The Covid-19 pandemic is having profound impacts on the economy and society. One of the most concerning is the way in which women are experiencing more financial hardship than men. As countries, communities and businesses look to rebuild following periods of lockdown, addressing the financial vulnerability of women should be a priority to recover the ground we have lost in the pursuit of equality.
Women have long been more vulnerable to financial difficulties than men. They make up the majority of single parent households responsible for childcare, and they generally earn less. The gender pay gap, coupled with years out of work for childcare, makes it all the more difficult for women to build emergency funds and retirement savings, irrespective of their relationship status.
Since the outbreak of the pandemic, the financial vulnerability of women has come into sharper focus. In a trend called the ‘shecession’, the gender gaps in both pay and savings appear to be widening. The UN is calling on policy makers around the world to take steps to narrow the gap as they attempt to slow the spread of the virus and mitigate financial hardship. But we believe employers also have an important role to play if they are to protect women in their workforce and empower them to lead self-determined careers.
Women’s pandemic vulnerability
While men are at higher risk of experiencing health complications with Covid-19, women are more likely to see their financial wellbeing suffer. Reports show that 31 million women face job losses globally – more than twice the 13 million men at risk. This discrepancy is down to the kind of job roles women currently have. They outnumber men in the retail, hospitality and tourism sectors, which saw the first job cuts as a result of the pandemic. These sectors are also likely to be most volatile as lockdowns come and go over the coming months, and they’re expected to be the last to recover.
Gender childcare gap
Global lockdowns have also highlighted the disproportionate responsibility for childcare between men and women. Parents have had to balance home-schooling and childcare with their careers, and the obligation has largely fallen to women. In a UBS survey, 63% of women said they manage home-schooling compared to 50% of men. Similarly, 60% of women said they managed childcare compared to 48% of men.
Childcare and home-schooling has led to many women sacrificing their salaries to reduce their working hours. In Germany, for example, 27% of mothers reduced their working hours following the pandemic outbreak, compared to 16% of fathers. Those who haven’t compromised their working hours will likely struggle to find the time to consider their potential career and financial options. In addition, for the thousands of women in sectors where work cannot be done remotely, they may have to leave their jobs if they are unable to pay for or access childcare.
Widening retirement gap
A greater childcare gap is leading to a broader retirement gap, with women’s pension pots and retirement savings taking a hit as a result. Fewer working hours largely translates to fewer contributions to pension schemes.
The impacts of lower retirement savings for women should not be underestimated. Given that women statistically live longer than men, they ideally need to build more savings for their later years. In addition, 8 in 10 women are now expected to be alone in retirement, and therefore responsible for their financial wellbeing. This is the result of the upward curve of ‘grey divorce’, where couples separate later in life.
An opportunity for employers to support and empower
The UN is looking to policy makers to address the gender inequality impacts resulting from the Covid-19 pandemic. It asserts the need to: “apply an intentional gender lens […] to achieve greater equality, opportunities, and social protection.”
There is a strong argument that employers, too, have a part to play in establishing equality. International Financial Corporation (IFC) believes that employers should look to address their employees’ childcare needs. It suggests coupling remote working with flexible hours, so parents can better juggle their childcare. It also recommended providing financial support for meals for children, other supplies and equipment to help with home-schooling.
Benefits packages and employee support schemes are another vital tool that employers can use to help rebuild financial confidence and wellbeing among their female workforce. Employers can provide incentives to top-up pension contributions, making up for any lost ground due to the pandemic. They can create opportunities for women to upskill and increase their pay grade. They are also in a position to provide financial education programmes to help their female employees make choices with confidence.
Taking a long-term approach
The UN predicts the global recession will lead to a “prolonged dip in women’s incomes”, and we can already see the impacts this will have on women’s financial wellbeing and retirement savings. As companies contend with immediate pandemic-induced setbacks, they should also take a long-term view to ensure their female employees do not suffer disproportionately to their male counterparts. Addressing women’s retirement savings will be an important way for employers to support gender equality in the coming months and years.