Where Are All the Women?

Photo courtesy of CMI

The pandemic has certainly altered the landscape of the workforce, but no group has felt the effects more than women. Statistics show that nearly 1.8 million women have dropped out of the labor force amid the pandemic, which leaves 2.3 million fewer women working now than would have been without the disruption. As these women begin to reconsider working again, they are facing radical changes. Companies and positions have been terminated, automation poses a serious threat, and health risks are high in nearly all sectors. More importantly, however, the cost of going back to work for these women is significant. Months of being at home meant more time with children and families that they will inherently have to give up. The question now is do they want to, and can they afford to do so?  

Although women’s workforce participation has reportedly been stagnant for decades, which points to a long-term lack of societal support, the pandemic exacerbated the situation. In June of 2021, statistics show that 57.5% of women over 20 were participating in the U.S. labor force, which is less than the rate in February of 2020; this rate is the lowest it has been in over 30 years. In total, over 5 million American men and women were driven out of the labor force in April 2020. By September 2020, the gender disparity had become flagrant – with 863,000 women dropping out compared to 168,000 men. 

The impact of this disparity on the economy at large is substantial. Statistically, women make up less than 50% of the workforce but over 50% of the overall population. According to a study conducted by a University of Akron economist, every 10% increase in women’s workforce participation directly correlates to a 5% increase in wages for all workers as overall labor force productivity increases. The Federal Reserve Bank of San Francisco also concluded in a report that equalizing employment across gender would have added almost $500 billion to U.S. GDP in 2019. 

Not all women have been affected equally, however. The barriers to reentry are particularly acute for 3 groups: women who are mothers, low-income women and women of color. Women who are mothers have had to adapt their children’s new lives during the pandemic on top of their own. While schools have had to transition to remote learning, mothers have had to learn how to navigate virtual school; statistics demonstrate that 44% of women are the only one in their household providing care when schools and daycares shut down, compared to just 14% of men. According to Misty Heggeness, principal economist at the U.S. Census Bureau, mothers with school-age children are regaining jobs more slowly than those without dependent children,compared to 2019 numbers. 

Low-income women and women of color are both massively lagging behind other groups in reentering the workforce, both in terms of speed and finances. Black and Hispanic women are recovering at a slower pace than their male counterparts, and low-income women have been battling long-term unemployment pre-pandemic. Additionally, statistics show that low-income workers are least likely to have savings substantial enough to weather a long period of joblessness; and when they are working, they are, again, least likely to have access to federal supports, such as child care and paid leave. Some experts have gone as far as to say that women in low-wage jobs may drop out permanently after the pandemic. According to Brookings Institution analysis of 2018 government data, this prediction would mean that 46% of all working women, or 28 million individuals, who work in low-wage professions and make a median $10.93 per hour would be gone; this is compared to 37% of men. 

What all of this data exemplifies is that women are being met with numerous, compounding obstacles to reentry. Lower wages, health concerns, childcare responsibilities, difficulty finding jobs, and institutionalized racism are converging to make reentering the workforce almost impossible. 

This all begs the question of what are women doing instead of reentering the workforce? Well, the pandemic has been a time of change. According to surveys conducted by consulting firms Deloitte and McKinsey, as many as 1 in 4 corporate women have said they are considering downshifting their careers or leaving the workforce altogether; they additionally report that nearly 3 in 5 women planned to leave their employers in two years or less, and they cited a lack of work-life balance as their top reason for wanting out. The large demographic of wealthy, well-educated women who do not work has been found to massively affect women’s overall labor force participation. Those women, who are married to men in roughly the top fifth of all earners and thus have a household that can afford to go down in one income, have been contributing to the flattening of women’s overall labor force participation for years, according to University of Pittsburgh economist, Stefania Albanesi. The discouragement that women have felt when they come face-to-face with the reality that they might not be able to get back to the earning level they had before has also discouraged their reentry. Given that childcare was the top reason why women took a break from the workforce during the pandemic, they cannot afford to face less earnings and more childcare costs if they reenter. These “spells of nonparticipation” account for almost 30% of the gender wage gap, according to Albanesi; given this rate, if taking a break during the pandemic to stay home with children is considered a similar period of nonparticipation, that could have downward pressure on women’s future earnings.” Lastly, the pandemic has precipitated a lot of relocation. Many families moved to areas with lower costs of living – as many as 8 in 10 Redfin users reported being in a similar or better financial position after their move – which has made dropping out of the workforce even economically feasible. 

Society has made efforts to address these various issues. Congress and President Biden’s Administration have funneled federal investments into childcare. Biden’s $650 billion proposal to make large-scale investments in new policies includes: affordable child care programs, universal prekindergarten, and the country’s first national paid family and medical leave program; Republicans have criticized the cost of such a program, citing that the economy does not need more aid as it is recovering on its own. Employers have become recognizant of the strain that work puts on mothers, and thus have allowed for more flexible schedules; although controversial for the broader health of the economy, remote work is certainly one of the most beneficial changes to the work landscape for mothers. Democratic lawmakers, in general, have been calling for affordable childcare and mandated family leave; according to them, this would have the double-barreled benefit of employing more workers in the industry, where women hold a staggering 95 percent of all jobs. 

What to do now? Society needs to think about not only what will bring these women back to work, but also what will fundamentally change the work landscape so that it supports working women instead of employing them at the expense of their families. As mentioned prior, offering remote work and flexible schedules/policies would be very beneficial. According to a Morning Consult survey conducted last month, almost 1 in 5 women said they never want to return to work in person compared to 7% of men. Governments, at local, state, and federal levels, need to make childcare and paid leave important points on their agenda. While Biden’s administration has prioritized policies that will address such needs, and House Speaker Nancy Pelosi has committed to including children and working mothers in the next House package, many other policymakers do not feel the same need; many think that the overwhelming emphasis placed on the country’s lack of caring infrastructure during the pandemic is going to translate into tangible policies once the pandemic ends that are not necessarily needed. Whatever the case, the pandemic has only highlighted issues that are, at heart, long-term structural problems plaguing the workforce and society in general. Women workers deserve more than this, and if women’s labor force participation continues to decline, the rest of society will feel the effects heavily. 

Founded by attorneys Andreas Koutsoudakis and Michael Iakovou, KI Legal focuses on guiding companies and businesses throughout the entire legal spectrum as it relates to their business including day-to-day operations and compliance, litigation and transactional matters.

Connect with Andreas Koutsoudakis on LinkedIn.

Connect with Michael Iakovou on LinkedIn.

This information is the most up to date news available as of the date posted. Please be advised that any information posted on the KI Legal Blog or Social Channels is being supplied for informational purposes only and is subject to change at any time. For more information, and clarity surrounding your individual organization or current situation, contact a member of the KI Legal team, or fill out a new client intake form.