20Dec2013

Childcare workers salaries

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As any parent knows, it's a tough job looking after children.  It's tough in modern times, juggling one's priorities to go to work, to make enough money to pay the bills and to enjoy a reasonable quality of life in order to deal with everyday needs as well as to provide for the security and well-being of our children.  For many Australians trying to make ends meet, it's just not possible to be able to go to work if one has children not old enough to attend school and many families depend on childcare centres to look after children during work hours.  Parents who rely on childcare centres need the security of knowing that their children will be properly cared for by those who are employed in such places.  Childcare workers are people, too, who have thier own bills to pay, who want to enjoy a reasonable quality of life, just like everyone else.  I'm saddened that our Government, in what I can only consider to be a cynical exercise in political point-scoring, has not grasped any understanding of the needs of parents and childcare workers in undertaking this vital role in raising our kids.

A little more than one week ago, the Assistant Minister for Education, Sussan Ley, decided to abolish the previous Labor Government's funding to increase childcare workers' wages.  Earlier this year, the Early Years Quality Fund [EYQF] was established for (among other things) pay increases to childcare workers; the pay increases would have come into effect in December.  The funding was to, in effect, "subsidise" childcare providers to pay their staff an increased $3-5 per hour.  Ms Ley has instead characterised the fund in the following way:

This was never about early years, this was never about quality, this was never about educators, this was never about the children. This was only ever about the union.Assistant Minister for Education, Sussan Ley, address to Parliament, 10 December 2013

Regardless of Ms Ley's political rhetoric, the plan to give childcare workers a pay rise was contingent on two key factors:  childcare providers needed to improve standards in training their employees and, to secure the deal, had to ensure that everyone's rights were adequately protected by Australia's Fair Work standards.  In other words, before childcare providers could access this funding, they needed to establish workplace agreements with their staff.  Negotiating these agreements takes time and, navigating through Australia's tricky industrial law, requires some expertise and, I guess, that's where the unions got involved. 

Wages:  the facts

There are about 69,000 people employed in the long day child care sector in Australia.  There are over 1 million children who regularly attend child care.  In simple terms, that's about 1 worker for every 15 children.  (As if it isn't difficult enough looking after one child, can you imagine what it would be like looking after 15 boisterous rug-rats?)

Childcare workers wages compared to minimum wages and average (median) wages95% of all people employed in early childhood centres are women.  The award wage for Certificate III qualified childcare workers is $19.72 per hour.  I do not know the percentage of childcare workers who are (a) Certificate III qualifited or (b) employed as casuals but, because this figure is the one usually quoted in all the sources I have read, I am assuming that they're paid more than the minimum wage.  I'm also assuming they work a standard 38-hour week.

The minimum wage in Australia is $16.37 per hour; casual staff receive an extra 24% loading, i.e. $20.30 per hour.  The median wage among full time workers is $57,400 (which is about $28.95 per hour for a standard 38-hour week).  The chart at the right compares the hourly rate of childcare workers against the minimum wage and the "average" (median) wage in Australia.  The chart also shows the effect of the Labor's proposals to give childcare workers an extra $3/hour, i.e. 15.2%, as the result of the EYQF.

Childcare workers earn about 16% above the minimum wage but they are paid 36% below the "average" wage.  No matter how you interpret the figures, assuming that most people in the childcare sector are receiving the $19 per hour wage, they are are among the lowest paid workers in Australia.

In June this year, parliament passed the Early Years Quality Fund Special Account Bill 2013 to "improve quality outcomes for children in early childhood education and care services by enhancing professionalism in the early childhood education and care sector, including through improved attraction and retention of a skilled and professional workforce."  The Act establishes a special fund of $300 million ($135 million as of 1 July 2013 and $165 million on 1 July 2014) to "approved centre based long day care services, to be used exclusively for paying remuneration, and other employment‑related costs and expenses, in relation to employees in the early childhood education and care sector", including superannuation contributions, leave entitlements, payroll tax, workers compensation, and professional development activities.  Wage increases were to be paid in line with a schedule "published in the Program Guidelines".

