The high cost and limited availability of child care is one of the major burdens facing working families today, particularly in the US, but also in the UK and other countries: Parents are spending a sizable chunk of their incomes on child care, making career decisions based on these costs, and sacrificing earnings by pursuing flexible schedules or part-time work in order to make more time to spend with their children.
Unable to afford full-time child care, many mothers (and it’s almost always mothers) are forced to work part-time or drop out of the workforce entirely to take care of their children, especially when they have more than one. Because responsibility for child care still falls predominantly on women, this factor contributes heavily to the gender pay gap.
In the US, a historically tight labor market is driving employers to reckon with this problem, now that they are feeling it more acutely than ever, Jennifer Levitz reports at the Wall Street Journal. Levitz hears from employers around the country that are increasingly concerned about retaining female employees amid a dearth of child care options and have begun to look for ways to expand these options for their employees, including lobbying state governments for legislative solutions. Some coworking spaces have also experimented with child care programs as a benefit for their members.
The gold standard of child care benefits are on-site facilities, such as Patagonia famously offers at its Ventura, California headquarters and its Reno, Nevada distribution center. While these services are expensive to implement, Patagonia maintains that this investment nearly pays for itself between tax incentives, better retention, and lower turnover. From an employee perspective, on-site daycare is the family benefit most preferred by employees all over the globe, according to our research at CEB, now Gartner. This is particularly true in the US, where employees are twice as likely as in other markets to say they would prefer on-site daycare over a 5 percent increase in pay.
The latest report on the gender pay gap from the UK’s Institute for Fiscal Studies sheds some new light on precisely how becoming a mother leads women to earn less than men—the so-called “motherhood penalty”—and contributes to the gender pay gap. The BBC highlights the key findings:
The Institute for Fiscal Studies report found by the time a couple’s first child is aged 20, many mothers earn nearly a third less than the fathers. A key factor was women working part-time in motherhood, the report said. …
“The effect of part-time work in shutting down wage progression is especially striking,” the report added. “Whereas, in general, people in paid work see their pay rise year on year as they gain more experience, our new research shows that part-time workers miss out on these gains.” The vast majority of part-time workers were women, especially mothers of young children, the report said.
Other studies, including a previous version of the same IFS report, have identified the motherhood penalty as a major factor (if not indeed the factor) driving the gender pay gap over time. These studies have found that even when women and men start out their careers earning equal salaries, disparities begin to emerge in their late 20s and 30s, coinciding with the years in which women are most likely to have children. Because women are expected to take on the bulk of child care responsibilities, it is mothers who are usually forced to take career breaks or work part-time to make room in their schedules for these obligations, while fathers tend to remain at work.
The difficulty of balancing the demands of parenthood with those of a professional career drives many women to drop out of the workforce after having children, especially when their employers don’t offer them the right kind of support. The career setbacks women often suffer as a consequence of motherhood has also been identified as a key factor, and quite possibly the main factor, in the gender pay gap. As employers have become more aware of the challenges working mothers face, more organizations are realizing they need to step up their efforts to retain mid-career women after they start families.
One company that has taken an innovative approach to supporting the mothers in its workforce is Fifth Third Bank, based in Cincinnati, Ohio. Fast Company’s Lydia Dishman notes the success of Fifth Third’s maternity concierge service for women looking to raise a family but stay in the workforce:
Maternity Concierge was started in late January and then rolled out as a virtual concierge for employees of the bank’s locations across 10 states. Fifth Third’s chief administrative officer, Teresa Tanner, says that she took note of how many women she spoke to reached a career pivot point when they began planning to start a family. Tanner says that while benefits like flex time, part time, and job sharing can help, “There’s a big cost to that, you still delay your career or slow it down.” …
Wellesley College economist Sari Kerr is the co-author of two new papers examining the gender pay gap in the US, along with Claudia Goldin of Harvard, Claudia Olivetti of Boston College and Erling Barth of the Institute for Social Research in Oslo. In an interview with Claire Cain Miller at the New York Times, published on Saturday, Kerr discussed what these studies revealed about the prominent role the motherhood penalty appears to play in creating that gap:
The new working paper, which covered the broadest group of people over time, found that between ages 25 and 45, the gender pay gap for college graduates, which starts close to zero, widens by 55 percentage points. For those without college degrees, it widens by 28 percentage points. Much of that happens early in people’s careers, during women’s childbearing years. The American Economic Review paper, which examined people born around 1970, found that almost all of the pay gap for college graduates came from ages 26 to 33. …
Twenty-seven percent of the overall pay gap is from men being more likely to jump to higher-paying firms, the economists found. When married women leave jobs, they are less likely to get a big pay bump as a result. Previous research has found they are more likely to leave without another job lined up; they may move for their husband’s job or take time off with children. But the bulk of the pay gap — 73 percent, they found — is from women not getting raises and promotions at the rate of men within companies.
