No Pay Rise For Low Pay Care Jobs

The Coalition has ineptly caused itself another gender headache.

By cutting $1.5 billion funding allocated by Labor to subsidise staff salaries in aged and child care services, the party has let ideology overcome common sense. While both funding schemes have some design problems, the cutting out of promised extra pay will not fix the low pay issues and may undermine delivering quality care.

These feminised low pay jobs contribute to the continuing gender pay gap: women earning, on average, around 17 per cent less full time ordinary pay than men. One of the major reasons for the gender pay gap is that jobs that clearly draw on skills deriving from domestic duties are grossly under-valued, because of residual gender biases.

This bias was identified In the recent ASU case when 150,000 welfare workers won a substantial, albeit slow, rise. The two other big areas are aged care and child care, which also are very feminised and underpaid. There is an expanding need for services in both aged care and child care .

These industries are substantially government funded, but services are delivered by a mix of both commercial and not for profit providers. So decisions to raise the pay rates of workers need increased subsidies and/or fee rises for users of the services. That is why the ASU rise will take some years to take effect — so governments can stage their contributions so fees won’t rise or services be cut. 

The low pay problems extend well beyond questions of fairness and equity. The current pay rates in aged care and child care create problems of retention and recruitment of quality staff. These problems are acute when there are competing demands for similarly skilled workers, for example state school preschools versus day care, and nursing homes vis a vis hospitals. Labor’s extra funding was intended to reduce this problem.

The aged care payments are part of bigger changes made by the departing ALP government under the banner of “Workforce Supplements”. The offer (pdf) would apply in the following ways:

“A personal care worker currently paid the award rate and who is employed by an aged care provider that meets the requirements would effectively see a pay rise of up to 18.7 per cent over four years. Enrolled nurses would receive 25 per cent higher pay and registered nurses 29.9 per cent higher pay in the same situation.”

There were similar feelings expressed about the ALP's $300 million Early Years Quality Fund.

Here’s how peak body Early Childhood Australia responded:

“Achieving quality outcomes for children in early childhood education is highly dependent on the qualifications, stability and competency of educators. However, many are paid relatively poorly compared to those with similar qualifications in other sectors. An early childhood educator can earn as little as $18.58 per hour, where as award rates in the metal trades industry start at $23.89 per hour. There is no justification for this – it was a clear case of inequality with early year’s education being seen historically as 'care' work.”

While there were quite a few criticisms of both proposed payments, their primary sin from the Coalition viewpoint was that eligibility for the payments was generally dependent on both categories of service having enterprise agreements in place, which are usually negotiated by unions. Was this criterion supporting the unions, per se, or trying to solve the key issue of how government can ensure its subsidies are actually used to increase wages?

These service sectors are largely run on commercial lines, so extra funds can be redirected to profits. The ASU decision used awards as the basis for rises,  but the government chose to tie these to the enterprise agreement process. This approach has, not unexpectedly, offended the Coalition. It signalled its intentions just before the election: 

“The Coalition has strongly criticised Labor's aged care "Workforce Compact", which offers a wages supplement to employers who lift wages to a certain level and sign an enterprise bargaining agreement, arguing it is too costly for providers and is designed to help aged care unions boost their member numbers.”

While some aged care providers are pleased that the rather complex system has been withdrawn, others are concerned that rises promised from July this year will be further delayed, if not lost. The problem remains of how to deliver a needed rise to the workers through a diverse, often market driven sector. In the meantime, underpaid workers will continue to leave the industry or live in poverty.

The child care story is a little different.

The federal government recently announced a partial solution by offering funding for a $3-$5 per hour pay increase for some daycare staff over the next two years, under the Early Years Quality Fund, described by Early Childhood Australia as "a well intentioned policy designed to address the significant inadequacy of wages paid to some early childhood educators”.

The extra money was dependent on centres that had an appropriate enterprise agreement, which many did not. The $300 million allocated was also not enough as it could only cover 40 per cent of the workforce for two years, then runs out. Most centres would miss out, and those who were included would be in trouble when the funds ran out. Presumably, the government hoped for an award rise but without certainty. Again, stopping the funds will result in many workers leaving because they will earn more in similar government jobs, or even stacking shelves at the supermarket.

The revevant union summed up the problem: "United Voice has no interest in increasing costs for centres and fees for parents,'' it told a Senate inquiry. "Society as a whole - through the federal government - must provide the funding to ensure that any new wage rates decided by that case are delivered to educators''.

How the incoming government deals with this urgent issue will be closely watched.