Understanding the facts behind the disproportionate economic and social impact on women and best practices for a just recovery
By: Gurleen Aujla and Allyson Soriano, Social Media Content Creators and Strategists
One year into the COVID-19 pandemic, we’ve seen our world turn upside down. The economic fallout has been felt by everyone, with women bearing the brunt of these impacts. COVID-19 has amplified the existing economic vulnerabilities that women face while giving rise to the alarming rate of unemployment. We need women’s economic security now more than ever, and our recovery plan must include an intersectional lens so that no woman is left behind.
At the height of the COVID-19 lockdown, many businesses needed to temporarily shut down and the most severely impacted industries predominantly employed women. This includes but is not limited to retail, food services, hospitality, and tourism. Women represent a disproportionate amount of COVID-19-related job losses in Canada, with an even larger representation for Asian and Black women. This is a startling contrast to previous recessions where men were more likely to be laid off than women. We are currently in what’s called a “she-cession.”
Through March and April 2020, the Royal Bank of Canada reported 1.5 million job losses for women nationally, stating that “women accounted for 45% of the decline in hours worked… but will only make up 35 percent of the recovery.” Looking at Figure 1, the trajectory of unemployment rates across sexes shows that women continually face a higher level of unemployment. A notable peak in the data is shown during January 2021, where women faced a spike of 12.79% in the unemployment rate, compared to 3.3% for men. When looking at women-owned businesses, they were forced to lay off a “disproportionately higher percentage of their workers than businesses owned by men.”
These statistics clearly paint a picture of the lopsided impact on women and the need for further investigation into the reasons behind the numbers. Unemployment data does not encompass all of the challenges associated with the she-cession.
Impact on Economic Activity
Women will be unable to recover to pre-pandemic levels until much later than their male counterparts. A study done by FreshBooks illustrates a gendered comparison of the recovery timeline for Canadian small businesses during COVID-19 in 2020, with businesses owned by men recovering two times quicker than those owned by women.
The sectors in which women-owned businesses mostly operate are newer, less well-financed, and smaller, with less than 20 employees compared to male-owned businesses. These small firms “experienced larger decreases in economic activity than large firms” relating to the hours worked by employees and real gross domestic product. Compounding this, the businesses operating in the services sector were hit even harder, which as we know from our research, most women operate and are employed in.
Nationally speaking, 45.7% of women majority-owned businesses reported that they did not have the capacity to take on any more debt.
Recommendation 1: Invest in future research dedicated to unearthing the drivers behind the unequal economic impact on women-owned businesses at the individual, organizational, and societal level.
Recommendation 2: All levels of government should develop a plan to intentionally involve women-owned businesses and entrepreneurs to participate in supply chains.
Labour Force Participation
COVID-19 has had drastic impacts on women’s participation in the labour force. A July 2020 study conducted by the Royal Bank of Canada showed that women’s participation in the labour force was at its lowest in 30 years, illustrated in Figure 2.
This threatens to unravel decades-long work devoted to lifting the participation rate of women in the workforces and hinders progressions toward gender equality at large. It is for these reasons that investments for a just recovery are made to preserve Canada’s social landscape.
Unpaid Care Responsibilities
The COVID-19 pandemic led to a complete overhaul of familial responsibilities and routines. Schools and daycares were closed, visits to extended family were no longer a viable option, and worry of elderly parents and grandparents sank in.
The closure and/or restrictions on schools and paid childcare facilities added hours upon hours of unpaid additional work, including but not limited to: taking up roles as an at-home teacher and moving elderly parents from long-term healthcare facilities.
Statistics have shown that this additional unpaid at-home work has, for the most part, affected more mothers than fathers, in terms of productivity, employment, emotional stress, and more. In fact, the She-Covery project states that “racialized Canadians were twice as likely as white Canadians to stop looking for paid work or reduce time spent on paid work as a result of increased domestic responsibilities.”
In addition, a startling Oxfam survey revealed that “71% of Canadian women [are] feeling more anxious, depressed, isolated, overworked or ill because of increased unpaid care work caused by COVID-19.”
The reality of racialized Canadians was also captured in Oxfam’s findings, where “Indigenous (49%) and Black (55%) Canadians reported greater challenges due to increased house and care work caused by COVID-19 than their white peers (34%).
Indigenous respondents were three times as likely as white respondents to say they have had to give up looking for paid work as a result of increased care responsibilities.”
Canada will not recover to its fullest potential without a robust support system for families with children and without understanding the specific and individual impacts of unpaid care responsibilities on women.
Recommendation 3: Consult with key stakeholders regarding long-term reforms to childcare procedures, including with parents, childcare facilities, and employers.
Recommendation 4: The Royal Commission on the Status of Women is to publish an updated report outlining the necessity of childcare services for the economic and social prosperity of women.
Recommendation 5: Discussions should take place surrounding tax incentives to support women entrepreneurs with children.
Inequitable Access to Funding and Other Supports
From job losses to unpaid care responsibilities, women and their businesses are undoubtedly taking hits from every direction in this economic crisis. Inequitable access to funding and other supports is the foot on their necks that keeps them from getting back up, threatening the prospect of their full economic recovery.
Emergency relief efforts have been introduced by the Government of Canada in response to the COVID-19 economic impact, but some women-owned businesses are missing out on this support. The Senior Vice-President of the Canadian Federation of Independent Business (CFIB), Corinne Polhmann, attributes women entrepreneurs’ ineligibility for the federal wage subsidy to the nature of women-owned businesses, which are often newer and smaller and therefore more likely to “fall through the cracks.” The absence of staff on payroll for a number of women entrepreneurships further substantiates this reality, as they make up “only 16 percent of small- and medium-sized enterprises (SMEs) with one or more employees, but account for 38 percent of self-employed Canadians.” Women entrepreneurs are instead more likely to be supported individually through relief efforts like the Canadian Emergency Response Benefit.
Women entrepreneurs cannot catch up to their male counterparts on the road to economic recovery with the help of individual support alone. These relief efforts implemented by the government will not yield full remedial effects on the Canadian economy if women and their businesses are left behind.
Recommendation 6: Equip women-owned businesses with supports that are universally accessible, including financial and digital literacy, relevant mentorship and advice, procurement, and child care.
Recommendation 7: The use of an intersectional lens to address the needs of women entrepreneurs who are self-employed and/or situated in remote areas to make access to support more equitable.
Additional Impacts on Women to Consider
Below is a list of considerations not addressed in this report but important nevertheless. Additional research and resources should be deployed in order to address:
- the increase in gender-based violence during COVID-19
- instances of racial discrimination and its impact on women entrepreneurs
- domestic violence
- the need for women to exit their career industries in order to take care of familial duties
- the lack of resources available for women who need re-skilling
It is clear that the experiences of women and their businesses during this pandemic are unique and multidimensional. The use of an intersectional lens is required to address women’s needs during this time, as it acknowledges the diversity and gendered nature of their experiences – that not all women are impacted equally or at the same rate.
Regarding this reality as solely a ‘women’s issue’ assigns the responsibility of economic recovery to women and women only, but we need the collective work of every level of government, every community, and every individual.
Prioritizing material efforts to mitigate the disproportionate economic and social impact on women is a demand, not a suggestion. Economic recovery for Canada will remain a distant dream until women’s economic security is guaranteed.