Kerr and her co-authors are not the first to posit that the motherhood penalty—that is, the loss in earnings and job status women experience as a result of taking on parenting responsibilities—is a key factor, if not the key factor, in the gender pay gap in the long run: A study in the UK last year found the same, while other studies there corroborated Kerr’s findings that women get raises and promotions at slower rates than men do.
In the past year, we’ve been hearing more and more about “returnships”: programs similar to internships for mid-career professionals looking to re-enter the workforce after taking extended career breaks to raise children or care for sick or elderly relatives. While the concept of the returnship is not new, today’s tight talent market has sparked renewed interest in it. Because the vast majority of employees who fit that description are women, returnships have been held up as a way to fill gaps in critical talent segments like tech by reaching out to an oft-neglected cohort, and Silicon Valley employers have been working with dedicated organizations like iRelaunch and Path Forward to bring more mid-career women back in the door. These programs are showing mixed results so far, though it is early days yet and the talent shortage they are meant to address is unlikely to abate anytime soon.
Now, Digiday’s Tanya Dua reports, ad agencies are also beginning to embrace returnships as a partial solution to their industry’s talent and diversity challenges. Advertising is particularly in need of such programs, Dua writes, as “the very nature of the agency business makes it hard for people with résumé gaps to make a return”:
The rapidly evolving state of modern media, marketing and technology makes it harder for returnees to play catch-up. Accompanying that struggle is the assumption that such returnees will not be able to put in as many hours and deal with the unpredictable nature of client demands.
Equal Pay Day, a symbolic event marking how far into the year American women need to work to earn as much as their male peers did in the previous year, based on the current gender pay gap. Last year, Equal Pay Day was observed on April 12, so this year’s slightly earlier date reflects modest progress at closing that gap. According to the Pew Research Center’s latest analysis of the pay gap, US women earned 83 percent of what men earned in 2015, meaning they would have to work an additional 44 days to make as much as men did. While that’s still a substantial gap, the good news is that it is has narrowed significantly in recent decades, and is smaller among younger workers, standing at 90 cents to every man’s dollar among women in the 25-34 age demographic:
Why does a gender pay gap still persist? In our 2013 survey, women were more likely to say they had taken breaks from their careers to care for their family. These types of interruptions can have an impact on long-term earnings. Roughly four-in-ten mothers said that at some point in their work life they had taken a significant amount of time off (39%) or reduced their work hours (42%) to care for a child or other family member. Roughly a quarter (27%) said they had quit work altogether to take care of these familial responsibilities. Fewer men said the same. For example, just 24% of fathers said they had taken a significant amount of time off to care for a child or other family member.
Even though women have increased their presence in higher-paying jobs traditionally dominated by men, such as professional and managerial positions, women as a whole continue to be overrepresented in lower-paying occupations, and this may also contribute to gender differences in pay.
On the other hand, the pay gap is significantly wider for women of color—black women’s Equal Pay Day didn’t come until August last year.
Fast Company’s Lydia Dishman highlights some other recent studies that shed more light on the causes of the pay gap and how women are responding to it:
Although a recent study found that maternity leave was no more common in the US in 2015 than in 1994, over the past few years, a number of major US employers have introduced expansive new parental leave policies in an effort to ensure that their employees, and particularly the women among them, are able to continue and thrive in their careers at the same organization after having children. At the same time, the US, which currently does not require employers to offer paid parental leave by law, may be moving toward enacting some kind of national paid parental leave mandate, though it may only benefit mothers and possibly only those who give birth. Meanwhile, states and localities like New York and Washington, DC are experimenting with mandates of their own, but overall, private companies appear to be moving faster than the government when it comes to mainstreaming parental leave.
From an employee’s perspective, any paid parental leave is better than none, and more is better than less. Bloomberg’s Laura Colby points out that experts believe the ideal length off for new mothers is somewhere between 6-12 months, but they also warn that there can come a point of diminishing returns at which taking more time off work to be with their children hurts mothers professionally more than it benefits their family life:
[R]esearch suggests that an overly long break isn’t ideal. Parental leave policies that extend to a year or two often set women back professionally, says Ariane Hegewisch, program director for employment and earnings at the Institute for Women’s Policy Research in Washington: “It seems to slow down both women’s career advancement and labor force participation.”