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The “She-cession” and Older Women: The Global Impact of the COVID-19 Recession

The “She-cession” and Older Women: The Global Impact of the COVID-19 Recession Image

"Rising and extreme inequities are a global phenomenon, and they existed pre-pandemic. These social ills cascade across countries, developed and still developing. High levels of inequity helped fuel the spread of the virus, which also exacerbated ageism."

By Melissa Grober-Morrow & Ben F. Belton

The pandemic-induced recession has been dubbed a “she-cession” for its disproportionate impact on women. As we emerge from the pandemic, it is critical to consider the varied economic impacts and long-term implications on women around the world ages 50 and over who are low-income and marginalized.

Rising and extreme inequities are a global phenomenon, and they existed pre-pandemic. These social ills cascade across countries, developed and still developing. High levels of inequity helped fuel the spread of the virus, which also exacerbated ageism.

In Preventing Ageing Unequally, the OECD named rising inequalities as a global megatrend. The greatest danger of prolonged inequity is that it compounds over time. Across the life course, women typically earn less, save less, have less access to financial services and products, and are more likely to have had non-linear working lives, while also living longer than men. In old age, they have lower pensions, less access to social protections, and are more likely to fall into poverty. We are already seeing the implications across the globe.

The Caregiving Conundrum

Women left the labor force at substantially higher rates than men during the pandemic. One major factor that contributed to women exiting the workforce was unexpectedly having to adopt the role of family caregiver. With long-term care facilities hit hard, many families were reluctant to place adult family members into a facility, and instead opted to provide care themselves. Women have been taking on such responsibilities at higher rates than men, often dropping out of the workforce to care for loved ones and support their children’s virtual education. According to research from McKinsey, mothers are three times more likely to be responsible for household labor. Employment loss among women with young children—due to the childcare burden—accounts for roughly 45 percent of the increase in the employment gender gap. There will be far-reaching implications for younger women that will show up in reduced growth opportunities and retirement security, as well as increased long-term stress, which will affect women in later years.

Women of Color and Indigenous Women Experience the Largest Challenges
Prior to the coronavirus outbreak, 68 percent of Black women in the U.S. were sole or primary breadwinners for their families. Half of Black households with children are led by single women, who often juggle work, childcare, and virtual schooling. The burden of housework continues to fall most heavily on these women.

During the pandemic, more than six in ten Latinas and over half of Black women in the U.S. were in a household that lost wages. Women of color were most likely to be furloughed or laid off—154,000 Black women left the labor force in December 2020 alone—while also most likely to be deemed “essential,” risking their own and their families’ lives. Black, Latinx, and Native Americans have been dying at higher rates than White Americans.

The pandemic has been especially harmful for women in indigenous communities who already faced extreme inequality. The UN highlights that “Being born an indigenous woman or girl can be a life sentence of poverty, exclusion, and discrimination, largely rooted in historical circumstances of marginalization.”

Long-term Implications

In the U.S., a quarter of lost jobs are predicted to be eliminated due to accelerated automation and changes in business travel and related sectors. As of May 2021, the U.S. economy had nearly eight million fewer jobs than in February 2020. COVID-19 reversed workplace gains in many of the world’s wealthiest countries due to the rising childcare burden and reduced jobs in sectors that mainly employ women. Gaps in employment make it more difficult for women to be rehired, especially at lower education levels, and many women experience age discrimination. A report looking at OECD countries shows gains toward gender employment equality will not even begin to recover until 2022. And the pace of progress will need to double to make up for losses by 2030. If women’s labor force participation is permanently reduced, economic recovery will be slow globally as three key factors—household incomes, retirement savings, and consumer spending—remain suppressed.

The Impact on Women’s Economic Outlook

In the U.S., older women are likely to bear an outsized burden in the long-term. The following data points explain why:

  • Women comprised the majority of workers in the U.S. before the pandemic. In 2019, the labor force participation rate averaged 76 percent for women ages 25 to 54 and 60 percent for women 55 to 64.
  • Since February 2020, women have lost over 4.2 million net jobs in the U.S., and account for more than half of overall net job loss since the start of the crisis. All 156,000 jobs lost in December in the U.S. were jobs held by women, while men gained 16,000 jobs.
  • 2.3 million fewer women (including 606,000 Black women and 618,000 Latinas) were in the U.S. workforce in February 2021 than in February 2020, before the start of the pandemic.
  • Industries with a majority of female employees were hit first and hardest, including retail, restaurants, healthcare, caregiving, and state and local governments. Even if women in these fields managed to hold on to their jobs, many of these positions do not provide health insurance, paid sick leave, or a living wage, leaving them in a precarious financial position.
  • For older women, retirement security is a big concern. Women workers 55+ are experiencing the highest levels of unemployment (15.5 percent) and long-term unemployment, reversing a pre-pandemic trend

Globally, the picture looks similar:

  • The World Trade Organization shows that women are disproportionately impacted by pandemic-induced trade disruptions and declines in exports.
  • About 70 percent of frontline health and direct care workers are women, who often have low wages, few benefits, and high occupational injury rates.
  • Employment loss for women is at 5 percent vs 3.9 percent for men. And across all regions, women have been more economically inactive during the pandemic.
  • In Brazil, Peru, Italy, Vietnam, and the U.S., support for lost income was greater for men than women.    
  • In Japan, one million women left the workforce–stalling gains the government made in increasing their participation--while labor force participation among men remains steady.
  • In many countries, women worked largely in nonstandard labor and lost a significant portion of their income.

Potential Solutions

Those most negatively affected must have a voice in developing solutions. Older women, particularly those of color, need to have a seat at the solutions table.

The following solutions could position women for a stronger recovery:

Invest in caregiving supports and tax credits. Caregivers cannot remain in the workforce at high levels without substantial supports for both children and adult family members with care needs. Increased workplace caregiving support could add 5.2% more jobs and 5.6% in wages and salaries in 2030 than is currently projected (with no additional support).

We must also consider the costs of caregiving. According to AARP, the average family caregiver spent nearly 20 percent of their income caring for an older adult in 2016. Financial strain was higher for Black and Latinx families and women.

Expand lifelong learning and reskilling. Employers and government agencies typically direct professional development and training opportunities to younger workers, leaving out older workers who could benefit. Given increases in longevity and shifts in the future of work, employers and government agencies must invest in workers of all ages through professional development and training opportunities.  

Strengthen social protections. Social protections can help provide access to health services, income, housing, and food. For older women facing poverty or serious illness, these programs can mean life or death.

Improve worker conditions. Policymakers and the private sector should work to eliminate all barriers to women’s employment and ensure equality in employment opportunities, pay, and benefits. Wages and benefits should cover essential living expenses. For essential workers, better compensation, career pathways, and benefits would bring economic mobility and greater equity to women.

Without these changes, we will see widening gender income and wealth inequality, which will be even more pronounced for women of color and indigenous women, affecting women as they age for decades to come.

 


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