In the blink of an eye, COVID-19 turned the world upside down, and with it, years of progress for women. Women have been disproportionately impacted by the pandemic in several ways, from more job loss to increased caregiving responsibilities, and added mental health strain.
It’s critical to explore the drastic and lingering pandemic effects on women to see where society is falling short and how to improve prosperity and progress for women for future generations.
Fighting for the Dollar—Women’s Journey Through the Labor Force
Women have long supplied valuable work to society – but only recently have take-home earnings reflected their contribution. In the 18th and 19th centuries, women rarely held positions outside the home, though many were directly involved in the growing or producing of goods that earned the household wages, driving local economic activity.
The ratification of the 19th amendment in 1920 (a centennial celebration this past August) flipped this trend on its head. Women’s voices became recognized in public and legal matters as well as in the workforce.
Between the 1930s and 1970s, womens’ contributions to the economy continued to soar with nearly 50% of single women and 40% of married women active in the labor force. With more opportunities for advanced education and sights set on developing their own career tracks, women began to make an even bigger economic splash. By 2000, women made up 46.5% of the workforce.
But with the rise of women dominating the workforce came many new issues, including the gender wage gap which highlighted the significant earnings difference between women and men.
When the Equal Pay Act of 1963 was passed, the wage gap was a staggering 59%. Based on the most recent Census Bureau data, on average, women make 82 cents for every dollar a man makes. The gap is even worse for women of color.
Women’s workforce contributions have directly impacted this country’s economic prosperity. Even though great progress has been made, women still experience wage gaps, are underrepresented in several disciplines, and have undue pressure and expectations to balance work and family life.
COVID-19 has only made those ongoing societal challenges harder.
A Workforce Exodus
According to the National Women’s Law Center, in the last year more than 2.3 million women left the workforce (compared to 1.8 million men)resulting in the lowest levels since 1988.
This recession is unlike others in the way it’s affected women’s jobs, mostly because their jobs may not be coming back. The NWLC also discovered that while many jobs returned in January 2021, 44.2% of the jobs lost in March 2020 – topping 22.3 million – have not returned.
Many women were furloughed or let go due to the pandemic, but school and childcare closures forced many working mothers to leave by necessity to care for their children.
Women Take on More Unpaid Labor
Even in pre-pandemic times, women were shouldering caregiving and household tasks. A study found that among parents with young children (under 6), mothers spent more time on caregiving/household labor than fathers and were also more likely to work fewer hours for pay to make time for other responsibilities. More data revealed full-time working mothers spend 50% more time each day on caregiving than full-time working fathers.
The pandemic merely accelerated this alarming trend. Research from the University of Arkansas discovered that women carried more childcare and household tasks due to COVID-19-related closures than men. 44% of women reported being the sole caregiver contrasted with 14% of men.
The pandemic has also highlighted the deep-seated expectations of women’s role in society—to do it all. While that sentiment may have hung in the background, the pandemic brought it into the harsh light of day.
Women put so much pressure on themselves to build a fulfilling and prosperous career while also taking on a majority of household and childcare responsibilities. This pressure is not an accident. When women began entering the workforce at a rapid pace, societal programs and assistance like affordable and accessible childcare did not progress with it.
The Effects of a Broken System
17% of working women (over 10 million) rely on childcare and schools, compared to 12% of working men. But there simply aren’t enough affordable options to meet this growing need.
Several childcare providers had to close their doors, and it’s estimated that 4.5 million childcare slots could be permanently lost due to COVID – affecting well over 2 million families. But the lack of physical locations isn’t the only problem afflicting this space, affordability is another.
Stunningly, most center-based childcare for infants and toddlers exceeds the federal definition of affordability, which is 7% of household income. Average center-based childcare for an infant can cost up to $1,230 per month (just slightly less than the average rent for a studio apartment) and $800 a month for a toddler.
The United States Census Bureau found that one in five working adults had to stop working because COVID-19 upended their childcare arrangements. Of those, women aged 25 to 44 were three times more likely to stop working due to childcare demands.
Childcare plays a significant role in women’s participation in the labor force, but this issue, among all the others discussed so far, disproportionately affects women of color.
Why the “Shecession” has Disproportionately Affected Women of Color
Women of color face intersecting layers of oppression prompted by the pandemic: from job loss and less access to parental leave and sick time, to navigating childcare and more.
To grasp these layers, start with employment. Many women of color are employed in service sector jobs like hospitality, food service, and retail – all industries devastated by the pandemic.
Less participation in the workforce leads to a decrease in household income, which is particularly devastating for working-class families where women are typically the primary earners.
Many women have had to navigate a significant loss of income, but pressures remain for those who are still employed.
Service sector jobs are often lower-paying with higher levels of volatility, fewer options for flexibility, and lower access to sick and parental leave. This exacerbates the pressures of childcare and makes it impossible to drop out of the workforce to supplement any lapses in accommodations.
All of these elements play a critical role in assessing the pandemic’s toll. While this is merely an overview, it begins to highlight the real nature of this inequality.
Long-term Financial Impacts for Women
Women who had to leave the workforce or reduce hours in response to the pandemic will likely experience an economic shift that far surpasses short-term wage reduction – chiefly, their retirement security.
Shouldering family household and caregiving responsibilities puts many women at a disadvantage when it comes to shoring up their retirement savings. First, women are more likely than men to rely on Social Security to fund their retirement. This dependence often turns into a double-edged sword.
Social Security benefits are based on lifetime earnings, and the Social Security Administration calculates a beneficiary’s average indexed monthly earnings for their 35 highest-earning years to determine their primary insurance amount (or their full retirement benefit).
Women who earn less money over their lifetime can expect a smaller monthly check. What if a woman doesn’t have 35 years in the labor force? The SSA inputs a “0” in the formula, further reducing the benefit.
The lack of retirement protection isn’t just illustrated by reduced Social Security benefits. The pandemic-induced recession resulted in women losing nearly 5.4 million jobs – one million more than men. Job loss comes with short-term economic turbulence but also curtails access to pensions, workplace retirement plans, and the compounding benefits accompanying it.
Historically, even full-time working women have less stashed away for retirement. Vanguard’s research found that men’s workplace account balances were nearly 50% more than women’s, reflected in part by the staggering wage gap. Imagine the severity of that gap given our current economic situation.
Women’s longevity only exacerbates this savings gap. The CDC estimates that on average women outlive men by about five years. That is five extra years of living expenses, health care, long-term care, and more. Those bills add up. It’s no wonder then that women are 80% more likely to be impoverished in retirement than men.
Saving enough money for retirement is top of mind for many people, but especially women. It’s critical to bolster women’s economic security.
Navigating the Road Ahead
The pandemic has highlighted the need for immediate and lasting change. What can be done to help solve some of these deep-seated societal problems?
Below are a few ideas that many academics, writers, researchers, activists, policymakers, and other professionals are considering:
- Adopt inclusive hiring and recruiting practices.
- Actively work to close the gender wage gap (i.e. raising the minimum wage or instituting wage transparency).
- Increase opportunities for women in high-paying fields.
- Create reliable and guaranteed parental leave policies.
- Offer more access to before and after school programs.
- Extend flexible work hours and telecommuting when possible.
- Build policies and laws that support working people.
- Design a comprehensive, affordable, and accessible childcare system.
- Produce pandemic relief benefits centered on caregiving.
Our society must start to support the advancement of all women and work in concert to help forge a gender-equal world.
Abacus is deeply committed to this work and looks forward to our part in building a society where all women thrive. For more ways you can maximize what your long-term earning and align your values with your money, reach out an advisor today.