Recession or She-Cession? How COVID-19 Has Disproportionately Affected Women’s Financial Lives
There’s no denying that the coronavirus has been devastating for everyone. It has affected everything from our mental and physical health, our businesses and financial security, and even our interpersonal relationships. But it seems that women have been harder hit in one particular way: their pockets. This phenomenon is known as the the ‘she-cession’ and has become a popular buzzword in the media; but what is it really? And what are the implications?
The Great Gender Role-Reversal: Turning the Tables
In the past, periods of financial prosperity and recovery yielded relatively equal unemployment rates among men and women. That is, until the 1980s when men’s employment rates started to become disproportionately affected by recessions. This can perhaps be explained by the fact that men dominated sectors where recessions hit hardest: industries like manufacturing, construction, and finance suffered severely. During the most recent recessions, the unemployment rate among men rose by 3.1%, whereas it only rose 0.3% among women.
But with the COVID recession, the tables have turned. Where men previously felt the pinch of unemployment, women were now the ones most feeling the strain. In fact, the unemployment rate among women skyrocketed between March and April of 2020, increasing from 4.4% to a startling 16.1%. While the unemployment rates for men also radically increased, the total percentage peaked at 13.6% for men, making the rate of women’s unemployment nearly 2.5% higher.
Sectors by Gender
So why are women, in particular, feeling the strain this time around? Well, the she-cession can be attributed, at least in part, to the heavy impact on industries where women make up the majority of the workforce. Much like prior recessions where male-dominated sectors were devastated by the economic downturn, the same is now happening in female-dominated industries. However, there’s a different reason behind the economic downturn, which subsequently determines which sectors have been hardest hit.
According to S&P Global, the five industries currently most impacted by COVID are Airlines, Oil & Gas Drilling, Restaurants, Auto Parts & Equipment, and Leisure Facilities. To anyone who has watched the news in the past six months, this likely comes as no surprise. In 2020 and 2021, the country saw many non-essential businesses significantly modifying their services or shutting their doors entirely.
Unfortunately, women make up 52% of all employees in the leisure and hospitality sector, while 75% of American flight attendants are female. Sadly, these are all industries that have taken a severe hit in the last year. In fact, the unemployment rate among leisure and hospitality workers sits at 13% as of March 2021. Although, this is far lower than what it was in April of last year - a mindboggling 39.3% - it’s still more than double the unemployment rate in February 2020, which was a mere 5.7%.
Women Feeling the Brunt of the COVID-19 Pandemic
While a high unemployment rate is never good for anyone, it can be especially devastating for women who already contend with the financial challenges of the gender pay gap and fewer earning years. Working women in the US still earn, on average, only 82 cents for every dollar earned by men collectively. Women also spend more time out of the workforce taking care of their children or aging parents—years that can reduce their social security benefit and make upward mobility at work a challenge.
Recessions and unemployment affect us all—but it is also important to remember that sometimes we may be in the same storm together, but we are not always in the same boat.
If there is a woman you know in the Southern New Hampshire area who could benefit from our services, we encourage you to refer her to us. We have both the personal and financial expertise to support women managing major life transitions. The financial advisors at Northstar Financial Planning are passionate about using our expertise to serve women through the different chapters of their lives.