Whether we like it or not, regardless of political affiliation, or how our lives were impacted over the course of the past 15 months; the COVID-19 pandemic flipped our world upside down. Life as a woman in 2020, and now into 2021, has been significantly impacted due to the ongoing pandemic.
A recent article in Newsweek, written by Emily Peck, provided some staggering statistics and insight into the toll the pandemic has taken on American women from both a financial and mental standpoint.
“More than 4.5 million fewer women are employed now than at the start of the pandemic, either through layoffs in the female-dominated industries hit hardest by the virus or because they were pushed out of work to care for children home from school or daycare,” Peck reported. “Collectively, women in the U.S. who left the workforce in 2020 could take a financial hit of $885 billion for two years out of work. A typical woman earning a median wage of $47,299 before the pandemic stands to lose more than a quarter of a million dollars in income over her lifetime, assuming she returns to full-time work by 2022.”
The long-term effects these losses have on women are enormous. Economic losses include, but are not limited to: the income they’ve given up during the pandemic, the future income they’ll miss out on, and the lack of compounding retirement benefits.
Peck reported that a study published by the National Bureau of Economic Research found that the pandemic is likely to cause the already problematic gender wage gap to increase by five percentage points. Further, the gap in wages between men and women likely won’t even recover to pre-pandemic levels for another 20 years.
Over the recent year and a half, four out of every 10 women in the United States has had a change to their career, which for many meant ultimately choosing between a rock and a hard place. Some women had no choice but to either stop working or cut back on their hours because of COVID.
Peck reported in Newsweek: “By last fall, four times as many women as men had left the labor force. The percentage of women working hasn’t been as low as pandemic levels since 1988. At the current rate of recovery, the National Women’s Law Center (NWLC) estimates, women will need more than two years, or 28 straight months, to recover the jobs lost since February 2020. Research shows just how costly the career timeouts that many women take to care for children typically are. Being out of work for just one year over a 15-year period translates into 39 percent lower annual earnings, according to a 2018 study from the Institute for Women’s Policy Research.”
As mentioned above, the current impacts are just the start of increasing problems. As Peck reported, reentry into the workforce and retirement are other battles altogether: “Many women might not feel the full hit of the past year until they approach retirement, and receive lower Social Security payouts: an average of $1,154 a month vs. $1,466 for men. COVID will exacerbate the situation. In a January survey, nearly three-quarters of the women surveyed by Nationwide Financial said the pandemic had negatively impacted their retirement savings. And a Capital Group study out in May found that nearly 45 percent of millennial women had stopped contributing to or withdrew funds from their employer’s retirement savings plans last year.”
As a member of Schneider Downs’ Focus on Women Committee and as a woman in the early part of her career, I am shocked and disheartened to hear these statistics. Living through this part of history will be a story to tell for a lifetime, and I can only hope that many of these long-term statistics won’t come to fruition. However, I am honored that most of my personal story will have been with the Schneider Downs team. To be a part of a team that is committed to the success of our future women leaders is a privilege I didn’t realize I had. I am so proud of the direct efforts Schneider Downs has made, and continues to make, towards our women leadership throughout the firm.
Source: Newsweek Magazine, “Pandemic Could Cost Typical American Woman Nearly $600,000 in Lifetime Income,” By Emily Peck
