An economist's view: In a 'she-cession', we can't rely on 'he-covery' policy fixes
There has been much talk of the ‘she-cession’ and whether the Federal government’s policy responses are adequate to respond to changes in employment. In today’s analysis, Leonora Risse (@Leonora_Risse) of RMIT (@RMIT) and the Women and Public Policy Program at Kennedy School (@wapppHKS) provides the data analysis to explain why women are being disproportionately impacted by the economic downturn and how the government could provide more targeted responses. You can also read Dr. Risse’s very popular analysis of the COVID-19 frontline workforce’s undervalued status as well as her thoughts on making the pandemic an opportunity to re-imagine a more just economy. This article originally appeared on LinkedIn.
The COVID-19 pandemic has rippled through all corners of society. The public health crisis has now magnified into an economic crisis. But this economic recession is very different from those of the past.
This time, it's women who are shouldering the immediate economic brunt of the pandemic, due the type of jobs that women tend to hold in the paid workforce, as well as the caring roles that women tend to predominately take in the household.
And yet, the government has been rolling out policy responses that are all about kickstarting jobs in male-dominated industries.
It's essential to apply a gender lens when formulating an economic response. A "she-cession" requires a different package of policies than the "he-covery" solutions governments have relied on in the past.
This is not just a gender equity issue. It's what Australia needs for the best possible chance of a full economic recovery.
Jobs have fallen sharply, especially women's
As of May, women’s employment had dropped 7.1% compared to 5.6% for men’s employment.
With the sudden onset of social distancing regulations in March 2020, Australia's drop in employment numbers – both men's and women's – has been sharp and steep. The 1990s recession “we had to have” and the Global Financial Crisis that hit the world economy in 2008 look like a rather smooth downhill slopes in comparison.
In these previous recession downturns, it was mainly men's employment that slid downwards. But the 2020 downturn is affecting women's employment even more than men's.
Between February 2020 to May 2020, women’s employment numbers fell by 437 175, while men’s fell by 384 744, a difference of over 50 000 workers. This equates to a 7.1% loss in jobs amongst women, compared to 5.6% loss in jobs amongst men.
Why have women's jobs been so badly affected?
The contagion risks of COVID-19 mean that customers simply can't go out and buy many of the products and services from businesses like usual. Physical distancing regulations have been a necessary measure for public health and safety. But – unless businesses can innovatively adapt to deliver their products and services online or in a COVID-safe way – transactions that normally take place between buyers and sellers have ground to a halt.
Female-dominated industries - many of which depend on direct interaction - have been much harder hit than male-dominated ones.
As a result, the pandemic has sliced through jobs that revolve around personal interactions with customers. And the jobs that depend on discretionary, rather than essential, consumer spending. That's largely the accommodation, restaurants, cafes, and retail trade industries. With many of these services also catering to tourists and business travellers, the COVID-19 travel restrictions have amplified the blow.
In regular economic conditions, retail trade, accommodation and food services collectively provide 20% of women’s jobs. These customer-focused industries are the largest employers of women, following healthcare and education.
In comparison, more men's jobs come from construction, manufacturing, transport, and postal and warehousing services – industries that have been relatively less disrupted by physical distancing and travel restrictions.
You'll see in the graphs that retail trade is a large employer of both men and women. But there are gender differences in employment within this industry. More women are found in the retail of clothing, footwear, personal accessories, pharmaceuticals and cosmetics, and in department store jobs. Demand for these goods have plummeted and many of these stores have closed during the pandemic. Men are also more concentrated in hardware, building supplies and electronic goods – products that people are spending more on during the pandemic.
Jobs are being disproportionately cut in female-dominated roles.
Australia's payroll data shows the industries have taken the largest toll in jobs since the pandemic was declared in March. Accommodation and food services is the worst affected industry, shedding around 30% of jobs.
The arts and recreation sector – which includes creative and performing arts, sports and fitness, casinos and racing activities – has taken a big hit, shedding 26% of payroll jobs. This industry employs roughly even shares of men and women, providing around 2% of all jobs in the economy.
Retail trade is further down the list with a 6.3% drop in payroll jobs, which reflects the fact that one-quarter of retail trade workers are employed in supermarkets, where customers are still filling up their trolleys. Supermarkets employ a roughly even number of men and women.
Does casual employment help explain why women have experienced larger job losses? When it comes to casual work, there's not actually a big difference in rates of casualisation by gender. Around 26% of women and 22% of men in the workforce are employed on a casual basis. The gender difference comes back to industry patterns. Accommodation, food services and retail trade – industries that are large employers of women and have been badly knocked by the pandemic restrictions – happen to be highly casualised.
