New Mothers Miss Out On £70,000 Of Earnings. Hello everyone, I hope you are well. In today’s post, I will be sharing a press release from the Social Market Foundation, sharing how new mothers miss out on £70,000 of earnings due to the childcare crisis. The Social Market Foundation (SMF) is a non-partisan think tank. They work to promote evidence-based policy and cross-party cooperation in politics. As well as to educate the public and their representatives about how better policies can deliver greater wealth, happiness and fairness.
New Mothers Miss Out On £70,000 Of Earnings
Childcare Crisis means new mothers miss out on £70,000 of earnings
Women who have a baby miss out on almost £70,000 in wages over the following decade, according to a new analysis of the impact of Britain’s childcare provision. The Social Market Foundation revealed the new figure as it launched a cross-party commission on childcare led by Conservative and Labour MPs.
The commissioners, John Penrose MP and Siobhain McDonagh MP will work with the SMF to analyse the impact of poor childcare provision on wages and poverty and ways to improve provision.
Siobhain McDonagh, Labour MP for Mitcham and Morden, said:
“These shocking findings expose the urgent steps that need to be taken by the Government to close the inequality that is the cost of childcare poverty gap. This new Commission will work cross-party basis to help find those desperately-needed policy solutions.”
The SMF, a cross-party think-tank, revealed that a woman who had her first child in 2010/11 typically suffered a cumulative income loss of £66,434 over the following nine years, relative to what would have happened if she had remained childless.
John Penrose, Conservative MP for Weston-super-Mare, said:
“Affordable childcare is essential for any parent who doesn’t want to put their career on hold. Without it, parents get trapped under a glass ceiling where they can’t work a few extra hours to improve their pay, apply for a promotion, or switch to a job with different hours. This research from SMF shows current childcare has cripplingly high costs. We can’t afford to put off reforming it any longer.”
The income loss figure measures the money a woman would have earned if her career had progressed in the way that similar women without children earn. It does not take into account of the additional spending that parents face.
The figures are based on a new SMF analysis of the Understanding Society dataset, which tracks the experiences of around 30,000 people over decades.
Looking at women who were 25-35 in 2009/10, the SMF found that the typical woman who remained childless would have seen her earnings rise by around a third over the next decade. By contrast, a woman who had her first child in 2010/11 earned 10% less.
Women on lower incomes face the biggest losses in earnings in their child’s early years, the SMF found. In the first three years after having a baby, women on lower incomes saw their earnings fall by around 30%. But women with higher wages saw their earnings drop by around 20%.
The SMF said that the high cost and limited availability of childcare mean it is often not possible for parents to work as much as they want to, leading to reduced earnings, stalled wage growth, and limited career progression.
“In the UK, having a child is expensive – particularly for women. With childcare costs prohibitive, many either have to stop working or work reduced hours to look after children. This means derailed career paths, missed promotion opportunities, and tens of thousands of pounds of foregone earnings over the course of a decade.
“No government can claim to have solved the cost-of-living crisis – nor to be doing the most to achieve gender equality – if childcare costs remain unaddressed. This is a national problem that needs a national solution. Our new cross-party commission will provide some answers to deliver the high-quality and affordable childcare that Britain needs.
Britain has some of the most expensive childcare in the developed world. Families paying for childcare typically spend more than 7% of their income on it, the SMF has calculated. Families on the lowest wages pay the highest share of their income on childcare.
The SMF Childcare Commission will now carry out more data analysis, take evidence from key stakeholders and make recommendations later this year on making Britain’s childcare provision work better for families and the economy.
I hope you enjoyed that.
About The Social Market Foundation
The Social Market Foundation (SMF) is a non-partisan think tank. We believe that fair markets, complemented by open public services, increase prosperity and help people live well. We conduct research and run events looking at various economic and social policy areas, focusing on economic prosperity, public services and consumer markets. The SMF is resolutely independent, and the range of backgrounds and opinions among our staff, trustees and advisory board reflects this.
The Social Market Foundation promotes evidence-based policy and cross-party cooperation in politics. From our base at the heart of Westminster, we publish research on public policy and convene conversations that improve policy-making and public debate. A registered charity, our mission is to educate the public and their representatives about how better policies can deliver greater wealth, happiness and fairness.