Not entirely a “she-cession” but globally women are the key to economic recovery
Advanced economies in Europe and North America are finally emerging after a year of COVID-19 lockdowns largely due to mass vaccinations, while populations in Africa and hard-hit South Asia and Latin America grapple with both vaccine access and labor informality. In a year mired by uncertainty, the economic and societal shocks of the pandemic impacted women and men differently—across the world, women were more likely to lose jobs, cut back paid hours worked, and became the default childcare providers in households.
In much of the world, women were left with no choice. In the United States, the pandemic erased the strides women had made in labor force participation rates since the 1960s. By 2019, American women made up more of the workforce than men (approximately 50.04 percent of payrolls). [1] Today, American women’s labor force participation stands at 57.4 percent which is lower than the pre-pandemic 59.2 percent in February 2020 and the lowest level since December 1988. [2] It is true that women’s employment suffered because many works in the services sector which witnessed hard hits in retail, healthcare and hospitality, while in developing countries women face high levels of informality which lack social safety nets to buttress the financial impact of a pandemic.
Last summer, an analysis by the McKinsey Global Institute showed that women comprise 39 percent of the global labor force but represented 54 percent of total job losses due to Covid-19. Many women’s choices disappeared as the pandemic created a childcare and education crisis with disruptions to everyday life.
Reactivating the economy with women in mind in a post-COVID world
Unemployment impacts men and women differently because society expects men to work and be the breadwinners, while women even with similar education levels as partners or husbands spend more time caring for the household. Perhaps it can be said that unemployment is shaped by gender, class, and social norms. While unemployment increased for those without university degrees or the ability to work from home, women and minority populations were disproportionately impacted. Even prior to the pandemic, gender inequality put women under greater financial pressure with unstable work contracts and less access to education and technology than their male peers.
The World Economic Forum’s Global Gender Gap 2021 report points out that the pandemic has increased the timeframe it would take to close the gender parity gap from 99.5 years to 135.6 years in terms of salary, education, and political empowerment. Overall, jobs provide people with earnings but more importantly they offer an identity that contributes to happiness and self-esteem. Covid-19 has left a void for women used to navigating a world of work instead of childcare.
The story of this pandemic is that women left the workforce independent of their education level or jobs held –at least in the United States, it appears this decision was based on whether children returned to in-person school. In Peru, children have yet to return to in-person schooling since March 2020, while other countries in the region have turned to hybrid models. According to the International Labour Organization, approximately 13 million women in Latin America and the Caribbean witnessed their jobs vanish in 2020 due to the pandemic—with a regional total of 25 million women unemployed or out of the labor force. In developing countries, many women work informal jobs in vulnerable sectors usually earning daily wages with no sick leave or the safety net of unemployment insurance.
COVID-19 exacerbates digital biases and the gender pay gap
Additionally, women have dealt with digital biases (i.e., approximately 300 million fewer women have access to smartphones in low- and middle-income countries or 20 percent less than men according to the World Bank) in a world that overnight became more reliant on connectivity for survival coupled with the ever-present gender pay gap. Even today, in the United States women with school-aged children are slowly narrowing the gender divide and returning to work.
The pandemic accelerated the uptake of digital technologies by everyone from pre-school children to grandparents, from the “mom and pop” shop to women entrepreneurs turning to e-commerce platforms to sell goods and services, as well as the many other occupations that quickly adapted to a new normal for economic survival. With this faster than expected digital transformation, the workforce and especially women will have to adjust and gain new skills to remain competitive and stay employed.
A few years ago, McKinsey estimated that anywhere from 40 million to 160 million women would have to make occupational transitions due to automation. This holds truer today because the pandemic accelerated digitization of industries and services. Globally, policymakers are having discussions on the interplay between skills demand and the role of human capital to foster digital transformations across industries and firms.
In short, countries are reemerging at a time when technology and artificial intelligence (AI) are shaping how we live, work, and play at a faster rate than pre-pandemic levels. Societies cannot afford to have women lag behind in terms of employment opportunities in both advanced and developing countries. In OECD countries, job growth pre-pandemic had been led by a demand surge for high skills benefitting women instead of men—partly because more women graduate with tertiary degrees than men.
In low- and middle-income countries, women entrepreneurs comprise a large percentage of the labor force. In Africa, women comprise about 50 percent of the continent’s self-employed workforce in the non-agricultural sector. [3] But the impacts of the pandemic stripped away sources of support from both high-skilled and low-skilled women essentially pushing many out of jobs and now preventing them from job seeking—limiting lifetime earnings and stunting a country’s economic growth. Economic recovery depends on governments ensuring that women have equal access to jobs, digital connectivity, and digital skills.
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[1] Time Magazine. Women are Now the Majority of the U.S. Workforce—But Working Women Still Face Serious Challenges. January 2020. https://time.com/5766787/women-workforce/
[2] National Women’s Law Center Factsheet. Ewing-Nelson and Tucker. April 2021. https://nwlc.org/wp-content/uploads/2021/04/March-Jobs-Day-2021-v1.pdf
[3] World Bank. Profiting from Parity: Unlocking the Potential of Women’s Business in Africa. 2019. https://openknowledge.worldbank.org/handle/10986/31421