Soaring childcare costs ‘pushing women out of workforce’

Soaring childcare costs are continuing to push women out of the Irish labour force, while a “worryingly low” number of women are taking up employment, the National Recruitment Federation (NRF) has said.

In its pre-budget submission, the representative body for the State’s recruitment industry warned that Irish childcare costs - which are among the highest in the 36 OECD countries - are preventing women from working.

The NRF said the rapid decline in unemployment poses “significant challenges for the economy”, and the low participation rates of women over the age of 35 needed to be addressed.

“Childcare, essentially its provision and cost, and aspects of the social welfare system that discourage jobseekers from taking up part-time work, are the main issues to address if women are to be supported in going back to work,” said NRF president Frank Farrelly.

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Women over the age of 35 have lower participation rates in the workforce than their EU counterparts while the lack of availability of affordable and after-school childcare is contributing to these low rates of participation, the pre-budget submission says.

In other countries childcare costs are heavily subsidised by the state, unlike in Ireland where childcare costs are among the highest in the OECD. These high costs are "a particular disincentive" for women to return to the workforce, notes the report.

Ireland is the second most expensive country for couples earning more than one and half times the average OECD wage to pay for childcare, while for lone parents earning 67 per cent of the average wage, it is the most expensive location. The average weekly cost of childcare for Irish parents is €155.60 per week (€622.40 per month), up from €123.50 per week in 2007.

The average weekly cost of childcare is highest in Dublin at €150 per child per week (or €600 per month) and lowest in the south-east of the country at €83 per child per week (€332 per month).

The lobby group also argued the so-called “granny grant” - an initiative to offer €1,000 to grandparents who help with childcare - is an inadequate response for an issue requiring “serious investment”.

“Proper investment in a structured childcare solution is needed, and, in terms of the cost of subsidised childcare, this is expenditure that Government can’t afford not to make, if we are to resource our labour market needs and drive economic progress,” said Mr Farrelly.

The current system of social welfare for people who are in part-time employment, particularly women, is acting as a disincentive to work, says the report, adding that any person who has to sign off the live-register for a full day will be worse of financially and thus may decide not to take up a part-time role.

People are being “penalised and discouraged” from taking up employment opportunities because of current social welfare rules, it warns. Access to social welfare payments should be calculated on an hourly basis to encourage more casual and part time workers to take up employment and thus reduce the financial burden of social welfare for the Exchequer, says the report.

“A well-functioning labour market must also have a well-designed social welfare system that encourages and enables labour market participation and incentives people to take up employment,” it writes. “With long term unemployment and youth unemployment levels still at unacceptable levels and female labour force participation remaining worryingly low new approaches are needed to build in the success of labour market activation measures in recent years.”

The submission calls on the Government to continue to invest in the Early Childhood Care and Education Programme (ECCE) to ensure childcare services are affordable. The programme should be supplemented by out-of-school hours care to address the needs of working parents. It also warns that the education system has suffered “repeated under-investment”, particularly during the economic crisis.

From September 2018, children aged 2 years and 8 months will be able to start ECCE until they transfer to primary school. However, the report calls for the scheme to be extended to include children aged between 1 to 2 years and 8 months.