For most parents, giving their child a great shot at life is a fairly common ambition.
Modern neuroscience tells us the answer isn’t hours of remedial high school tutoring, but enriching their social, emotional and educational experiences in early life.
By age 15, children of similar backgrounds who attended more than one year of pre-primary education averaged a whole school year ahead in maths compared to those who didn’t, according to the Organisation for Economic Co-operation and Development (OECD).
Yet in Australia, those charged with educating our young children are paid as little as $21.85 per hour — some of the lowest rates in the entire economy.
An entry-level childcare worker could earn more in almost any other industry, including aged care, cleaning, administration or retail.
And the sector looks to be voting with its feet — Skills Commission data confirmed this year has seen record job vacancies despite huge and increasing demand.
Analysts agree wages must increase, it’s just a question of how.
How did we get here?
Many educators have said the conditions that led to the strike didn’t happen overnight — they’ve been a problem for years.
Most experts have also said if they could design the sector again from scratch, they would make early childhood education universal, and part of the school system, like years K-12.
Instead, it’s a hodgepodge of providers: some for-profit, some not-for-profit, and some community or council-run.
In fact, compared with educating other age groups, both state and federal governments have historically had very little to do with how the early childhood sector operates, leaving wages to be set by the market.
Queensland University laureate professor Karen Thorpe said that mixed market had delivered a wide array of services and price points for parents.
“For example, some of those for-profits deliver really well, but they’re in areas where they can generate high fees,” she said.
“In lower-income areas, for-profits are having to balance what they provide against profit.
“That’s always a tension that makes it more difficult to deliver high quality.”
In July next year, those subsidies will swell by more than $5 billion, as the Albanese government expands eligibility to higher income earners and boosts subsidies for those already getting them.
The move has been billed as a productivity measure allowing a flood of parents — most of them mothers — who were previously priced out of childcare to return to the workforce.
The government has also tapped the Australian Competition and Consumer Commission (ACCC) to investigate the cost of childcare.
Finance Minister Katy Gallagher said the $11 million, year-long inquiry would be crucial to cutting costs for families.
“We want to make sure that we’re getting the right information about what some of the drivers of those cost increases are, so we can actually respond to it,” she said.
Treasurer Jim Chalmers said the ACCC inquiry would provide interim advice to the government ahead of the childcare subsidy increase in July.
However, the government has said little about how it plans to entice workers back to the sector before the subsidy kicks in.
Where’s the money going?
Grattan Institute chief executive Danielle Wood said while the inquiry was not a silver bullet, it would help explain where money was going, if not into worker’s wages.
“There certainly seems to be some money in the value chain, and whether that’s going to operators or landlords, I think is a really important question and will inform the ultimate policy design in order to address it.”
“I would like the ACCC to really unpack where it is that money is being made in this sector,” she said.
“At the moment, we have a world where the government’s putting in a lot of money, parents are making big contributions, but our educators are not well-paid.”
Dr Wood said there were a number of regulatory mechanisms for the ACCC to consider as solutions.
“It may be that we need to move to more regulated prices, or a system that looks more like private health insurance, where price increases need to be approved each year by the government.”
Government must ‘be bold’
Some groups, including Early Childhood Australia and the United Workers Union, have called for a JobKeeper-style subsidy to direct money straight into workers’ pockets.
Professor Thorpe said she believed it was necessary to increase wages across the board.
“I don’t see there’s any answer other than to be bold with it, as they have been with the childcare subsidy,” she said.
“The government has been very bold with aged care, and they’re going to have to be very bold with childcare.
“No matter what they say, the need to have improved pay is a key issue.”
But Dr Wood said the risk with a subsidy was that the government might wind up footing a bill providers should be picking up.
“How do we know then the centres don’t just defer what pay rises they might have otherwise offered and pocket the additional money?” she said.
“How do we make sure that governments continue to create that wage certainty, that they keep providing that subsidy forever for each and every year?”
Dr Wood said the government would be better to push for an increase to the award.
The government’s not yet committed to doing that, though it successfully advocated to lift the minimum wage, which happened in June.
Why childcare workers went on strike
Childcare workers held the industry’s largest-ever strike, saying increasing demands and pay barely above minimum wage have them at breaking point.
“There is a case at the moment in front of the Fair Work Commission from aged care workers, saying that their work should be more highly remunerated,” Dr Wood said.
“I would like to see childcare workers go down a similar route.”
Dr Wood said she did think there was a need for a stop-gap investment, given a Fair Work claim was unlikely to be resolved before the childcare subsidy boost kicks in for parents.
“When we make childcare more affordable in July next year, we might have to look at interim measures and something like a bonus, which is geared around trying to retain existing workers, as well as signalling to future workers that this will be a more attractive place to work in future.”
‘Substantive’ issues at play
Early Childhood Minister Anne Aly has dismissed calls for any government boost to pay.
“The issues are much more substantive and much more long term than something that can be solved by a single one-off payment,” she said.
“We need to have a much longer-term vision for this.”
In outlining that vision, Dr Aly agreed the government’s Fair Work changes were key to lifting pay.
“The Fair Work changes are really about addressing the gender pay gap … and strengthening the ability of the Fair Work Commission to order pay rises for underpaid female workers.”
The government plans to enshrine the principle of gender equity into the Fair Work Act, allowing workers in traditionally feminised industries to argue for more pay on new legal grounds.
Given more than 90 per cent of early childhood workers are women, Dr Aly said this would have a direct impact.
“Fair Work will be able to look at someone with a Cert III in early childhood education, for example, versus someone with a Cert III in a trade or any other kind of sector, and look at where there’s a pay gap and what that pay gap is, and look at ways to bring up that equity and pay.”
The minister said funding two new expert panels on pay equity and the care and community sector would also help, along with allowing multi-employer bargaining.