As economies worldwide continue to suffer reverberations from the pandemic, I have spent a fair amount of time reflecting on recessions in recent history, (think early 2000s, and the Great Recession) in comparison to that which we are living through today. Like many others, I am often tempted to look for patterns because they offer a sense of control in otherwise uncontrollable situations. In my search for logic through statistics, I stumbled upon a glaring apparency: all recessions are not created equal (shocker), and in fact, they are quite gendered in who are hardest hit.
In both the 2001 recession and the Great Recession (2007-2009), men accounted for 78% of job losses. The hardest hit sectors between ’07 and ’09 were in construction and manufacturing. In a twist of fate, these very same sectors are essential businesses of operation during COVID-19. In contrast, current job losses are primarily in industries where women participate the greatest, including leisure, education, retail, and health services. The 2020 April jobs report indicates women have accounted for a whopping 55% of job losses so far. Women of color are especially impacted; unemployment has increased to 16.4% for Black women and to 20.2% for Latina women in comparison to white women, at 15.5%. Women between ages 20 and 24 are also experiencing higher unemployment rates than their male counterparts by 4%.
What can this mean for a woman’s financial future? Absence from the workforce means missed opportunities to build wealth in employer-sponsored matching retirement plans, a reduction in future social security benefits, and an overall inability to benefit from compounding growth in the market accelerated by the influx of new dollars. These components are particularly crucial for the longevity of assets in sustaining her longer life span; the World Health Organization indicates women generally live 6 to 8 years longer than their male counterparts.
For women who are still working, a study has shown only 18% say their employer reduced their workload to adjust for increased childcare demands resulting from stay-at-home orders. In comparison to men, women are spending 7.4 more hours per week on childcare and 5.3 more hours watching after sick or elderly family during the pandemic.
The full socioeconomic impacts from COVID-19 are far from realized, making it quite difficult to navigate the path ahead; where we once confidently proclaimed the economic recovery will surely be “V” shaped, we now slowly face the possibility of a “U” or even “L” shaped global recovery. While everybody can benefit from a “check-in” as we continue to feel the effects of the pandemic, I invite you to especially give the women in your life some extra love!
If you or someone you know is a woman in financial crisis in the Southern California area, there are CERTIFIED FINANCIAL PLANNER™ professionals ready to help. You can visit www.fpaocprobono.org to learn more.
“I believe in fostering a relationship with your personal finances. Once you begin to understand what deeply matters to you, the way you put your dollars to use becomes an expression of those values. When you can orient yourself to view your spending as a reflection of who you are, you’re able to exercise control over how your money moves; there is great power in that.”