The UBP has pledged to consider doubling maternity leave if elected, but will it do more harm than good? It’s a nice thought for making pregnancy easier for mothers, especially single mothers but what are the implications? How will it impact businesses? What will it do to the stature of women in the workplace and their earning potential? What of women who bear no children? Will doubling maternity leave do more harm than good?
In a recent announcement by the Opposition United Bermuda Party, they pledged that if elected, they would consider doubling maternity leave.
The UBP would institute programmes designed to help people at key stages in life, beginning before birth, with maternity leave.
The UBP would consider legislation to extend paid maternity leave to six months, set up two additional Government-run affordable day care centres for a total of three and subsidize the cost of day care up to pre-school ages.
Doubling maternity leave is a great gesture which will likely go a long way in building support from the feminine voter base, but what are the implications?
How will doubling maternity leave impact businesses? Unfortunately, modifying legislation to force businesses to support 6 month maternity leaves places undue hardship on businesses, especially small businesses. According to the August 2007 edition of Labour Market Indicators, the median annual salary of women in our workforce for 2006 was $48,848. When combined with the average number of children of 2.4 noted for women aged 45 and over by the 2000 Census, we can compare how much maternity leave costs the average business in 3 month and 6 month durations.
Presently, at maternity leave lasting 3 months in duration, women can roughly be estimated to cost a business 7.2 months worth of salary in maternity leave assuming they work for one business throughout their working life. At even just the median annual income of $48,848, that equates to $29,308.8 that the average business spends on maternity leave on every woman. For a small business that employs many women, that number quickly adds up. When considering a doubling of maternity leave to 6 months in duration, or 14.4 months over the lifetime of the average woman, that equates to $58,617.6, which is more than a years salary, in added costs for any business that hires your average woman which adds up very quickly for small businesses.
What will doubling maternity leave do to discrimination against women? Will it encourage pay discrimination and make small businesses less likely to hire and promote women? Just as Newton’s 3rd law suggests that every action shall have an equal and opposite reaction, so can we presume that extended maternity leave will likely yield undesired consequences.
According to the 2007 Labour Market Indicators women earned $3,512, nearly 7% less, in median annual gross earnings than men annually. When considering that education level and job roles may well play a factor in that number, the question does arise of what factor the potential of losing an employee to maternity leave contributes to overall compensation. If the average business spends $29,308.8 on a woman in maternity leave over, lets assume, a 40 year work life, that equates to $732.72 a year in costs to the business which may well contribute to the differential in pay between men and women. If we consider what would occur when maternity leave is doubled, that could equate to $1465.44 per year in costs to the business. If the business is forced to pay an extra $732.72 per woman, will that translate directly into a 20% increase in the differential of pay between men and women? Would it also discourage smaller businesses from taking on the risk of hiring and promoting women out of fear of losing them for 6 months each time they opt to have a child? What of women who have no children who are unduly punished with less pay while not contributing to a company’s loss?
The UBP has pledged to consider doubling maternity leave if elected, but will it do more harm than good? It’s a nice thought for making pregnancy easier for mothers, especially single mothers but what are the implications? Will it have an impact on businesses, especially small businesses? What will it do to the stature of women in the workplace and their earning potential? What of women how have few or no children and the implications in increased discrimination? Will doubling maternity leave do more harm than good?