Thursday 24 July 2014

Why Child Care Will Always Cost Too Much

Why Child Care Will Always Cost Too Much

This week the Australian Governments Productivity Commission has released a report in which it recommends paying child care subsidies to Grandparents and to nannies. Now the Government doesn't have to adopt this idea, it is after all just a recommendation. However it does raise the question of why do Grandparents need to be paid for a job they are currently doing for free?

Childcare, professional childcare that is, fits into the philosophy of all 3 strands of Liberalism. Liberalism believes in the autonomous individual, that each individual should be free to create their own life without restrictions and children are a major restriction. Particularly when it comes to getting or keeping a job. So Right or Economic Liberalism as supported by the Liberal Party, Left or Social Liberalism as supported by Labor and the Greens and Feminism all come together on this issue and agree that childcare is needed and by needed what they mean is paid for by the taxpayer.

If women are to be autonomous individuals then they need to be free of children or else they cannot work. All 3 strands of Liberalism agree on this point but for different reasons. Right or Economic Liberalism believes in the Market, that economic forces are the centre of life and if someone is not part of the market how can they be free? No that won't do, everyone needs to be a part of the market, including mothers. Left or Social Liberalism believes in making people free through social forces and they use the Government to shape those social forces. Mothers must work or they are cut off from these social forces, they must be autonomous individuals. Then you have Feminism who believe that women should be free from male domination, that includes being free from husbands. A women who is an autonomous individual has her own money, her own job, even if married.

But childcare has a built in paradox, the more money that is made available the more expensive it becomes. Even when the aim of that money is to provide subsidies to specifically make childcare more affordable. How can that be?

Well lets look at what costs are involved in running a childcare operation
1) A specially designed space that is available for no other purpose
2) Wages and training
3) Activities to entertain, educate or otherwise keep the childrens attention

Lets say a centre has 20 places, it needs a ratio of staff to children, we will say the ratio is 1 to 5, 1 staff member for every 5 children. That gives a staff of 4, but you also need a supervisor to run the centre, do the paperwork, be an extra pair of hands (and eyes) and to ultimately be responsible for everything. The more children that are enrolled the more money the centre makes, even Government run centres need to make money now days. But the more children, the more staff are needed. The more staff you have the more experienced the staff needs to be. Not all of the staff of course, but you need experienced staff to look after not just the children but also the less experienced staff. To provide training, mentoring and to make sure the children are not put in harms way. But each step costs money. New staff cost money and so does the experienced staff.

When few mothers work then childcare is expensive as it is a great risk to open a childcare centre, unless it is Government run and heavily subsided. As more mothers start to work the cost goes up, childcare is a rare commodity and it has just become rarer. Over time as more mothers work then the cost goes down, but it has entered a cycle of boom and bust. Parents want those who look after their children to be trained and that costs money, both to provide the training and in increased wages to encourage the training. Each step to increasing the numbers of children in childcare and to make the staff more professional cost money. And because of the low ratio of staff to children means that there is no economy of scale. A costly industry just keeps getting more expensive.

Even if every mother worked and her children were in childcare the costs would not go down by much. The reason is that the childcare industry is not designed to be cost effective, it is designed to separate mothers from their children. The cost is not important to anyone but parents. The industry doesn't believe it can cut costs in a way that would be acceptable and I think they are correct to believe that. Government likes the control it has over children in childcare and lets be honest Government is not renowned for keeping costs down. And every political party wants mothers to work, the cost in money or to families is unimportant, what matters is their ideology.

As for paying Grandparents to do a job they are already doing for free, once they accept the money then the Government will be calling the tune. Will a Grandparent be allowed to spank a child? Will they be able to feed them what foods they think is right or only the foods the Government thinks is right? Will Grandparents be required to undergo training to look after their own grandchildren? If you refuse the Governments money does that mean you are regarded as more likely to be abusive and require more Government supervision?This is a dangerous idea and people should remember that rarely do these things happen all at once, normally they start with something reasonable and progressively move to something unreasonable.    

The real problem with childcare is that it separates mothers and children. And the ultimate reason it will always cost too much, is that it seeks to improve on a very cost efficient and practical solution that we already know works. A mother looking after her own children while being supported by her husband.

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