Unlike past recessions, part-time work has taken a big hit. This is bad news for women, who dominate the part-time workforce.
What about part-time workers? A key point of difference between this recession and previous downturns is that previous downturns mainly hit full-time workers. Part-time job numbers actually went up, as this was a way to absorb full-time workers who lost hours. But this time, it's both full-time and part-time jobs that have nose-dived – especially women's.
Given that nearly half of all working women are employed part-time – compared to only around one in five working men – this hefty fall in part-time jobs amplifies the gender dimension of this economic downturn.
Many women who work part-time do so as a way to balance to work and family responsibilities. Because part-time workers are more likely to also have caring responsibilities at home and within the community, the exit of many part-time working women from the paid workforce during this pandemic also reflects the heightened pressure that the pandemic is placing on those with caring roles.
More women are dropping out of the workforce completely
Many women are dropping out of employment completely.
The job numbers in the graphs above tell us the number of workers who still have a job. This includes workers on JobKeeper who are still attached to their employer even if they are working zero hours or fewer hours than they would like to.
But with each month that the pandemic rolls on, proportionally more women than men are dropping out of the workforce completely. Prior to the pandemic, women's labour force participation rate sat at 61.7%. Between February to May 2020, it dropped to 58.1%.
In 3 months, women’s workforce participation gains have been wound back 13 years.
Accounting for seasonal adjustments, the last time that women's labour force participation was this low was in 2007. In the space of three months, progress in women's workforce participation rate has been wound back by 13 years.
Men's labour force participation rates fell by a slightly lesser margin, with a 3.2 percentage point drop to 68.2%. But this is of obvious concern too. In the history of the ABS's labour force statistics, men's labour force participation rate has never been lower (though it is driven by a very different set of factors than the long-run determinants of women's workforce behaviour).
This fall in labour force participation rates tell us there are more people who have either given up looking for work, who no longer want to work, or who are no longer able to work for reasons which can include household and caring responsibilities.
Everyone has seen changes in time use, but women’s increases come on top of pre-existing disparities.
A survey of Australians' use of time during lockdown illustrates the disproportionate impact of care and unpaid work responsibilities on women. Among heterosexual couples in dual-income households, the average amount of time women are putting towards housework and household management each day has bumped up from 2 to 3 hours. Women are spending 5 hours a day actively caring for children, almost another 5 hours a day supervising children, and another 45 minutes a day caring for the elderly, sick or disabled.
Men are spending more time on these unpaid work and care activities too. But it's women who are, on average, doing even more.
The nose-dive in women's labour force participation rates has occurred even with the existence of the Australian Government's Early Childhood Education and Care relief package, which alleviated the the cost of childcare for families. Having announced that this temporary relief package "had done its job", the government is now set to end this support on 12 July 2020
JobKeeper payments to sustain employment relationships in the childcare sector are also set to be withdrawn from 20 July 2020, to be replaced by a lower transition payment to employers. To date, no other industries have had their eligibility for the JobKeeper scheme brought to an early end.
A combination of lower household incomes and higher effective costs of childcare makes it likely that women's labour force participation rate will plunge further downwards. If this happens, it's difficult to see how the jobs of childcare workers and early childhood educators – over 95% of whom are women – will be preserved.
What policy response do we need?
Before reaching for the “How to Recover from a Recession” handbook that it has relied on in the past, the government needs to recognise that the factors which triggered this recession are drastically different from those that caused previous downturns.
Australia's 1990s recession and 2008 GFC were largely sparked by an overzealous market and a subsequent collapse in business confidence. The stockmarket crashed, household consumption fizzled out, and male-dominated sectors such as construction and manufacturing took a blow as business plans were put on hold. Governments responded by injecting stimulus payments directly into households’ bank accounts and backing infrastructure projects like roads and highway upgrades. Government spending was also poured towards social housing, school buildings and home upgrades to keep construction jobs afloat. These were logical responses to prop up the sectors that were hardest hit at that time.
To cushion the crushing blow of this 2020 recession, the Australian Government unrolled a package of responses worth $259 billion to deliver financial support to individuals and businesses and – through the innovative introduction of the JobKeeper and JobSeeker schemes – preserve workers' attachment to the labour market.
