The state should pay for maternity leave and provide childcare

By now, just about everybody knows what will be the main theme of the Prime Minister's National Day Rally speech, expected later this month: raising the birthrate. Over the last month or so, the almost daily articles in the Straits Times touching on various aspects of this issue, have more than laid the ground for an announcement of new initiatives by the government.

In fact, it has been overkill, which not only damages the credibility of the Straits Times through reinforcing that view that it is little more than a government mouthpiece, slavishly doing the government's bidding, but which also has a tendency to close the subject even before the Prime Minister has made his speech. Singaporeans feel so bludgeoned by the pre-coverage, they will be sick of the topic by the time Lee Hsien Loong steps up to the podium. Indeed, that is the very intention of the pre-coverage, to soften the audience before new measures are announced, making it easier to push them through.

Yet, there's a glimmer of hope. Last year, the same thing happened with the pre-coverage of the national pension scheme, yet the government's changes when finally announced still met resistance, and they had to go back to the drawing board to make some amendments.

* * * * *

 
One thorny issue this year is likely to be a proposal to increase maternity leave, and possibly paternity leave too. Who is going to pay for that?

Traditionally, it is a benefit paid by the employer, obliged by law. But as the benefit increases -- there have already been suggestions that we need to follow the Scandinavian model and extend it to 12 months –- the cost is likely to be huge. If, as hoped, the inducement to have more babies works, then even more the cost to employers go up.

One lesson from the United States, where health and pension benefits are tied in with the employer, is that in the long run, it disadvantages the competitiveness of US-based companies. At the same time, it fails to offer comprehensive coverage because lots of people do not have a fulltime job. Moreover, pushing the benefit cost to the employer has a perverse effect: It makes more sense to create part-time or short-contract jobs than permanent ones.

A recent feature article in the Economist magazine described how the woes of the automobile giants of Detroit -– General Motors, Ford and Chrysler -– could be traced mainly to their pension costs. For decades, when Japanese car makers were lean and mean, and encroaching upon the domestic American market, the Big Three were busy diverting cash into their under-funded pension plans as required by their contracts with their unions, rather than investing in research and development. Today, these three are struggling to stay afloat amid declining market share.

While in these cases, the US motor companies were not obliged by the federal government to be generous, they were still caught up in the social model of the country, where employers were expected to bear the cost of social benefits.

Thus, the lesson to take home is this: Passing laws to require employers bear social costs may be attractive to a government because it lets them off the hook budget-wise, but in a globally-competing economy, it can in the end be lethal to domestic employers.

If Singapore wants extended maternity or paternity leave for its social objectives, the state should pay the cost. The employer should neither have to pay the salaries of people who aren't there at work, nor have to guarantee a job for these individuals to return to.

* * * * *

 
Even 12 months of maternity or paternity leave does not fully address the birthrate problem. There is the question of who will look after the child until he goes to school.

Here again, the existing model is not working well. This model has been built on the assumption that there are parents or grandparents at home to look after children until age 4 when they are old enough to be enrolled in a kindergarten. 

The reality is nothing like that. The old model of a three-generation household is just that: old. Many couples don't live anywhere close to their parents, particularly when we take into consideration the extent to which our birthrate depends new immigrants.

In a topsy-turvy way, an entire (private) industry of childcare centres has grown up to fill this gap, but as a letter in the 4 August 2008 edition of Today illustrates, problems abound:

Both my children went through full-day childcare from the age of 18 months until they were admitted to Primary 1.

In the course of four years, I changed childcare centres a couple of times but eventually went back to the one nearest to where my parents live.

This was to facilitate instances when my husband and I had to work late ­ one of my parents could be easily "mobilised" to pick the children up.

From my personal experience, I would say there is immense room for improvement. The crux of the matter is that the standard of these centres has not improved sufficiently because all of them are, to a large extent, privately-run, so parents do not have many alternatives to choose from.

Which childcare operator is not concerned about its bottom line? No matter how many guidelines the Ministry of Community Development, Youth and Sports (MCYS) stipulates, how much policing can be done?

Does the MCYS know how much chicken or fish or egg the children are given in their meals each day? Most of the time, it is a portion that just about meets the guidelines. Parents may complain but most have no choice but to accept the standard of care.

I strongly urge the Government to take over the childcare business completely and to dedicate a generous budget and commitment to the programme.

This will give parents complete peace of mind that their children are in good hands while at work.

A measure like this will surely boost the birthrate.

Tan Chor Hoon

There is one other problem hinted at in the letter, which is that almost all childcare centres open for limited hours, serving only those parents who work 9 to 5 on weekdays. This again, is nothing like reality. Since we now speak of a 24-hour economy, there should be options for childcare whatever the time of day (and weekends), because the fact is that parents work all sorts of shifts and hours.

Hitherto, the state has taken a piece-meal, hands-off approach to childcare. We see schooling as a state matter, but not before then.

This clearly has to change. If we want people (not just women) to maximise their potential by being in the workforce, then clearly, the state cannot abdicate responsibility for childcare prior to schooling age. It means a major, state-driven expansion of childcare facilities, and closer control of quality standards. 

No doubt the budget consequences of this proposal scares the hell out of our government. Unfortunately, we have for too long been living under the illusion that a society can go all out to be an economic dynamo, reap its benefits, keep taxes low, and somehow expect social and demographic conditions (and costs) to remain the same as in the pre-dynamo age.

Of course, they won't. The economic gains come at a price: social strains, demographic collapse, personal stress, environmental degradation and general destruction of happiness.

The issues of birthrate, maternity/paternity leave and childcare are part of a looming question of how sustainable this "economic growth at all cost" model is -– a question that is not confined to Singapore. Too many countries have bought into this rather skewed measure of progress, and one by one, they will need to confront the dilemma, and revise the social contract.

© Yawning Bread 

Footnotes

None

Addenda

None