The problem is that these "program guidelines" seem to have disappeared from the government department's websites.

EYQF as a "slush fund"?

As a side note, I'm puzzled why the original contract awarded to Price-Waterhouse-Coopers [PwC] blew out from $80,000 to $130,000 but I'll leave it to others to decide if we got value for money; the 50-page report works out to $2,600 per page—nice work for those who can get it.

The new government commissioned a review of the EYQF, including into including allegations that the EYQF was established as a vehicle to boost union membership.  My problem is trying to separate the various distortions of the truth from the facts.  In many way this is not only about a government's unconcern for wage fairness to the nation's lowest-paid workers or a government's determined persecution of the trade union movement.  Wages and unions are typically the top two prime targets of all conservative governments.  The bigger worry is the allegation that the EYQF was established as a "slush fund" with illegal objectives.

This is a most serious allegation that the previous Government may have acted improperly by approving EYQF spending between the time when applications could be made (23 July) and—when the Government was in "caretaker" mode—one week before the election on 7 September.  It raises doubts about why one childcare provider was able to provide 500 pages of documentation less than one hour after the time the application period commenced and why—according to the PwC report—applications were approved on a first-come-first-served basis instead of being assessed on their merit.  According to the report, 453 submissions were made by childcare providers and it was estimated that the EYQF was depleted within 13 hours of its opening.  This raises serious doubts that the initial funding allocation would have met the expectations of the Act to provide equity and fairness for workers in the childcare sector.

The suggestion that the approval process should now be referred to the Auditor-General for an assessment about probity is an equally concerning one.  The big question is whether the EYQF was established solely, as the Assistant Minister for Education, Sussan Ley has claimed, for the purposes of increasing union membership within the childcare sector.  I have my doubts.

The facts are that applications were made, in good faith, by childcare providers to access EYQF money.  Applications that met the "guidelines" were approved by the previous Government.  Some childcare providers still have not received their first instalment of money under the scheme.  The new Government's view is that the EYQF was wrong to begin with and that money already distributed to childcare providers should be handed back so that it can be "redistributed" in other ways.

I'm not sure how these facts contend that EYQF money was paid directly to unions representing workers in the sector—in that sense, claims that the EYQF was a union "slush fund" would be justified—but the scheme created an environment that indirectly benefited unions insofar as the membership increased following the scheme's announcement in March this year.

Was the EYQF deeply flawed to begin with?

In spite of the information that's on the public record, it's virtually impossible to get a handle on what's going on behind the scenes.  I've used many resources to try to piece together the puzzle but, like so many things this new Government has been doing in the 3 months since it came to power, the puzzle seems to be missing a lot of the pieces.  One of the best analyses concludes with:

The $300 million was earmarked for low-paid workers and linked to raising the quality of care they provide to children. However, there are reasonable criticisms of the amount allocated to the fund, the uneven way it was distributed and the adoption of a first-come-first-served policy. This process favoured the union.Was Labor's childcare fund only ever about the union?

I'm find it intriguing that Sussan Ley has led the charge to condemn the previous government's education policies.  Perhaps it's because the senior minister, Christopher Pyne, lacks credibility due his own mishandling of education that someone decided it was better to send a woman to do a man's job?  Of course I don't really believe that—that only diverts the discussion into a pointless exercise about male chavinism within the Liberal Party—but it makes one wonder why the government is intent on making political capital over the matter, doesn't it?

What I feel we're overlooking in this debate is how best to improve the childcare sector in ways that recognise our collective responsibility to childcare as well as to improve the employment conditions for those whose livelihood depends on it.  These important matters notwithstanding, Ms Ley's comments are somewhat credible.

On the other side, Kate Ellis' defence of the original scheme is also credible

There are no winners here.  The government's reversal of its predecessor's policy leaves everyone in doubt as to what will be the next steps.  Childcare providers are under enormous pressures to survive without passing the burden of increased costs on to the parents who send their children into care centres.  Without additional government assistance the rising costs to meet national accrediation standards, to meet the professional development needs of those employed in the sector and to satisfy parents' expectations that their children will be properly looked after, these costs will have to be borne by parents.

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