What The Pandemic Means For The Gender Wage Gap

The gender wage gap just got worse, thanks to the COVID-19 pandemic.

Unemployment reached 14.7% in April, according to the U.S. Bureau of Labor — the highest it’s been since the Great Depression. For women of color, unemployment rates soared even higher during April, with a 16.4% unemployment rate for Black women and a 20.2% unemployment rate for Latina women, according to the National Women’s Law Center. 

Overall, women accounted for 55% of the job losses in April, a symptom of women occupying positions in many of the industries affected by the pandemic, such as hospitality, nursing and teaching. 

What’s more, a recent survey by Syndio, an HR analytics company, revealed that 14% of women who are employed have considered quitting their job to better manage family responsibilities as they bear the burden of domestic work and children shifting to online learning. 

While this reality is undoubtedly bleak, it’s raising questions that will shape the future of work, including what kind of structural support is available for working women in the midst of a crisis, and what kind of structural support needs to be available for working women in our post-pandemic world.

Erin Savage is the Senior Manager of Content at Human Interest, a company that offers low-cost, full-service 401(k) plans to small and medium-sized businesses. Before working at Human Interest, she was Board Vice President of At Home With Growing Older, a nonprofit network that brings together professionals, academics and activists to provide services to the aging population. 

With unemployment rates skyrocketing, especially for women, Savage said she thinks people will start looking for jobs differently. 

“Having a safety net would really benefit them, whether it’s access to a 401(k) or a health savings account,” Savage said. 

When it comes to how much women contribute to their 401(k) compared to men, the numbers reflect the compounding impact of the wage gap. According to data from more than 28,000 anonymous Human Interest users, men contribute 7.9% to their 401(k), while women contribute 7.5%. 

“It looks small at first, but that’s a big difference when we zoom out and think about what this means over the course of years or decades,” Savage said. 

A report recently published by the National Institute on Retirement Security does exactly that, and indicates that older women receive about 80% of the retirement income older men receive. 

According to the report, caregiving has a strong impact on retirement preparedness, and affects women disproportionately because they are much more likely to provide caregiving than men.

So what can be done to close the wage gap, and subsequently decrease the disparity between men and women’s retirement income? It’s a loaded question, but it comes back to offering women caregiving benefits and work flexibility.

“The pandemic is really pointing us to a workforce that is emphasizing these benefits,” Savage said. She added that in the future, more employers may offer caregiving benefits. 

Validating Savage’s prediction, a survey from the Northeast Business Group on Health (NEBGH) found that 28% of employers who weren’t previously offering paid caregiver leave are considering doing so in 2021/2022. 

The survey also found that caregiving and implementing flexible work arrangements were “at the top of benefit managers’ caregiving wish lists.” 

Flexibility goes hand in hand with caregiving benefits by helping women stay in the workforce, instead of sacrificing their careers to start a family. According to a recent LinkedIn poll, more than a third of working mothers who went back to work after having kids agreed that they struggled to get hired, and 61% said it was challenging to re-enter the workforce, demonstrating just how incompatible with caregiving it is. 

Incorporating flexible work also benefits employers by saving them money, increasing employee productivity and simply showing their employees that they have empathy. 

“I think a lot of what the pandemic is doing for women or parents or other people that are balancing caring for someone in addition to work responsibilities, is calling into question what the work-life balance we want really looks like,” Savage said. 

The damage caused by the COVID-19 pandemic cannot be understated, but hopefully, when we emerge from it, employers will actively make changes to provide more structural support for women and thereby lessen the gender wage gap. We could still be headed towards a future where women are better off in the long run.