Australian retailer AdoreBeauty has reported a spike in online sales since mid-March as many women turn to quick beauty fixes like skin care products and packet hair dye to help them feel better about the current economic environment.
“Sales have increased in facemasks, candles, bath and skin care products which have seen the greatest spike,” says Kate Morris Executive Director Adore Beauty.
The lipstick effect is a theory that during periods of economic crisis, consumers are more willing to spend on life’s more affordable luxuries that make them feel good.
“Interestingly it’s not lipstick that’s top of everyone’s list probably because social isolation has kept people indoors,” says Morris.
The number of Australian women at risk of financial hardship is likely to climb the longer the pandemic continues and hurts business activity.
Australia Bureau of Statistics employment data shows that women have been hit hardest by the initial impact of COVID-19 and government related shutdowns.
“While faced with an economic and social crisis, it appears that many consumers are giving themselves a ‘pick me up’ in terms of both physical and mental uplift,” says Pascale Helyar-Moray CEO of SuperRewards.
We’ve compiled a list of 10 related-money issues that women are telling us they’re facing because of the pandemic.
- Job losses climbing: Industries that have been most affected by the Federal Government’s forced shut down and containment measures have largely tended to hire more women such as hospitality, retail and events. Women represented 60% of employees in these industries as they tend to appeal to many women as they cater better for family flexibility.
- Less pay: Job losses equate to lost income and not everyone will be covered by government assistance during this time. In particular as women and younger Australians are more likely to be in casual employment, they may not qualify for the JobKeeper payment.
- Less superannuation: Women’s super balances are already 30% lower than men’s according to ABS data. So, if we look at a case study of Joanne, who is 44-49 years old and has only $62,000 (the average for women) worth of super before the recent stock market losses. She is already facing a retirement with inadequate savings given that a “comfortable retirement is said to equate to super savings of $500,000, according to the Association of Superannuation Funds of Australia (ASFA). If Joanne has withdrawn $10,000 or intends to withdraw $20,000 in total under the government’s early release scheme, a third of her super will be gone and her long term financial security is insecure.
- Fewer opportunities to immediately rebuild career: COVID-19 has hit many industries, particularly those that are female dominated, and it may take many businesses a long time before they recover and are able to start employing people again. This may make it difficult for many people to find new employment, particularly those women who need extra job flexibility around caring for children. We could see more women on government benefits as a result or accepting jobs purely to make ends meet rather than to actually build on their careers.
- Risk of unconscious bias hurting older women: Older and young women are being the most impacted by job losses and are at risk because they are more likely to work casually or part-time or in industries most affected by COVID-19. In particular we know from previous economic downturns that the older a person is, that the more challenging it is for them to get back into the paid workforce. Age or unconscious bias may be a limiting factor here.
- Unpaid workload creates barrier to paid work: The amount of unpaid work performed by Australian women is increasing as a result of COVID-19. The latest ABS Household Impacts of COVID-19 Survey shows that women were almost three times as likely as men to look after children full-time on their own. Another study currently being conducted by the University of Melbourne has also found that women living in households with children are doing double the amount of unpaid work to men. Unpaid work is considered one of the biggest barriers to increasing the number of women in the paid workforce.
- Grocery shops and household bills constantly under review: Statistically we know that women do the bulk of consumer shopping in Australia and it’s probably not a stretch to say that most do the grocery shopping too. However, planning and shopping for the “what ifs of COVID-19” have put pressure on how much we spend and what we choose to spend it on. “I think we will see a more permanent shift in our spending behaviour, particularly among women who are looking at where all the money is going and who tend to have more a focus on personal security and safety than men,” says Kate McCallum Director at Multiforte Financial Services.“We are seeing this play out right now as they are less likely to go shopping or to the hairdressers or out for entertainment until the coast is clear.”
- Childcare costs under review: Childcare might be free and available for some families because of COVID-19 but for many others it’s not easy to come by. Limitations in centres, social restrictions and tighter household budgets have forced many of us to rethink spending on babysitters and nanny services. But if income is that little bit harder to come by, this kind of spending will most certainly be revised. Higher childcare costs or the ability to access childcare can also act as a barrier to female workforce participation.
- Investment income uncertain: When it comes to dividends, the current environment is likely to be more challenging for anyone relying on this income, particularly self-funded retirees. For women in this group, some might find that their dividend income streams have declined as many companies decide not to pay out dividends at this time. Where this is happening, it’s likely to be having a financial and emotional impact and could force a rethink about the aged pension, selling down of other assets or trying where possible to find work.
- Savings depleted: It’s possible that many women may find themselves in a situation where their life savings for travel, a new car, a house deposit, or even a wedding is being depleted, especially if they are in a position where they’re living pay check to pay check. This can be a real mental and financial setback in the financial progress of any individual which may take some time to rebuild.