isn’t, there is no problem. The only way for the state to “solve” this non-existant problem is ever more meddling in people’s lives. I care as much about the fact that on the whole men make more money than women as I care about the fact on the whole women spend more money than men. Do you propose to let this inequity to stand, or do you think something should be done about it?

    @Squander
    People don’t need to be encouraged to have children, or at least not by government. Incentives to reproduce already exist, courtesy of 3.5 billion years of evolution. Anyone who would have children only in response to incentives offered by government is precisely the sort of person who should not have children.

  7. “Whatever it’s original purpose, fact is that if you have a welfare state built on the assumption that our kids will pay our bills, you need kids.”

    I thought the entire idea with a welfare system was that our kids shouldn’t have to pay our bills.

  8. Emil,

    How did you think it was funded, then?

    ChrisM,

    Yes, obviously incentives to have kids exist, and so do plenty of incentives not to. The evolutionary factors you mention apply to the entire human race, yet, puzzlingly, different countries and different cultures have different birth rates. It’s almost as if there are other factors at play or something.

    Fact is, as long as women are allowed to work, then those couples who choose to both work in order to maximise their income will always be able to out-compete those who want kids when it comes to those vital things you need for child-rearing: houses. Maternity leave is one imperfect way to help alleviate that problem. But like I said, the problem isn’t maternity leave per se; the problem is making it economically possible to have kids — which it currently isn’t for most people if you take maternity leave out of the picture without replacing it with something or other. Feel free to suggest something-or-others, and feel free to make them non-governmental. Taxing married couples at the same rate as single people is one idea, which is, yes, I know, of course also imperfect and widely open to abuse.

    I should probably add, given people’s tendency to misconstrue things on the Web, that I personally believe women should be allowed to work if they want to.

  9. All welfare systems in the history of the world have been funded by the children of those receiving the welfare, and (indeed) it can be no other way unless suddenly the ill and the old are not ill nor old.

  10. Squander, I certainly wouldn’t deliberately try and miscontrue what you are saying.

    It is a bit of a stretch to blame (one time) booming house prices on childless people. Many couples start in flats, and move to houses when they have children.

    With regard to differing birth rates in different countries, as Tim is wont to point out, the most obvious (inverse) correlation is economic prosperity. It is likely the most effective way to increase a nation’s birthrate is to drastically reduce its economy. I vote we don’t try and play around with engineering birth rates, and just leave people to their own devices.

    Maternity leave does not help people to have families really. This isn’t money simply given to families. This, like all benefits, is simply money that is taken from families, and then given back to them, less admin fees. After the admin fees, they may or may not be a little bit better off in net by having taken money from people who never have kids, or people who have fewer kids than they do. They are also at the time, taking money from people who are not yet parents, and would like to be but are being hampered paying taxes to support those who already do.

    To the small extent that this small net gain might help them it is still completely immoral to take money from one group of people to support the life style choice of another group of people. And I say this as someone who is likely to soon be a net beneficiary of maternity and paternity rights. I still disagree with them though.

  11. Its also taking money from families who run their own businesses (who don’t benefit from maternity/paternity pay), and giving it to families where the parents work as emlpoyees. And a double wammy if the small business has to shell out on maternity pay for an employee.

  12. “All welfare systems in the history of the world have been funded by the children of those receiving the welfare, and (indeed) it can be no other way unless suddenly the ill and the old are not ill nor old.”

    I agree it will be the children providing the services, but they will have been funded by the recepients. (OK, not in the cae of NI).

    If I spend (say) 30K on a new car now with my own money I think we can agree that I will have funded that purchase myself.

    If instead of spending that money now, I invest it in (whatever) and in my dotage I live off of the returns from that investment (and indeed the capital itself if I so desire), I can hardly see in what way my welfare would have been funded by anyone other than me.

    Instead of buying that car with my own money, I saved that money and used it to buy things with years later.

  13. Squander’s point is you need kids to fund our welfare system. But you also need kids to have any welfare system, or your savings will simply be wiped out by inflation. £30,000 won’t buy a nurse if everyone is 80.

  14. > I certainly wouldn’t deliberately try and miscontrue what you are saying.

    I didn’t think you would. But I find that crazy people often drop in to comments threads.

    > It is a bit of a stretch to blame (one time) booming house prices on childless people. Many couples start in flats, and move to houses when they have children.

    And I didn’t. I was using the word “houses” in the generic sense, which includes flats and apartments and whatever. Higher house prices do obviously get passed on to the rental market to some extent, too.

    > Maternity leave does not help people to have families really. This isn’t money simply given to families. This, like all benefits, is simply money that is taken from families, and then given back to them, less admin fees.

    I think not in this case. The money is taken from families by the Government, yet the benefit is given to families by employers. As far as I’m aware, the Government aren’t giving money or benefits to employers to compensate them for that — quite the opposite — so I don’t think the structure you describe applies to maternity leave. Child Benefit and Child Tax Credits, yes.

