Covid-19 is reversing the important gains made over the last decade for women in the workforce, according to the latest PwC Women in Work Index.
Ireland has moved up the Women in Work Index rankings but the rise in unemployment rate for women is larger than it is for men during Covid-19.
The PwC Women in Work Index from PwC warns that Covid-19 is causing a “shecession” with progress for women in work back at 2017 levels.
“While the impacts are being felt by everyone across the globe, we are seeing women exiting the workforce at a faster rate than men”
To close the gender pay gap that was widened during Covid-19 it would cost $4.8bn.
In order to undo the damage caused by Covid-19 to women in work – even by 2030, progress towards gender equality needs to be twice as fast as its historical rate, warned Emma Scott, People leader at PwC Ireland.
Second shift: Rise in unpaid work
“The setbacks that we are experiencing with Covid-19 in terms of the workforce tell a worrisome story,” said Scott. “While the impacts are being felt by everyone across the globe, we are seeing women exiting the workforce at a faster rate than men. Women carry a heavier burden than men of unpaid care and domestic work.
“This has increased during the pandemic, and it is limiting women’s time and options to contribute to the economy. In the labour market, more women work in hard-hit human contact-intensive service sectors – such as accommodation and food services, and retail trade. With social distancing and lockdowns, these sectors have seen unprecedented job losses.”
The Women in Work Index is a weighted average of five indicators that reflect female participation in the labour market and equality in the workplace: the gender pay gap, female labour force participation, the gap between male and female labour force participation, female unemployment and female full-time employment rate.
Rising unemployment among women
Between 2019 and 2020, the annual OECD unemployment rate increased by 1.7 percentage points for women (from 5.7pc in 2019 to 7.4pc in 2020).
Before COVID-19 hit, women on average spent six more hours than men on unpaid childcare every week (according to research by UN Women). During Covid-19, women have taken on an even greater share and now spend 7.7 more hours per week on unpaid childcare than men – this ‘second shift’ equates to 31.5 hours per week; almost as much an extra full-time job.
This increase in unpaid labour has already reduced women’s contribution to the economy. If this extra burden lasts, it will cause more women to leave the labour market permanently, reversing progress towards gender equality and reducing productivity in the economy.
Iceland continues to hold the top spot on the Index out of OECD countries. It is a consistent strong performer in female labour force participation (84pc), has a small participation rate gap (5pc), and even smaller female unemployment rate (3pc).
Greece saw the largest increase in terms of Index score between 2018 and 2019, driven by improvement in all labour market indicators except for the share of full-time female employees. On the contrary, Portugal experienced the largest decline in Index score between 2018 and 2019 due to a widening of its gender pay gap by 5 percentage points.
New Zealand and Slovenia both increased their rankings on the Index by one position. New Zealand saw an upward trend across all five indicators and has risen by 5 spots on the Index over the course of nine years. Government policy and a history of female representation in political institutions have helped to drive these gains. Slovenia’s improvement was driven by a fall in the participation rate gap and in female unemployment, as well as an increase in the share of full-time female employment.
Close the gap
If OECD countries increased their rates of female employment to match Sweden’s (consistently the top performer), the gain to GDP would be over US$6trn per annum. The US, with one of the highest female unemployment rates, is expected to gain the most – as much as US$1.7trn per annum.
“For employers, the impact of attrition is likely to exacerbate skills shortages, threatening business growth, and compound challenges in meeting diversity and inclusion targets”
PwC’s latest Women’s in Work Index ranks Ireland #14 which was the largest improvement in the ranking on the index, rising by four places from 18th place to 14th place. Progress was mainly driven by the narrowing of the gender pay gap and a fall in the female unemployment rate. Female Boardroom representation for Ireland is 27pc.
While Ireland climbed in the rankings of the latest Women in Work Index, it is disappointing that the latest evidence shows that the rise in unemployment rate for women is larger than it is for men during Covid-19.
For example, unemployment data released from the OECD for 2020 shows that while both the male and female unemployment rate has increased between 2019 and 2020, the percentage point increase for females is higher. The female unemployment rate increased from 4.7pc in 2019 to 6.1pc in 2020 (an increase of 1.4 percentage points), while the male unemployment rate increased from 5.2pc in 2019 to 5.9pc in 2020 (an increase of 0.7 percentage points).
The GDP impact of increasing female employment rates to Swedish levels for Ireland would be US$54 billion or 12pc. The impact on female earnings from closing the gender pay gap for Ireland would be US$4.8 billion or 10pc.
“While some women may leave the workforce temporarily due to Covid-19 with the intention of returning post-pandemic, research shows that career breaks have long-term impacts on women’s labour market prospects,” said Ger McDonagh, partner, People & Organisation at PwC Ireland.
“For employers, the impact of attrition is likely to exacerbate skills shortages, threatening business growth, and compound challenges in meeting diversity and inclusion targets. Organisations can prevent this avoidable loss by engaging all of their people, particularly women, to understand the support they need to stay in work.
“Practical steps include introducing or updating flexible working arrangements, strengthening the inclusivity of their organisational culture, and considering the D&I impacts of key decisions such as restructuring. Organisations that take a longer-term view will ensure that they have access to the best talent for a post-Covid world.”
By John Kennedy (email@example.com)
Published: 5 March 2021