By: Lifeguard Wealth ContributorRecent data suggests that the coronavirus is more likely to be fatal for men than for women. This is evident in data collected from multiple countries; the U.S., Canada, Germany, the U.K. and others have seen a higher number of COVID-related deaths in men than women.1
However, women appear to be experiencing a disproportionate financial impact from COVID-19. Unemployment data suggests that, unlike most previous economic downturns in the U.S., the current pandemic-fueled recession has impacted more women than men, particularly women of color.
Man-Cession Vs. She-Cession
During times of financial prosperity and recovery, the unemployment rate amongst men and women has remained fairly equal. But since the 1980s, unemployment rates have trended higher amongst men during a recession.2
Sometimes referred to as “man-cessions,” these trends may be due in part to the fact that men have tended to dominate the workforce in industries historically impacted by a recession, such as construction and finance.
In fact, during the last five recessions unemployment amongst men rose by 3.1 percent, compared to 0.3 percent for women.3
But with the onset of COVID-19, we’re seeing a shift in the dynamic. The unemployment rate among women more than quadrupled from 4.4 percent in March to 16.1 percent in April 2020, while among men it rose from 4.4 percent to 13.6 percent in the same time period. While still a significant jump for both, women saw a 2.5 percent higher rate of unemployment.3
Economic Impact of COVID-19 on Women
The circumstances discussed below may offer some important insight into why women have been hit harder financially during the COVID-19 pandemic.
Women-Dominated Workforces Were Hit Hardest
Women account for the majority of the workplace in several industries hit hardest during the pandemic. For example, around 52 percent of workers in the hospitality and leisure industry are women, and 53 percent of entry-level positions in the food industry are held by women.4,5
Numerous women-dominated sectors like service, tourism and restaurants were forced to close or severely reduce operation. This put more women out of work, causing that spike we saw in unemployment claims throughout 2020.
As a reminder, women working in the U.S. earn on average 82 cents to every dollar a man earns.6 This wage gap can put women at a disadvantage when it comes to meeting their financial and savings goals. Compounding this with a sudden loss of income puts women at a serious disadvantage.
Child Care & Caregiver Needs
In the U.S., as many as 68 percent of family caregivers are women.7 As schools, daycares, nurseries, and other childcare programs shut down, parents (often mothers) are left scrambling to cover.
With an increased need for full-time child care, working mothers have adjusted their professional roles to accommodate. One study found that in 2020, about a third of working mothers were considering leaving their job, reducing hours, taking a leave of absence or otherwise scaling back their role at work, citing childcare concerns as the primary reason.8
The Long-Term Effects on Women
Women and men who have lost their jobs due to the pandemic have relied on short-term government assistance like state unemployment benefits, Pandemic Unemployment Assistance programs and the Paycheck Protection Program. While these can help unemployed individuals make ends meet for now, they are not meant to be long-term sources of support and cannot sustainably address the compounding financial hardships that have been caused by the pandemic.
When thinking long-term, a loss of income means many women may be hard-pressed to contribute to their retirement funds, work towards long-term savings goals, buy a home, pay for childcare or save for their children’s college tuition.
In addition, leaving the workforce for any reason can put professional women at a long-term disadvantage. Those who leave their jobs or reduce their hours may more easily miss opportunities for leadership and professional growth within their field.
How to Manage a She-Cession
You can be affected by a recession no matter your gender, age or profession. COVID-19 has had an enormous impact on millions of Americans, changing much about the way we work, spend our time and socialize.
Whatever the impact has been to you personally, it’s wise to reach out to your financial professional regarding your financial future. They can help determine whether or not to scale back your retirement contributions, develop a plan in the event you lose your job, reevaluate your investment strategy and so much more. Such a conversation can make it easier to prepare for whatever lies ahead.
The opinions expressed by myself and other featured authors are their own and may not accurately reflect those of Lifeguard Wealth. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.
© 2020, Lifeguard Wealth