The pandemic doesn’t have to hurt women most

The impact on wages and employment is real, but there are effective ways of supporting working women through the crisis

Published : 04 Jan 2021 08:22 PM

It was one of the most widely telegraphed risks at the onset of the pandemic: Women, who seemed to suffer less from the Covid-19 disease, would probably pay a steeper economic price than men. The clues were hiding in plain sight. Women make up a larger share of workers in industries that ground to a halt, and they typically shoulder more of the unpaid labor at home. It would be a greater challenge for them to both keep their jobs and carry on working.

Although this “she-cession” has been very real, there’s reason to be hopeful. Some countries were more successful than others in keeping women employed, shedding light on the effectiveness of policies such as making childcare affordable and targeting support to hard-hit sectors. If policy makers want to hasten a Covid recovery, they’ll need to expand some of these efforts.

According to the United Nations, which has been monitoring government responses to the crisis in its Covid-19 Global Gender Response Tracker, few policies specifically targeted women. Out of the 1,300 or so social-protection and labor-market measures adopted by about 200 countries, fewer than one in five were “gender sensitive,” meaning they considered women’s economic security and responsibility for unpaid care. The consequences of this have been clear.

Look at the European Union. Notwithstanding the hundreds of billions of dollars in stimulus — equivalent to more than 10% of annual GDP in the bigger economies — employment dropped significantly in the retail, tourism and hospitality sectors, where women make up more than 60% of the workforce. Female unemployment in the bloc now stands at 8.1%, whereas for men it’s 7.2%. 

Even when women were able to keep their jobs, many were forced to cut back on their hours because of an increase in caregiving and schooling responsibilities. Analysis by the International Labour Organization, which has studied monthly wages across 28 European countries, shows that even with earnings subsidies, women on average suffered a 6.9% decline in wages as a result of working fewer hours, compared with a 4.7% decline in men’s wages between the first and second quarters.

The gaps were widest in some of Europe’s leading economies. In Germany, the 8.6% decline in women’s wages in the first half of this year was almost twice that for men. In the U.K., women saw earnings decline by 12.9%, nearly double the drop for men. 

Perhaps most concerning is the rate at which women have been dropping out of the labor force altogether. Several advanced economies — including the U.S., Canada and Japan — have seen the gap widen between active men and women in the labor force. One survey in Europe found that 4% of women who lost their jobs during the pandemic stopped looking for work, compared with just 1% of men. Previous crises have shown that once someone steps out of the job market, it can take years before they get back in.

The silver lining to all this is that some governments did step up, directing support to childcare and female-dominated sectors and helping women maintain paid work.

In the U.K., childcare centers were exempted from paying property taxes through 2021, and the government granted childcare tax credits to families. Measures such as these, which prevented centers from closing and ensured families could afford care, helped women keep their jobs, according to a study by the Peterson Institute for International Economics. Given the high price of childcare for preschool children, offering subsidies was particularly useful as the pandemic hit incomes.

U.K. retail, hospitality and leisure businesses were also eligible for cash grants of as much as 25,000 pounds ($34,000) in the spring, which helped companies retain staff. Financial support has since been extended to help businesses weather recent lockdowns.

In Australia, where 16 of the 36 policy measures taken were gender sensitive, the government also provided free childcare to about 1 million families. (It suspended the program in July, a move that’s attracted significant criticism.) And Norway doubled paid time off for taking care of small children to 20 days. The country saw its gender gap in labor force participation decline during the pandemic. Meanwhile, Canada has vowed to present a national childcare plan in next year’s budget.

There’s still more work to be done. According to Simeon Djankov, a senior fellow at the Peterson Institute, governments need to finance a further expansion of childcare or working mothers will continue to be forced to abandon their jobs and stay at home. This would only deepen gender inequality and slow an economic recovery. It’s much harder to reenter the labor force once you’re out.

What’s more, some jobs (think high street retail) may never come back after the pandemic. So a recovery would depend on workers being able to retrain for other industries such as technology. 

Women especially will need the time and support to take this on. The livelihood of the next generation is at stake.

Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News. 

Source: Bloomberg