A new report from the Education Policy Institute (EPI) compares the demographics, qualifications and working conditions of childcare and retail workers. The retail sector was selected because it is known to be a career alternative to childcare work.

In comparison to retail, the childcare sector has an older population with substantially more female workers. On average, childcare workers are more qualified than retail workers, but they have seen a larger fall in their real wages in recent years. Low pay is one of the main drivers causing childcare workers to leave the sector.

Low pay is an issue in both sectors, and are more childcare and retail workers as a proportion of the total workforce claiming benefits compared to the total population. However, more retail workers are studying towards a higher qualification compared to childcare workers. The report finds that real wages for childcare workers and retail workers are likely to converge by 2021.

The report calls for a significant investment and reform in the childcare sector to ensure skilled practitioners remain in the sector, and enhance the quality of childcare provision.

Key findings:

• More retail workers are studying towards a higher qualification compared to childcare workers. Approximately 23 per cent of retail workers were studying for a higher qualification in 2018 compared to 16 per cent of childcare workers. Of those studying towards a higher qualification, the majority of retail workers were studying for a degree or A-level qualification, whilst the majority of childcare workers were studying for a degree or a National Vocational Qualification.
• Based on academic and vocational qualifications, the childcare sector is more qualified than the retail sector. Around 25 per cent of childcare workers have a degree, 36 per cent have A-levels and 19 per cent have GCSEs as their highest qualification, compared to 11 per cent, 30 per cent and 34 per cent respectively for retail workers in 2018.
• Real wages for childcare workers and retail workers are likely to converge by 2021. Between 2013 and 2018 childcare workers’ real wages have fallen from £8.59 to £8.19 per hour whilst retail wages have increased from £7.34 to £7.75 per hour, leaving a wage gap of £0.44 in 2018. If the current trends in real wages continue, and in the absence of minimum wage increases, we would expect the pay gap to close by 2021. However, in a more realistic scenario, childcare wages are likely to plateau and then converge with retail workers’ wages as the national minimum wage will gradually apply upwards pressure.
• Real wages for Level 2 and Level 3 retail workers were marginally greater than Level 2 childcare workers in 2018. The average childcare worker with a Level 2 NVQ earned £0.22 less per hour than the average Level 2 qualified retail worker and £0.10 less per hour than the average Level 3 qualified retail worker.
• Low pay is one of the main drivers for childcare workers to leave the sector. Approximately one in four childcare workers state ‘pay unsatisfactory in present job’ as the main reason for leaving the sector, compared to one in six retail workers.
• There are more childcare and retail workers claiming benefits compared to the population as a whole. Proportionately, there are more than twice as many childcare workers and retail workers claiming child benefits, tax credits, and housing or council tax support compared to the whole population.