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Childcare pay falling below retail, new study finds

New research from the Education Policy Institute (EPI) has found that declining childcare pay will converge with retail pay by 2021. 

The analysis found that declining real wages could mean childcare workers will move into retail jobs – which in many cases offer higher pay while requiring lower qualifications.  The report used data from the Labour Force Survey (LFS), which collects detailed information on the UK labour market from 100,000 individuals on a quarterly basis.

The key findings of the report revealed a sharp real terms decline in in childcare pay. Since 2013, real wages in childcare have fallen from £8.59 to £8.19 per hour, whilst retail wages have increased in real terms from £7.34 to £7.75, meaning some childcare workers are already paid less than those in retail, even when they have the same qualifications. The average childcare worker with a Level 2 vocational qualification now earns £0.22 less per hour than a retail worker with a Level 2 qualification.

The report also warned that falls in pay would worsen the sector's ongoing recruitment and rentention crisis, with low pay one of the main drivers for childcare workers leaving the sector. Labour Force Survey figures revealed that around one in four of former childcare workers stated ‘unsatisfactory pay’ as the main reason for leaving the sector, compared to one in six retail workers.

What sort of sector do we want?

Neil Leitch, chief executive of the Early Years Alliance, said that, while there was widespread agreement that childcare professionals deserved higher pay, the government wasn't prepared to foot the bill. He said pay came down to funding: “Most childcare providers tell us they’re struggling to break-even, many are making a loss and I hear every week from those who have been forced to close because of underfunding. It’s no wonder that childcare professionals are underpaid if that’s the climate in the sector: there simply isn’t enough money. 

“This all boils down to the type of childcare we want to see in this country. Do we want a high quality early years sector, delivering safe care and setting up our youngest children for a lifelong love of learning? Or do we want a race to the bottom where children come second to financial sustainability? It’s clear where we will end up if things don’t change soon. 

“You can’t blame these dedicated professionals for swapping the pressure and long hours of the early years for more pay and less stress working in a supermarket. This is the fault of government and, if ministers are serious about the early years, then they need to accept the reasons behind why people are leaving the sector and start funding childcare properly.”

Good supply of qualified workers 'critical'

Commenting on the new research, Avinash Akhal, report author and researcher at the Education Policy Institute (EPI), said: “These trends ought to alarm policy-makers. With high quality childcare playing a vital role in the early years of a child’s life, it is critical that there is a good supply of well-qualified workers. Failure to resolve recruitment problems could impact the provision of childcare and early years education, heightening the chance of development gaps between disadvantaged pupils and their peers widening.”