Pink Recession 2020 Report: Aussie mums bear brunt of family finances
Quick facts from our report:
- Working women have been caring for the kids four times more than working men during COVID-19.
- 83% of women generally act as a primary carer for their children, compared to 17% of men.
- 67% of men take only three months of paternity leave before returning to work.
- 38% of men say they earned more after caring for a child, compared to 17% of women.
- Almost half of primary carers (40%) return to work earlier than anticipated due to financial strain.
With the economy in flux, there’s even greater pressure on Aussies to stay on top of their finances. But the strain is perhaps greatest on working mums. Mozo’s latest research shows that during the COVID-19 lockdown, 28% of women acted as the primary career for their children, while also working, compared to just 7% of men. Mozo Director, Kirsty Lamont says that being a primary carer heightens your workplace vulnerability with many of our survey respondents reporting they have struggled to make strides in their career after taking leave. This is creating what might be best termed, a ‘pink recession’: a long-term financial crisis for many working women.
Introduction: The parent trap
Late nights and early mornings are never eased by money worries. But that’s what plenty of Aussie parents, and especially women, deal with on a regular basis. Mozo’s new Pink Recession Report shows that female primary caregivers reported higher levels of career plateau, regression and job loss than males. And in terms of salary, only 17% of women said they began to earn more money after caring for a child, compared to 38% of men. These numbers denote an ongoing trend that there’s a pressure for parents to get back to work after having kids. This pressure is acutely felt by women however, who typically find it harder to progress their careers after taking time off to care for their young children.
Topline stats: Less time at home
To be fair, both parents have less time at home nowadays. Mozo’s study found that one in five primary carers overall took less than four months of leave. And when it comes to dads, time at home with the baby is typically short, with 67% of men taking only three months of paternity leave before returning to work. Furthermore, Mozo’s survey of more than 1000 parents showed that almost half of primary carers (40%) returned to work earlier than anticipated due to financial strain.
While it should be said that some dads are probably reluctant to spend less time with their families, the general outcome has been greater pressure on mums, especially those balancing the demands of a job as well. This financial strain is enhanced by many things, including the ongoing cost of raising a child, the difficulty of saving money amid regular family expenses but also the pressure to retain a job in a tighter job market. Overall, women are most greatly impacted by this situation, typically taking on most of the primary carer work at home, while not being remunerated in the same way as men when they do return to work, as per Mozo’s findings.
Mozo spokesperson Gemma Rasmussen says the pressure to return to work is the result of several factors, including sluggish wage growth, high childcare fees and the increases to the overall cost of living. She says the majority of Australian families are simply feeling the “financial squeeze.”
“Having a child is stepping into the great unknown. It’s a complex, wonderful, exhausting and life-altering experience, but unfortunately, many parents are struggling to keep the wheels turning,” says Rasmussen.
Prime movers? Women more likely to stall in their careers
According to Mozo’s research, 83% of women acted as a primary carer for their children, compared to just 17% of men. Women even experienced a bigger change in routine, with 65% admitting they now worked less hours than before having children. There was also a clear link between getting back into the office and career progression, as per the figures above concerning salary growth.
Although being a primary carer has meant putting their career on hold, 67% of all respondents said they were able to return to the same job, 16% moved onto a different job and one in five stopped working entirely.
Savings: Struggling to get ahead
The reality of raising a child is that it can be very expensive and requires significant upfront costs. This means saving money can be much more difficult, too. To this end, Mozo’s data revealed that only 10% of parents who are primary carers are in a good financial situation and are continuing to make regular contributions to their savings.
Additionally, one in five parents confessed to be ‘financially stressed and in debt’ since becoming a parent.
“The sad reality is that for many parents across Australia, having a child or children is synonymous with financial strain and more workplace pressure,” says Rasmussen.
This undoubtedly fuels the need among many men to return to work as soon as possible.
Lastly on our findings, younger parents aged between 18-24 were reportedly the most financially vulnerable group, with one-third claiming to be in debt, compared to one in four 25-38 year olds.
Budget tips: How Aussie parents can financially prepare
If 2020 is the year you’d like to expand your family, having a budget is essential. Rasmussen says it’s about going back to basics and ensuring you’re ready for the financial side as much as the more enjoyable side of parenting.
“For a period of time, it’s likely you’ll have lower incomings and higher outgoings, so understanding where you stand financially can help stop you going into the red and ease family stress,” she says.
There are, of course, other ways to reduce costs before your baby arrives, including:
- Switching to a better value energy plan
- Reducing credit card debt
- Increasing your savings with the right account.
Mozo can help guide your decisions. For example, why not start by researching bank account options with our savings account comparison tool.