The Economic “Shecession” and a Plan for Recovery
For the first time since 1948, the female unemployment rate has reached double digits, according to an analysis by the National Women’s Law Center. Since the pandemic began, 5.4 million women have lost their jobs, and 2.1 million have left the workforce entirely. More recently, the U.S. government reported that of the 140,000 jobs lost during the month of December 2020, all (yes, all) were lost by women. This sharp increase in female unemployment is what many are calling a “shecession.”
What is a shecession?
When millions of people lost their jobs in the recession of 2008, 70% were men, many in construction and manufacturing. Economist Mark Perry coined it a “mancession” to highlight the significant way in which men were impacted by the crisis.
But the current pandemic has triggered the opposite: a nationwide “shecession,” a female-driven recession fueled by unpredictable childcare, virtual/remote schooling and vanishing service-sector jobs. Female-dominated industries such as education, hospitality and healthcare have been devastated by the COVID-19 public health crisis, causing many women to wonder and worry how this recession will impact their future opportunity and equality in the workplace.
But it’s not just women who are impacted. Cordell Carter II, executive director of the Aspen Institute Socrates Program, shared his perspective on this topic: “This issue might be deemed a women’s issue, but given the percentage of women in the workforce, it’s actually an issue that impacts all of us. Regardless of gender or sector, this is a ‘we’ thing, not a ‘them’ thing.”
According to the Bureau of Labor Statistics, women account for more than half of today’s labor force, so Cordell’s assessment may be worth considering. If individuals and companies fail to recognize the shecession and respond to it accordingly, there could be lasting consequences for everyone.
What is the potential impact?
Most directly, a shecession could impact the future earnings opportunities of women who are now unable to work. Evidence from previous recessions shows that workers who lose their job due to an economic downturn experience persistent earnings losses. Finding a new job with the same responsibility, pay and career opportunity as the job that was lost is challenging. As a result, the gender pay gap may increase, jeopardizing half a century of women’s hard-fought gains in this area.
And then there are the repercussions for businesses themselves. Data shows us how having women in leadership positively impacts companies. Fortune 500 companies with the highest representation of women on boards financially outperform companies with lower representation. Compared to male-dominated teams, gender-diverse teams have higher sales, profits and average revenue. Diverse perspectives strengthen companies, and without those voices, our organizations may not thrive.
How can companies respond?
Take time to listen to employees.
In light of recent events, women are speaking out about their primary concerns: equal pay, childcare and job opportunities. In your organization, take time to listen to your female employees and discuss practical ways your company can address their concerns.
Acknowledge any unconscious bias.
Eric Kandel, a Nobel prize winning neuroscientist, estimated 80–90% of the human mind works unconsciously, meaning that the brains of even the most well-meaning, unbiased individuals are predisposed to view a situation in a particular way.
Assumptions such as the classic gender role association may seem outdated, but research shows this unconscious bias may still be at work. Unconscious bias in a leader, spouse or fellow caregiver can wreak havoc on relationships and organizational health if it goes unnoticed and unchecked.
Make flexible work options the standard.
In addition to offering remote work options, consider other creative ways to give female employees the flexibility they need. Some companies that cannot offer remote work are now offering alternatives to accommodate ever-changing needs of women with young children: compressed weeks, shorter shifts and role sharing. This shift in traditional working conditions may require leadership to rethink when important meetings are held, how often they’re held and when a phone call or email can accomplish the same goal.
Demonstrate your commitment to families.
While providing on-site childcare services is not an option for every company, you can still demonstrate your commitment to families in other tangible ways. When discussing needs with female employees, you might uncover simple steps to create more equitable resources for both male and female parents. Whether it’s offering short-term aid or reimbursement for childcare costs, improving parental leave packages or accommodating families’ fluctuating schedules, any action an employer can take to help working parents will likely increase overall workplace satisfaction and loyalty.
Create resources for future female employees.
Looking to the future, consider how your company can develop re-entry programs for women. Professional development resources can help women on temporary leave stay engaged with the company and keep skills sharp, while hands-on mentorship and training can ensure a smooth transition back into the workforce. As a long-term strategy to reduce the impact of the shecession, think about how your company can create pipelines to attract, recruit, develop and retain young girls and women to fill essential roles in your industry.
While all of this isn’t great news for women in the workplace or for companies at large, there’s much potential for your company to make shifts and changes for the better — and all team members can benefit from that.