But other components of the Australian Government's response – the HomeBuilder package which incentivises home construction and renovations and the JobMaker program which brings forward large-scale road, rail and dam infrastructure projects – simply follow the same "how to stimulate the economy" handbook of the past, focused squarely on boosting trades and construction jobs. These sectors will experience the second-round effects of the recession as income begins to dry up – but they were not the sectors that copped the initial and hardest blow.
It also just so happens that these sectors are among the most male-dominated industries of the economy. Men comprise 88% of the construction workforce.
When we're falling into a "she-cession", traditional shovel-ready fix-its are not going to restore the economy to pre-COVID levels of activity.
A responsible and smart government needs to think innovatively about how to revitalise the job prospects of those workers who have been hardest hit. Simultaneously, it has a responsibility to channel public spending towards the investment projects that will deliver the highest payoff for Australians. With the pandemic currently worsening worldwide, our government needs to prepare for the reality that the contagion risk of COVID-19 will be lingering in our world for many years to come.
How might this be achieved?
Re-calibrate: The physical infrastructure projects on the government's "to-do" list were calculated in a pre-COVID world. The slowdown in domestic mobility and migration intake doesn't spell a convincing case that society desperately needs more roads and rail, relative to other more pressing needs. We need the government to expand its cost-benefit ledger and give deeper consideration to the value of social infrastructure and other investment projects, such as providing more affordable housing, crisis centres, mental health services, educational support services, digital connectivity, advanced manufacturing, scientific research, and mitigation against natural disasters. Proper consultation with community groups and the not-for-profit sector – not just the biggest lobby groups – will offer the government a sharper tool to identify the investments that are in greatest need in our society.
Re-skilling: Not all of the jobs that have been swallowed up by the recession are going to return. Support needs to be provided to workers to re-skill and pivot towards jobs that will be of growing demand in the future. Mental health workers, community support workers, teaching and learning specialists, aged care workers, and digital information and technology specialists are likely to be among the jobs in even stronger need. But this also needs to be informed by a fresh calibration of the skills and competencies needed in a COVID-affected world.
Re-fitting: The businesses that are most affected by the pandemic need to be supported to not just hibernate, but to innovate and adapt. Instead of handouts to households for home renovations, a more productive investment would be to provide financial support to businesses and community facilities to modify their premises to become COVID-safe and financially viable to keep operating. This would prop up both the hard-hit services sector as well as the construction and trades jobs that the government's current policies are aimed at. Refitting the economy also means adapting digitally. Businesses can benefit from greater financial and technical support to reconfigure their practices to more fully reach their customers online.
Re-think the role of care: The government's financial relief package for the childcare sector was designed to keep childcare providers afloat. But winding back support the government has done little to acknowledge the role of childcare in enabling women to participate in the paid labour force, and the role of early childhood education in kickstarting the skills of our next generation. The ingredients for economic prosperity – population, participation and productivity – can be delivered by affordable, accessible and high quality childcare. Policymakers need to treat childcare, and all elements of the care economy, in the same way that it treats public expenditure on roads, rail and dams – as a productive investment in our economic infrastructure.
Re-balance decision-making teams: Many of these oversights could have been averted if a 'gender lens' has been applied in the policy formation process in the first place. The Government's Expenditure Review Committee is entirely male. The National COVID-19 Coordination Committee is comprised of two women out of committee of eight, and only one member of the committee, Jane Halton, offers expertise in health and social services. Bringing more women into the executive teams, as well as more representatives with expertise on community, health and social policy issues, would instil the diversity and breadth of perspectives needed to generate the best policy solutions.
Women can't be left out of the recovery plan
The stay-at-home orders and social distancing requirements associated with COVID-19 is pushing women back into more traditional roles, eroding their workforce participation and leading to longer-term concerns for their economic security. Photo credit: Needpix.
While serving a critical role on the frontline keeping society afloat during the shutdown, women have been squeezed out of the economy during this pandemic to an even greater extent than men. And it's a story being echoed globally. Women's higher job losses come on top of the other repercussions of the pandemic that women are disproportionately shouldering, including heavier burden of emotional labour and a heightened risk of domestic violence.
Australia's economic resilience will come from drawing on the full pool of skills and strengths of our population. Now is an opportunity for the Australian Government to write a new, updated chapter in the recession handbook, one that is tailored to pandemic conditions and reflects the composition of the economy in the 21st century.
Constituting 51% of the population, 48% of the paid workforce and 53% of COVID-19 job losses to date, women can't be left out of the recovery.
This post is part of the Women's Policy Action Tank initiative to analyse government policy using a gendered lens. View our other policy analysis pieces here.
Posted by @SusanMaury