Benefit cuts, childcare costs and marriage tax breaks are forcing families back into a single breadwinner model
At the start of the week Save the Children and Daycare Trust released figures to show that childcare is now so expensive – having increased every year for a decade – that many low-income families simply can't afford for both parents to work. I went on Sky Sunrise at some improbable time to talk about it, and Eamonn Holmes said: "Of course, private nurseries are getting rich." To which I replied, "That's quite right", while thinking I actually have no idea how to make money out of a nursery but someone must be getting rich, surely. You can't have a whole cohort of society inched out of work by the brutal marketplace without someone getting rich.
In fact children are impossible to make money out of. Average nursery fees are £177 for a 50-hour week, which is £3.54 an hour per child. Ofsted regulations require a ratio of one adult per three children under two years old, but staff need a minimum of NVQ level 2, and a manager needs level 3, plus two years' experience. So you couldn't get them for minimum wage. I haven't even factored in overheads or bought any toys. Sure, there are elite nurseries where costs are a lot higher, but in the mainstream there's no moneybags at the top, building an empire on a pyramid of toddlers and cackling.
And yet if you imagine the working parent is at or near the minimum wage, paying for childcare out of net income, of course, and also has to travel to work and cover the travel time when the nursery's still working but she isn't, then she is only just breaking even.
With more than one child her own work puts her out of pocket. The OECD issued a sober warning about child poverty in the UK last month in which it noted: "After accounting for childcare, over two-thirds of the family's second wage is effectively taxed away: a rate that is well above the OECD average (68% in the UK v 52% on average)."
The last government subsidised childcare for low-income families by 80%. The coalition has cut that to 70%, which sounds small, but they estimate a saving of £280m in the first year, rising to £350m in the second. So, having never been easy, things are about to get harder for low-income families. But it's a mistake to limit this question to low earners: those on a middling income are by no means immune, being ineligible for subsidy yet still having most of their income consumed by nursery costs.
Nannies are taken as the Rolls-Royce option of the spoilt woman, which is why nobody ever talks about the economics of having one – or, if economics are mentioned, it's from the rabidly individualised, ersatz-feminist position of: "Why can't I have a tax break on my nanny when a man can have one on his chauffeur?" In fact nannies aren't just for the chauffeured classes – taking into account the area you live in, the number of children you have, the shadow economy of course, it's often no more expensive than nursery, and here's how the figures break down.
Let's say you have two children and pay £100 a day – this is assuming that you're not going to bargain them down to the lowest wage possible – since your endgame is your children's wellbeing, you want this person not to hate you. That's £500 a week on your net income (I'm also assuming that you're dodging employer's national insurance contributions ... and that is a pretty big assumption), so just for your job not to cost you money, you must be earning £35k annually. Median earnings in 2009 were £20,801, and if you like you can adjust that down for women, in line with the pay gap, which still stands at 12.4% for fulltime workers). Don't forget your packed lunch.
The reality for many women is that their work is cost-neutral, and they do it not to hold their spot in the workforce, for their NI contributions or eventual pensions, but because the alternative is to look after their own children all the time. Conservatives like to pretend that men are maladapted to childcare: second-wave feminists like to pretend that intelligent women are maladapted to childcare. In fact, the problem with children is that they are a bit childish: most people want to look after them some of the time. Very few people want to look after them constantly.
From a government perspective all that counts is whether policy forces households into a single-breadwinner model. It does at the moment, and that will become more pronounced as the childcare subsidies are reduced and the universal credit comes in.
Is this bad for society? From a free-market perspective it is, since female workforce participation is good for the economy as a whole. From a liberal perspective it discriminates viciously against single parents. From the Tory perspective it is brilliant: if you incentivise marriage and simultaneously force women out of the workplace, the state's financial duties dwindle even at the very lowest incomes as wives become the responsibility of their husbands. From a feminist perspective this is madness. Financial autonomy is indivisible from equality. You can give it up for a while, as anybody who has children inevitably will, but you can't give it up for long. And more to the point, you cannot give it up quietly.