    What the Government give us in return for maternity leave is the right for mothers to work in the first place.

    > I vote we don’t try and play around with engineering birth rates, and just leave people to their own devices.

    Too late. This argument was lost in the Sixties. The engineering of birth rates is already happening: they are being kept artificially low by effectively forcing mothers to work. I’m not suggesting keeping them artificially high. I’m suggesting taking measures to prevent it being economically impossible for ordinary people to have children.

    Your analysis of the economics of the welfare state is interesting and entirely irrelevant. The welfare state’s funding structure is based on the assumption that birth rate trends from the time of its founding would continue. If they decrease significantly, it gets screwed up. This has in fact started to happen in various countries, whose governments are no trying to get their welfare states reformed, presumably because they didn’t hire you as an advisor.

  15. “As far as I’m aware, the Government aren’t giving money or benefits to employers to compensate them for that — quite the opposite — so I don’t think the structure you describe applies to maternity leave. Child Benefit and Child Tax Credits, yes.”

    Come on, I’ve read your blog and your comments, you are a lot smarter than that. Employers will reduce wages, increase prices and if they have shareholders, reduce premiums. Families end up paying.

    How do you know that birthrates are being held artifically low? What is the “natural” birthrate? It seems you want to use the tax and benefits system to try and engineer a birthrate that you like, no thanks.

    “. The welfare state’s funding structure is based on the assumption that birth rate trends from the time of its founding would continue.”

    This strikes me as an observation, and an implied weakness in the model, not a recommendation.

    “This has in fact started to happen in various countries, whose governments are no trying to get their welfare states reformed, presumably because they didn’t hire you as an advisor.”

    Would I be right in construing that as sarcasm?

    @Matt
    “Squander’s point is you need kids to fund our welfare system. But you also need kids to have any welfare system, or your savings will simply be wiped out by inflation. £30,000 won’t buy a nurse if everyone is 80.”

    It was not that I didn’t understand his point, it was that I disagreed with it. 30K was just a figure for arguments sake I wouldn’t get hung up on it. 30K invested yields more than 30k (hopefully). The point being that providing a service is NOT THE SAME AS FUNDING IT. When Bill Gates is in his dotage are you honestly saying that those who wipe his arse are “funding” his retirement. Likewise those of more modest means who save and invest for their own retirement are FUNDING their own retirement. Or do people no longer own their assets when they retire?

  16. > Employers will reduce wages, increase prices and if they have shareholders, reduce premiums. Families end up paying.

    Yes, obviously. And that’s not what you said. What you said was “This, like all benefits, is simply money that is taken from families, and then given back to them”. The “given back” means that it’s the same people doing the taking and the giving. It’s not.

    > How do you know that birthrates are being held artifically low?

    Because people repeatedly state that they’d love to have kids or to have more kids, but can’t afford it.

    > What is the “natural” birthrate?

    Replacement rate or higher, obviously.

    To be honest, I don’t care what the natural birth-rate is; I’m not big on things being kept natural — I don’t think, for instance, that women should start having kids as soon as they’re biologically able. What I do think, though, is that it ought not to be economically impossible to have kids. If people are prevented from having twelve kids instead of three by economic factors, fair enough. If people are prevented from having any at all or from having more than one — which they often are — that’s a problem. It means, apart from anything else, that we will die out. Now, if it’s “natural” that we are to die out, I for one believe we should fight nature on this point.

    > It seems you want to use the tax and benefits system to try and engineer a birthrate that you like, no thanks.

    No, I want the fact that legislation and social engineering have made it economically impossible for many ordinary people to have kids to be counteracted.

    > This strikes me as an observation, and an implied weakness in the model, not a recommendation.

    Yes, it is a weakness in the model, and I don’t know where you got the idea that I was recommending it. See my comment above that I support the dismantling or restructuring of the welfare state. I just don’t think that the way to dismantle it is to screw families. By all means reduce maternity leave as long as you also take some other measure so that they can still have kids. A failure to do this will simply put loads of parents into poverty, increasing electoral demand for more welfare. Large families these days are either stinking rich or on benefits. Given that people tend not to become stinking rich, and given that large numbers of people want to have children, any dismantling of systems which make having kids easier for working families will simply encourage those working families to stop working and live off the state instead. Good luck reforming the welfare state while that happens.

    > those of more modest means who save and invest for their own retirement are FUNDING their own retirement.

    Yes, but that’s not how the welfare state works. The projected cost of the benefits going out was assumed to be covered by the projected tax revenue coming in, and that projected tax revenue was based on projected population estimates, which were based on extrapolated birth-rate trends, which have turned out to be completely wrong. The cost of supporting all these retirees was always assumed by those who designed the welfare state to be paid for by their kids and grandkids and great-grandkids. And that hasn’t happened. Do you genuinely not know this?

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