Mothers, work and the cost of living

By Annah Psarros, Senior Policy Officer

Loss of earnings, discrimination from employers, lack of employment rights and outdated notions of women’s income as ‘non-essential’ are some of the factors that disadvantage pregnant women and new mothers at work. The poorly designed system of statutory leave for fathers and second parents has been a missed opportunity to redress the balance. With the ever-rising cost of living, women’s place on the employment market may be more important than ever. So what needs to change?

UK women on maternity leave are some of the worst paid among their international peers. As only around 13 per cent receive Occupational Maternity Pay from their employer, the vast majority receive Statutory Maternity Pay or Maternity Allowance – ￡172.48 per week at the basic rate. This is less than half of the national living wage and a little over a third of UK women’s median weekly earnings. Women’s incomes take a serious hit when they have a baby, and this impact on earnings can often continue far beyond the period of maternity leave.

We know that women’s earnings stagnate when they become parents, while men’s earnings tend to increase. This pay gap is so well established in research that it has a name – ‘the motherhood penalty’. As well as low rates of pay, the way maternity pay and leave policies operate can also hold women back.?

Despite longstanding legal protections, workplace discrimination and poor treatment of pregnant women and new mothers are still common and affect as many as 77 percent. These experiences put women’s jobs at risk and can impact on the choices women make about their roles and even their earning potential in the longer-term. Josephine, a panellist in our Lived Experience group, told us about becoming unexpectedly pregnant in a new job and missing the qualifying period for Occupational Maternity Pay by a number of days. She was supported by her manager to negotiate with HR, but now felt that she could not change jobs again because of this.

‘My line manager was compassionate and that was the only reason I got what I got. I felt like I was indebted to him. Now I don’t want to change my job because I want to keep my manager. I made this switch to improve my career and it came back to bite me.’ Josephine, Lived Experience panellist.

UK maternity policy would seem to be based on a number of faulty and outdated assumptions, the first of which is the presence of a higher earning male partner who can step in to cover the financial gap created by maternity leave. In reality, many women are now the higher or sole earner in the family and in couple families, dual incomes are becoming the norm. The second implicit assumption is the possibility of planning a pregnancy around qualifying periods in order to fulfill criteria such as 26 weeks of continuous employment. In reality, research suggests that only around half of all pregnancies are planned.?

Women are also 2.7 times more likely than men to be in ‘severely insecure work’, characterised by variable hours and a lack of rights and protections. This has impacts not only on eligibility for maternity leave but also on the amount of pay received, if the pregnant woman has earned less than usual during the calculation period that determines her level of maternity pay. Women who have been on Statutory Sick Pay during their pregnancy are also vulnerable to this. It is profoundly unfair to exclude some women from maternity pay due to factors beyond their control. The rise of insecure labour in recent years, has contributed significantly to this injustice.

Flexitime is currently only offered by around 22 percent of employers and the ever-increasing cost of childcare now swallows up more than 60 percent of women’s median earnings. It is perhaps unsurprising that many women decide to go part time after becoming parents – only just over half of women who work full-time before having a baby continue to do so after maternity leave and, out of those who reduce their hours, just under half take on a lower skilled job in order to do so. Gabriella, one of our Lived Experience panellists, left a well-paid professional job for a minimum wage role when she had her baby, due to a lack of flexibility.

‘I will be here for another 2 or 3 more years, until the little one can be enrolled in after school activities to stay until 6 pm. Then I can have a proper job, 9‐5. Before, I had a professional career. Now I am on minimum wage. I was earning 50k but now I am earning around 12K.’?Gabriella, Lived Experience panellist.

Add to this a lack of options for fathers and partners who want to share parental leave and gender inequality is further entrenched. Beyond the two-week maximum statutory paternity leave, there is Shared Parental Leave (SPL). When SPL and Shared Parental pay (ShPP) were introduced in 2015, it was with the intention to help address gender inequality ‘in terms of attachment to and position in the labour market’, partly by challenging the presumption that the mother would always be the one taking leave with a new baby.?

Arguably, SPL has been an immense failure in this respect, as uptake is calculated to be less than 3 percent of eligible fathers. Uptake is highest among white, well-educated higher earning men in receipt of occupational pay enhancements to their ShPP, or men in female-dominated, unionised workplaces. The policy, which requires women to forgo some of their maternity leave in favour of their partner, has drawn much criticism for being ‘poorly designed’ and ‘overly complex’ as well as poorly paid. ShPP matches the basic rate of SMP and MA, which constitutes a substantial pay cut for most men – especially as the pay gap remains unaddressed.

So, what needs to change? In order to support women to access entitlements and to remain in work, we recommend the following measures to strengthen women’s position in the workforce, address gender inequality and underpin women’s financial security and self‐sufficiency:

• Rights and protections at work should be strengthened, including a right to flexible working and family friendly working arrangements.
• Legal advice should be integrated into maternity services, following a health‐justice partnership model, which links pregnant women and new mothers with advice services through their midwife, enabling them to access benefit entitlements and exercise their rights at work.
• The 30‐hour entitlement to childcare should be available to families straight after maternity leave, rather than at the age of three, enabling women who wish to do so, to remain in employment and continue earning.
• Shared Parental Leave should be replaced with the ‘6+6+6’ model of six months’ maternity leave, followed by a further six months of non‐transferrable parental leave for each parent. Parents should have an individual right rather than ‘shared’ entitlements.?

Read our new report ‘A Perfect Storm: pregnancy, new motherhood and the cost of living crisis’ here .

Find out more about how you can get involved in our cost of living on maternity leave campaign here .