As an economist, my year has been dominated by trying to decipher and predict the many mixed impacts of COVID-19 on the economy.
While the economic backdrop will continue to change as virus cases rise or fall, the economic impact from COVID-19 is known: the drop in economic activity will take a long time to recover after the virus dissipates, which means higher unemployment, lower economic growth and a low inflation environment.
What is less known, harder to measure and takes a longer time to become apparent are the structural changes in the economy: business creation and destruction based on shifting consumer spending patterns, impacts on children’s education and impacts on gender and income inequality.
Gender impacts from COVID-19 will continue to be reflected in the Financy Women’s index. Usually, economic downturns tend to reduce financial gender inequality.
This is because downturns usually result in cyclical industries like manufacturing and construction (which have a much larger share of male employment) underperforming, while female dominant employment sectors like healthcare and education are non-cyclical and perform much better.
But, the COVID-19 pandemic has seen a different downturn. The industries hit the hardest haven’t been the traditional cyclical industries, but industries in the services economy in which women tend to have a larger employment share, including retail, accommodation and food services.
Since March (when the pandemic really hit Australia) more women than men have lost their jobs as a result of COVID-19, and more have completely left the workforce.
Less spoken about, because they are less measurable, are the non-economic impacts on gender equality as a result of COVID-19. Pre-COVID we know that working and non-working women took the lion’s share of housework and child-related responsibilities. COVID-19 has exacerbated these impacts.
School closures, concern about infecting grandparents or concerns about sending children to childcare have meant roaming children while parents are working from home.It appears that women have again had the larger share of child-related responsibilities during COVID-19.
There are some articles flagging academic journal submissions have dropped off more for women than men, showing productivity has been dented potentially from having these other non-work caring responsibilities.
Lower productivity growth is an important driver for longer-term wages growth. I can personally attest to these productivity challenges.
The peak of the pandemic in March-April was very tiring, trying to manage television and radio interviews with an energetic 2-year-old singing in the background.
Despite these challenges, there may be some positives for gender equality that come from 2020. The stigma of working from home has been shattered.
This will be a huge help to many women who often cite the need for more flexible working to help manage the family load. And there are also pockets of families in which men working in roles that can be done from home have taken a larger share of family responsibilities, as the females have been essential workers (in health and education) in professions where they can’t work from home.
Reducing these financial and non-financial gender imbalances as a result of COVID-19 will take time. The unemployment rate is likely to stay elevated well into 2021.
But there are still ways to lift women’s financial progress. The Financy report has a great list of government and business recommendations that could help reduce financial inequality for women starting now.
This article represents the views of the author only and does not necessarily reflect the views of AMP.
