The Covid-19 threat to women’s jobs

The virus will lead to many job losses, but women are likely to feel the pain most, says Matthew Lynn.

The coronavirus is hitting the economy hard. Unemployment is already starting to rise and, once the furlough scheme comes to an end, huge numbers of people are likely to lose their jobs. What is not so widely appreciated is that women will suffer most. Why? Shops that were already teetering on the edge are collapsing into insolvency and those that remain are cutting back on staff. Overall, 58% of the people working in retail are women. Lots of workplaces in the hospitality industry too may never open their doors again, where 56% of staff are female, often working in more junior roles where jobs will be cut first. The same is true of hairdressers and beauty salons.  

A disaster for the economy

A study from the International Monetary Fund last week also found that women were less able to work from home than men. The result? They are more likely to be laid off. And there is also mounting evidence that it is harder for women, even when they do work from home, to do so effectively – because they do more childcare and house work. On top of that, a paper from the National Bureau for Economic Research this month calculated that women disproportionately work in service-sector professions such as healthcare, education or hospitality that require close physical proximity and so were likely to be hit far harder by social-distancing restrictions than men are. Over the medium-term, it predicts, there is likely to be a lot more automation in those sectors, as organisations get machines (which neither catch nor spread a virus) to do the jobs instead. Again, female staff will be the losers from that process. 

All this is bad news for women, obviously. But it is also a disaster for the economy. One of the underappreciated trends in the developed world of the last half-century has been the progress women have made in the workforce. Female participation rates have been hitting record highs in the UK and elsewhere. In the UK, the rate is now 72% (compared with 80% for men), up from 50% in 1970. It has risen by two million over the last 20 years. More women are now active in the workplace than ever before and average earnings have been rising as well, especially among younger women, who also happen to be better educated than men. It is not much of an exaggeration to argue that most of the growth in total output over the last 50 years has been created simply by women working more. But now Covid-19 risks setting that back by a generation or more – and that may be its worst long-term impact on the economy. Until a vaccine arrives and we can get back to normal, that needs fixing. 

The three changes we need  

1. More female entrepreneurs

First, we should open up small business and start-up funding so that more women can become entrepreneurs. Women are dramatically under-represented among owners of small and medium-sized firms. Only 17% of them are women. They are still far less likely to start a company, or work for a new business. But that is where many of the new jobs will be created. 

2. Flexible childcare

Next, we should make sure flexible, home-working regulations take account of childcare responsibilities. It is fine for companies to close offices and ask staff to set up a desk in the sitting room, but that can be hard with a couple of toddlers running around. If home working stretches on until Christmas and then into the new year, then childcare needs to be put in place. Making sure schools are open is a good start, but more may need to be done.

3. Open up tech jobs to women

Finally, we need to open up new sectors and professions – especially technology – to women. Women now outnumber men in mid-level professional jobs, but there are still huge parts of the economy where they have not made enough progress. That needs to change as well. 

In truth, there might be a limited amount the government can do. The barriers to women advancing in the workplace are social rather than legal and that can be slow to change. It isn’t the government’s fault that women tend to work in the sectors hardest hit by the epidemic and that can’t be easily fixed either. Even so, we need to make sure, at least as far as we can, that the epidemic doesn’t set back working women unfairly – because we will all be worse off if it does.

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