Hanna Venera & Holden Smith
In the wake of the COVID-19 pandemic, the world has witnessed a wide variety of adverse effects, most notably in the economic sectors. One aspect of the pandemic that has received little attention is the disproportionate effects felt by women as compared to men with regard to employment and the workforce. Not only are women losing jobs “at a steeper rate than men,” but women are also having a harder time returning to work (Chaney, 2020). In fact, Furmans (2021) explains that “women’s participation in the labor force has slipped to 57%, the lowest it has been since 1988.” Why might this be? Economists argue that women are simply falling out of the US labor force due to the uneven burden this pandemic has exacerbated by gender. Comparing pre and post-pandemic, Chaney and Weber (2020) report that in February 2020, both men and women had similar unemployment rates near 3.5%; however, in May 2020, the rates were significantly different, with men at 13.5% and women at 16.2%. As we discussed in class, these numbers are accounting only for those actively seeking employment, which shows that more women are seeking employment and participating in the workforce than historically. However, the high rate is still problematic, as it can have a lasting impact on both these women’s professional careers and bargaining power in this economy. Women of color have been even more disproportionately impacted by this pandemic, as compared to white women, with 20.2% unemployment for Hispanic women, 16.4% for black women, and 15% for white women (Chaney & Weber, 2020). As anyone who faces unemployment during a recession is at risk of not returning to the workforce, we might see adverse effects in the communities that are being impacted most heavily, in this case women, most notably women of color. Further, in their econometric analysis, Dang and Ngyen (2021) found that “Women are 24 percent more likely to permanently lose their job compared to men… and expect their labor income to fall by 50 percent more than men do” (p. 2). Women before this pandemic were already facing tremendous obstacles, including the pay gap; this pandemic has only expanded these inequalities. This pandemic and the actions of the world's government have targeted the sectors in which women are the most prevalent, turning this period into a she-cession.
Figure 1: Unemployment Data by Gender, 2000-2021
Source: St. Louis Fed, https://fred.stlouisfed.org/series/LNS14000002
This disproportionate shock by gender skewed in favor of men is actually the opposite of past recessions. In previous recessions men showed higher rates of unemployment because of their high proportion of workers in sectors that usually felt the brunt of layoffs and wage decreases, such as manufacturing and construction; this time has been different (Chaney & Weber, 2020). Stephani Albanesis, an economics professor at the University of Pittsburgh jokes that “every recession is a ‘mancession’ except this one” (Chaney & Weber, 2020). When breaking down the cause of this unique instance in history, we must examine the context of the COVID-19 pandemic and what it has impacted the most strongly. As a result of social distancing and quarantine restrictions, the service industry (including the food industry, healthcare and nursing, or childcare) has felt the brunt of these economic shocks, many of which employ a large percentage of women -- about 77% according to Chaney & Weber (2020). This means that the unemployment rates within the service sector are higher than other economic sectors, which translates to workers within that sector as more replaceable, many of which are women. As explained by Dang and Ngugen (2021), “The COVID-19 pandemic differs from a typical economic recession since it can more strongly affect sectors with high female employment shares” (p. 1). Interestingly enough, this high proportion of women in the service sector created an opportunity for “women [to hold] a higher proportion of US jobs than men for the first time in nearly a decade;” however, since the pandemic and the disproportionate job losses, this proportion has flipped, such that men compose the majority of the workforce once again (Fuhrmans, 2021). This returns to how the unemployment rate is defined. As the rate is determined only by those actively searching for jobs, this higher number has both implications of progress for women composing a larger portion of the workforce, but also losing jobs involuntarily at a higher rate.
Figure 2: Sex and Race by Economic Sector, 2020
Source: US Bureau of Labor Statistics, https://www.bls.gov/cps/cpsaat18.htm
Looking to the future, we must consider the potential long-term implications of women leaving the workforce. Chaney (2020) argues that the decline in the female workforce could lead to a rise in household income inequality. In this day and age, it is difficult to support a family with only one income, increasing the number of households with two breadwinners. With an increasing number of women losing jobs as a result of the pandemic’s effect on the service sector, families are losing a second source of income (and sometimes their only source in the case of single parent households). Chaney (2020) explains that in past recessions, “married women... took jobs to offset lost wages when their husband or male partner was laid off… [but now] are less likely to seek work because their employment prospects are... limited.” In essence, the women who have left the workforce may be taking a more permanent leave than they initially realized. Economists have also discussed this disparity in context with a term called “hysteresis,” such that “the longer women remain out to the labor market, the harder it could be to return” (Chaney, 2020). This idea stems from the notion that being removed from the workforce results in a lack of practice and employment of certain skills required, causing women to be perceived as less hireable, or if they are hired, could be seen as less valuable, causing a drop in benefits or pay. This connects to the relationship between wages and the unemployment rate, as this concept is an example of bargaining power in the workplace; when the unemployment rate is low, workers have a higher bargaining power, which raises the efficiency wage required to retain workers. In the wake of the pandemic, unemployment rates are conversely low, resulting in low bargaining power and lower wages overall, since replacing a worker is relatively inexpensive for the employer. This means that even if women are able to find jobs, they are difficult to retain, and would not have the same financial support as prior. Finally, school and child care closures have also played a large role in women returning to work (Chaney, 2020). As Titan Alon, an economics professor at the University of California San Diego explains, “if you have to take care of your children eight hours of the day when they would have been in school… how could you literally work a full-time job as well” (Chaney, 2020). Overall, this pandemic has caused a recession unlike any other historically, in that women have felt an overwhelming brunt of the economic impacts, as the service sector has been disproportionately targeted. As economists continue to study the impacts of the pandemic, this disparity should be considered, especially in context of long-term impacts on the economy and women’s place within it.
Works Cited
Chaney, S. (2020, June). Women's Job Losses From Pandemic Aren't Good for Economic Recovery; Squeeze on jobs and continued child-care responsibilities are expected to pose setbacks to female employment as businesses start to reopen. Wall Street Journal.
Chaney, S., & Weber, L. (2020, May). Coronavirus Employment Shock Hits Women Harder Than Men; Women are more likely to work in vulnerable sectors like retailing and personal care. Wall Street Journal.
Dang, H. H. & Nguyen, C. V. (2021). Gender inequality during the COVID-19 pandemic: Income, expenditure, savings, and job loss. World Development, 140(105296). https://doi.org/10.1016/j.worlddev.2020.105296
Fuhrmans, V. (2021, March). International Women's Day Caps a Year Like No Other for Working Women; How women are coping with Covid-19 and the long-term impact the pandemic could have on their careers longer term. Wall Street Journal.
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