Friday, 24 March 2017

Who pays?

Saw this article about maternity pay on the BBC

Statutory maternity pay for UK mothers is among the worst in Europe, according to an analysis by the TUC.

Well the fact that the TUC is behind it is a bad sign to start with.

The trade union body says only Ireland and Slovakia have worse "decently paid" entitlements.
It defines decently paid as two-thirds of a woman's salary or more than £840 a month.
This is a little unclear - the £840 a month figure is apparently 2/3 of the UK average. They don't compare with absolutes anywhere in the source or the TUC's analysis so the mention is a little misleading - not least because no other country is being measured against £840 a month.

Croatia comes top, with six months

Would you rather have 6 months of 2/3 the average Croatian pay, or the current UK system?

Average pay in Croatia is around 750 euros per month, meaning 6 months at 2/3 would be around 3,000 Euros. In the UK you get 90% of your average pay for 6 weeks then around £140 per week for the next 33 weeks. So it would be approx (6 x 25000 / 52) + (33 x 140) = ~ £7,500

Although, the UK system pays out over 9 months - if we pro-rate we get 3,000 Euros vs £5,000 for 6 months. I know which I'd prefer.

Don't get me wrong - I get that this is an issue, but we need to consider the costs of increasing maternity pay. Do we really need more kids being born? If so, encourage it. If not, don't. As far as I know, no-one has done any analysis of whether we want to increase or decrease the birth rate, and without that it's hard to know which way we should incentivise behaviour.

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