More Women than Men are Losing Jobs in Coronavirus Shutdowns
Sat, April 17, 2021

More Women than Men are Losing Jobs in Coronavirus Shutdowns


The workforce has been hammered by the Covid-19 outbreak. / Photo by Sunshine Seeds via Shutterstock


The workforce has been hammered by the Covid-19 outbreak. US jobless claims hit 22 million as the economy sank and the Federal Reserve foresee the number to reach 47 million. Regardless of where the number may end up, economists believe that the pandemic will lead to an uneven impact on the economy. Signs show that women and minorities will be most affected.

More women than men have filed for unemployment claims in the US. In data published by the Department of Labor, the unemployment rate for women in April grew by 0.9% compared to 0.7% for men. Of the 700,000 jobs eliminated in March, 60% of these were women's. Harvard Business Review (HBR) considers this trend “unsettling.”


Women at high risk of layoffs

The same trends were highlighted in a recent poll. One in three Americans in the ABC News and Washington Post poll said that they or an immediate family member lost their job or had been laid off due to the pandemic. More than half of the respondents reported a cut in their work hours or pay. The rates of unemployment, however, were higher for women. It was 37% for women compared to 28% for men. The HBR report further notes that these unemployment patterns occur because minorities and women are overrepresented in the industries that are at high risk of layoffs, such as manufacturing, recreation, hospitality, and retail.

Since 1969, it's been men who have borne the burden of job losses during the recessions. During the 2007 to 2009 crisis, it was not that especially bad  for male workers compared to the past economic downturns, says the Federal Reserve Bank of St. Louis. The economic crisis caused by Covid-19, however, is different. Some people have called it the “Femcession” or “She-cession” as women were among the hardest hit.   



In following 327 firms that held layoffs or downsized, Tel Aviv University’s professor of sociology Alexandra Kalev learned that most of these companies based their decisions on the tenure or position of the employee. This decision, though, drained the diversity in their management teams. Companies that relied most on position have experienced 9% to 22% drops in these categories: Hispanic women, white women, black men, Asian men, and Hispanic men. Those that depend on tenure saw an average drop of 14% among Asian men and 19% among white women.



Layoffs and diversity

Kalev said that of the executives she talked to for her research, most of them were not conscious of the link between layoffs and diversity. One told her that their decision to lay off certain employees was not about diversity but more about their job function. The same executive offered the same defense.  The executive said that their layoff criteria were based on “color-blind stuff.” It was not based on one’s background but on what their job title was.


The business benefits of gender diversity

Gender diversity is necessary to ensure the equal representation of women in the workplace and it creates a positive effect across the organization. Firms that don’t encourage females to join their workforce miss out on the abilities and talents of half of the population but tapping into a wider talent poll creates a huge difference to the company’s productivity.

Furthermore, having both men and women in teams means that they benefit from the different approaches and points of view since they have different life experiences. It can spark innovation and creativity and help companies’ size and spot new opportunities. It also means enhanced collaboration. Since research shows that women have stronger skills in reading non-verbal cues, they can take turns in conversation and this helps the group have combined skills and knowledge. Observing gender diversity in the workplace likewise improves staff retention.




How inclusion can help beat the next recession

This is why Kalev emphasized that laying off minorities and women disproportionately not only hurts them but slows the economic recovery as well. A recent study also pointed out that companies that stayed inclusive during the Great Recession, a period of a general decline in national economies, did better in the financial aspect during and after the economic depression.

The professor of sociology encouraged business owners to keep track of their list to avoid turning an economic downturn into a diversity recession. Going over the list will make sure that the management’s decisions do not disproportionately hurt the minorities, women, and other groups concentrated in the targeted jobs. Spread the reductions evenly. Forming an election committee to create the layoff list will help to avoid acting based on the managers’ blind spots and favoritism.

Another solution is to not think about what jobs people hold but what they can contribute to the company. Look at their performance evaluations to avoid letting go of some high performers, regardless of their race and gender. Reskilling and cross-training the workers will also help. Cutting hours and pay instead of jobs is another strategy that some retailers, including Buck Mason, Apple stores, Allbirds, Abercrombie & Fitch, IKEA, and Gap have managed to do.



Gender diversity in the workplace: statistics and findings

The Society for Human Resource Management (SHRM) shared that Fortune 500 companies with more women board members enjoy a 53% higher return on equity, 42% higher return on sales, and 66% higher return on invested capital than the companies with the fewest women board members. The stocks of twelve 500 companies with women CEOs also rose an average of 50% in 2009.

Despite the benefits of gender diversity in the workplace, only 2.5 out of 10 chief executives are women and the female workers only hold 13.5% F500 executive officer positions and 2.9% F1000 CEOs positions. The study also found that 30% of F500 firms have no female executive officers at all.


Unemployment rate of women

Meanwhile, database company Statista shares that the unemployment rate of women in the US was 5.5% in 1990 but increased to 8.6% in 2010. The unemployment rate among the female labor force decreased since then from 7.9% in 2012 to 6.1% in 2014, 4.8% in 2016, and 3.6% in 2019.

The economic impacts of Covid-19 are gripping not just the US but the world. Keeping the company’s diversity management staff is important and the result will be evident when recession ends.