The federal government’s announcement this week on pay equity for the early childhood workforce is an important step for the childcare sector.

But in the long term, it will provide little more than a stop-gap measure for improving wages among early childhood professionals.

Without a plan to provide incentives for investment in early childhood businesses, the sector will continue to rely on government subsidisation to make pay rates equitable and to attract qualified professionals into the workforce.

Political minefield

The debate surrounding early childhood sector wages has often been spiked with union propaganda on one side, and poorly considered assertions from conservative politicians on the other. Not the least of these is Tony Abbott’s continual invoking of “in-home care” – a veiled reference to employing nannies, or for relief to families who prefer mothers to stay home and look after the kids.

The fact the ALP has yet to think far enough ahead to develop a business model for the early childhood sector may reflect a concern that Australians are not yet ready to accept the economic facts.

For example, according to 2011 OECD research on family policy tools, a “missing earner” in a two-parent family constitutes the biggest single risk that a family will drop below the poverty line in Australia.

When one parent takes parental leave or drops out of the workforce altogether to care for a new child, earnings decrease accordingly.

The message is that by 2050, those developed economies where women continue to provide care for children themselves and drop out of the workforce to do so will suffer widespread falls in productivity and growth.

Productivity rates are normally correlated to labour costs, and to the value of a product or service: when childcare costs are not commensurable with women’s wages we should expect that women have less incentive to enter the workforce.

Wage war

The childcare sector is 98% composed of female staff. Increasing pay equity in this profession symbolises the ALP strategy to combat decreasing productivity growth by tackling the complexities of our labour market.

But it also speaks to the necessity of attracting women into the workforce more generally.

This is a problem conservatives do not appear to have analysed sufficiently. Tony Abbott leaves himself open to criticism that he is propping up antiquated traditions about the family (code for a male head-of- household) so he can cling to economically unsustainable views about the labour market (that women are supplementary to the “real” earners).

Abbott’s conservatives would do well to acknowledge the significant stream of economic research that has shown that wage rates among traditional male breadwinners have experienced volatility – even decline – since the 1930s, across most developed economies.

The post-war concept of “human capital” challenges an older economic language, which idealised industrial work as a masculine responsibility.

Indeed, the very fact that a conservative government introduced the Child Care Act in Australia in 1972 (albeit largely as a means of regulating charities that catered to single mothers and other disadvantaged families) reflects the historical shift toward women being regarded as an important human resource.

Bringing women into the workforce alongside men was a way of lowering labour costs when they began to be unsustainably high due to the efforts of organised labour unions.

Valuing women

The suppression of women’s wages by the labour market ought now to be seen as an impediment to productivity growth, especially if we accept that the value of women’s work must increase in order that poverty risks can be ameliorated.

The ALP policies surrounding the new Child Care pay package include incentives for single parents to re-enter the workforce. When the Greens call for money to be spent easing childcare cost burdens on families, and increasing welfare to single mothers, they do not appear to comprehend the ongoing economic complexity.

On the other hand, the difficulty that many people have understanding the nature of many government reforms in this area suggests a failure of communication. The vision that is necessary to stimulate private enterprise within the early childhood sector is not on offer.

If tax incentives could be modelled around the unique service factors which currently plague the childcare sector this might reveal a way forward. Tying the funding to adherence to National Quality Framework criteria suggests that the government has a concern about whether childcare providers more generally are accepting current policy reforms.

My guess is that this will not be a successful tactic in those remote communities where access to services and availability of professional resources are still hard to come by.

Unless we start framing childcare and the women who work in the sector as essential to Australia’s productivity, it seems the message will never get through.