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Mothering a crisis PDF Print E-mail
Saturday, 30 June 2018 00:00
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Given India’s low female workforce participation and the lower wages that women earn, partly the result of them having to take time off to bring up children, it is not surprising that the government should want to try and fix this. In 2017, the Maternity Benefits (Amendment) Act mandated that women get 26 weeks of paid maternity leave—as opposed to the 12 that was allowed earlier—and workplaces have creches. It also allowed women to work from home under mutually agreed terms with the employer after the period of the leave, which wasn’t allowed under the original law. Given the WHO recommends that an infant be breastfed for at least the first 24 weeks, the paid 26-week maternity leave should seem a progressive step. But, a recently released Teamlease study finds that this could have a negative bearing on the hiring of women in the short-term.

The Teamlease survey of 300 employers in 10 sectors finds that while large, professionally-run firms will encourage hiring of women to meet their respective diversity goals, given the benefits are fully-employer funded, small firms will likely scale down hiring of women. The latter will face daunting cost implications—post-maternity retention of white-collar women employees will cost 80-90% of their annual salaries while retaining blue-collar ones could cost up to 135%. Given how the bulk of employment is in the informal sector, Teamlease estimates, that 11-18 lakh jobs for women will be lost because of the implementation of the Act, over the first four years. To be sure, the study predicts—based on the employers’ responses—that pregnancy- and child-rearing-related attrition will fall from 56% today to 33% over the first four years. But, logically, this would apply only to those organisations that don’t start reducing the hiring of women. Thus, the bulk of this retention is likely to be concentrated in large, professionally managed companies. For private firms, much depends on whether or not those firms that are enthusiastic about the Act are able to build success stories for others to emulate.
Given that any benefit has to be relative to income levels, even though socially desirable, it is not clear whether India can afford such benefits—especially when many of its competitors don’t offer similar benefits. For example, the US provides up to 12 weeks leave, but that is unpaid. Besides, this applies only to those mothers working for employers with 50 or more employees. China mandates a 14-week maternity leave during which the female employee receives a maternity allowance, assuming she has contributed to maternity insurance, from the Social Security Bureau where she is registered. Indeed, many countries, such as Canada and the UK bear either part of the parental-benefit costs or reimburse employers. India would possibly be able to better its female workforce participation if it did the same instead of making employers shoulder the entire responsibility.

Given India’s low female workforce participation and the lower wages that women earn, partly the result of them having to take time off to bring up children, it is not surprising that the government should want to try and fix this. In 2017, the Maternity Benefits (Amendment) Act mandated that women get 26 weeks of paid maternity leave—as opposed to the 12 that was allowed earlier—and workplaces have creches. It also allowed women to work from home under mutually agreed terms with the employer after the period of the leave, which wasn’t allowed under the original law. Given the WHO recommends that an infant be breastfed for at least the first 24 weeks, the paid 26-week maternity leave should seem a progressive step. But, a recently released Teamlease study finds that this could have a negative bearing on the hiring of women in the short-term.

The Teamlease survey of 300 employers in 10 sectors finds that while large, professionally-run firms will encourage hiring of women to meet their respective diversity goals, given the benefits are fully-employer funded, small firms will likely scale down hiring of women. The latter will face daunting cost implications—post-maternity retention of white-collar women employees will cost 80-90% of their annual salaries while retaining blue-collar ones could cost up to 135%. Given how the bulk of employment is in the informal sector, Teamlease estimates, that 11-18 lakh jobs for women will be lost because of the implementation of the Act, over the first four years. To be sure, the study predicts—based on the employers’ responses—that pregnancy- and child-rearing-related attrition will fall from 56% today to 33% over the first four years. But, logically, this would apply only to those organisations that don’t start reducing the hiring of women. Thus, the bulk of this retention is likely to be concentrated in large, professionally managed companies. For private firms, much depends on whether or not those firms that are enthusiastic about the Act are able to build success stories for others to emulate.
Given that any benefit has to be relative to income levels, even though socially desirable, it is not clear whether India can afford such benefits—especially when many of its competitors don’t offer similar benefits. For example, the US provides up to 12 weeks leave, but that is unpaid. Besides, this applies only to those mothers working for employers with 50 or more employees. China mandates a 14-week maternity leave during which the female employee receives a maternity allowance, assuming she has contributed to maternity insurance, from the Social Security Bureau where she is registered. Indeed, many countries, such as Canada and the UK bear either part of the parental-benefit costs or reimburse employers. India would possibly be able to better its female workforce participation if it did the same instead of making employers shoulder the entire responsibility.

 

 

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