Why The COVID-19 Recession Is A Women’s Recession
By Ann D. Blakey, CFP®
The coronavirus crisis has sparked a serious recession in the U.S. economy. Since March, we have experienced volatile stock markets, shuttered businesses, skyrocketing unemployment rates, and government intervention to alleviate the devastating effects of this recession.
But what about the effects specifically on women? Unlike past recessions in which women have made major contributions to economic recovery, the pandemic has erased years of economic gains for women and is poised to leave lasting economic scars.
One reason this recession is disproportionately impacting women is because hardest-hit industries are represented predominantly by female workers, such as the restaurant and hospitality industry, childcare and education, and the beauty industry.
Due to mandatory stay-at-home orders, businesses in these industries were forced to close their doors in most states and thus have been more heavily impacted by the coronavirus crisis.
Employers had to lay off workers at record rates during the shutdown period and following when business did not return to normal. Because women fill the majority of jobs in hard-hit industries, it has been estimated that 60% of pandemic-related job losses were suffered by women.
The effects on women in these industries are further compounded by the fact that women serve in roles that earn less than men. Therefore, their jobs are not as highly valued by employers, so women lost their jobs at disproportionately higher rates than men given their majority position.
In fact, the female unemployment rate climbed to 15.5% in April, up 2.5 points from the unemployment rate for men.
In the past few decades, women have made extraordinary progress in closing the wage gap. In the past 10 years, the U.S. Bureau of Labor Statistics reports that the wage gap increased from 78.6% in 2010 to 81.6% in 2019. This recession, however, may have significant impacts on women’s ability to make progress in the coming years.
When women have to leave the workforce due to layoffs or to take up care responsibilities because their salaries are lower than their male partners’, they are losing valuable skills that they could otherwise be developing in the workplace. Gaps in employment also increase the challenge of women getting rehired once they are able to return to work.
Women also carry more of the childcare burden. As children move to online learning and are restricted from returning at school, more women are leaving the workforce to care for them. Not to mention, the wage gap means that for heterosexual dual-income families, it often makes more sense for the male partner to keep working instead of the female partner.
Although flexible work options are undoubtedly a positive opportunity for women to keep working while taking care of children, their absence in physical spaces makes it less likely that their contributions will be noticed or their voices will be heard. As men return to the office, women working remotely may lose out on opportunities for promotion and pay raises.
The effects of the recession on women are not just women’s issues. Negative impacts on women in the workforce will be felt economically by the population as a whole. One study predicts that global GDP growth may be $1 trillion lower in 2030 than if women’s unemployment rates declined at the same rate of men’s unemployment rates.
On a micro level, middle- and lower-income family finances could be permanently damaged when women are forced to leave work. Additionally, financial insecurity for single mothers will intensify, meaning more single mothers may have to apply for unemployment and welfare benefits.
The coronavirus recession is undeniably causing anxiety for women in all chapters of life. At Washington Wealth Advisors, we are committed to serving women’s unique needs in financial spaces.
If you’re looking to partner with a financial planner who will approach your needs holistically to support your financial peace of mind, connect with us at email@example.com or call 703.584.2700. You may also access Ann's calendar to set up a complimentary initial consultation. We’d welcome the opportunity to assist you with your planning.
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