A Brewing Workforce Crisis Threatens Gender Equality

7 min read • Feb 09, 2021 • Katherine O'Malley

2020—a rough year for women with the pandemic driving many out of the workforce—ended with women bearing the full brunt of December’s job losses. This sets up a potentially dangerous cycle for women’s employment, gender equality, and the US economic recovery.

2020 Wasn’t a Good Year for Women in the Workforce

The US Bureau of Labor Statistics (BLS) reported a loss of 140,000 jobs in December. Job gains in some sectors (e.g., professional and business services) offset some of the harder hit segments (e.g., leisure and hospitality) to hold overall unemployment steady at 6.7%.

1-month-change-nonfarm-payroll-bls

Source: “Payroll employment down 140,000 in December 2020,“ BLS

CNN took a deeper dive into the December job losses to highlight that women took the hit: “Women accounted for all the job losses, losing 156,000 jobs, while men gained 16,000.” 

While women began 2020 with almost the same number of jobs as men, the picture at the end of the year was less rosy. By the end of December, women held “…860,000 fewer jobs than their male peers” and had 5.4 million fewer jobs than they did at the start of the pandemic.

Women lost more jobs than men graph

Source: “The US economy lost 140,000 jobs in December. All of them were held by women,“ CNN

That’s a mind-boggling number of women who are no longer in the workforce. Given that nearly half of those 2020 job losses for women occurred in 2 predominantly female-driven sectors hit hard by the pandemic—Leisure and Hospitality and Education and Healthcare Services—it seems unlikely that many women chose to leave the workforce. And for those who did “choose” to leave the workforce, was it a choice driven by unsupportive work conditions (e.g., safety concerns, juggling remote learning, etc.)?

Graph showing employment of women on nonfarm payrolls

Source: Table B-5. Employment of women on nonfarm payrolls by industry sector, seasonally adjusted, BLS

While the distribution of the coronavirus vaccine brings the possibility for a 2021 economic rebound, job losses may continue as the post-holiday pandemic surge prompts stricter regulations and forces small business owners to pivot yet again.

Women Must Remain In the Workforce

Does it really matter if women are exiting the workforce and losing more jobs than men? Won’t the issue resolve itself once the world “opens back up” and the economy recovers? The short answer is nope—it’s not that simple. The ripple effect of women’s job losses means it won’t be a straight-line chart for women to recoup previously-achieved gender-equality gains.

Fewer women in the current workforce impact future women’s employment opportunities. There will be fewer female mentors—critical to women’s career growth since women tend to have fewer allies in the workplace and fewer opportunities to build social capital.

It also means an uptick in “broken rung” syndrome: fewer women in the workplace means fewer women are available to move into leadership roles. Before the pandemic hit, women already lagged behind men for management positions, holding only 28% of senior vice president positions and 21% of C-suite positions.

Jasmine Tucker, the director of research at the National Women’s Law Center, predicts that Black and Latinx women will be hit especially hard by the “wage gap” impact. Unemployment on top of the average gender pay gap (women typically earn only 81.1% for the same work that men perform) means women can’t afford to lose these jobs.

Unemployed and without the safety net of a rainy day fund, a woman may take the first job offered rather than pursuing alternative offers or negotiating a better starting salary—which can cause significant earning losses over a lifetime.

Business Insider outlined a scenario that shows how negotiating for both a higher starting salary and regular pay increases could net a worker an additional $1 million in lifetime earnings. Yes, that number varies based on a variety of factors—but it still shows that closing the wage gap is critical to women’s financial health.

Graph showing difference in negotiating salary

Source: “The first big career choice you make can haunt you for years—and cost you $1 million,“ Business Insider

Put all those factors together, and it’s obvious that keeping women in the workforce is critical.

How to Keep Women in the Workforce

There is no single solution to this multi-layered problem—but the voices chiming in for change have some common themes.

First, let’s make sure female-founded businesses receive the funding they need to continue to grow and adapt. Venture capitalists are predominantly male and favor funding male-founded businesses: women-only-founded companies in 2019 received less than 3% of all US VC funds.

As Forbes suggests, companies should change policies to eliminate the billionaires-only mentality of venture capitalism and move beyond Kickstarter campaigns so anyone with spare cash can invest in professionally-managed VC funds.

Second, let’s address the real reasons women are leaving the workforce. Deloitte proposes that businesses should shift their approach to employee retention. A business can’t recruit or retain female employees if they don’t understand why women left in the first place.

Women are voluntarily leaving the workforce and downgrading careers for a variety of reasons, but caregiving burdens top the list. Melinda Gates says that the US needs a national paid family and medical leave policy, as well as “…direct[ing] additional resources to long-term-care services and supports so that ill and aging adults have options besides relying on a mother or a daughter.”

Imagine if elderly relatives had options for aging in place and mothers weren’t forced to choose between raising children and a career—how much could that help the US economy? A lot, considering that McKinsey predicts that taking immediate action to address women’s job losses due to COVID-19 could add $13 trillion to the 2030 global GDP.

Advocating for working parents (not just women) and normalizing family life can also help keep or return women into the workforce. Encouraging men to use parental leave could reduce the stigma of women using that same leave. Even something as simple as having all working parents block their calendar with “out for kid’s soccer game” could reduce the subconscious bias that working fathers are more available than working mothers.

Along those same lines, remote team members must be given the same opportunities as in-office employees. Team members juggling caregiving and work may opt for remote work and then suffer the consequences if “facetime” equals more promotions, better work assignments, and favors.

We’re poised on the brink of an employment disaster as female employment declines. Steps must be taken now to avert a much larger crisis in the future.

Katherine O'Malley

Katherine O'Malley is a contributor to the Lendio blog. A technology geek at heart, she splits her time between traveling, freelance writing, database administration work, and implementing SEO on her travel blog. In her free time, she loves to research the challenges small-to-midsize tourist suppliers face and find ways that technology can help them out.