Labor Market Implications of the COVID-19 Recession Introduction

Labor Market Implications of the COVID-19 Recession Introduction

 

One of the lasting legacies of recessions such as the ongoing Covid-19 downturn is the massive disruption of the labour markets. The impacts of past recessions and other crises are never gender-neutral, and COVID‑19 is no exception. Studies have shown that women have been more vulnerable to the disruption caused by the Coronavirus crisis in developed as well as developing economies. The various disruptions and dynamic shifts caused by the Covid-19 recession are expected to have far-reaching implications on the global labour markets. The disproportionate effect of the Covid-19 recession on men’s and women’s unemployment is a major unique feature that differentiates the Covid-19 recession from previous recessions. Against this background, this paper critically looks into the labour market implications of the COVID-19 recession on men and women, and what these implications portend going forward.

Labor Market Implications of the COVID-19 Recession

As pointed out earlier, the impacts of the economic crisis are never gender-neutral, and the current one is no exception. Men and women have been affected differently by the pandemic. One of the key areas of the global labour market that has been severely affected by the pandemic is unemployment. Lockdowns, curfews and other movement restrictions caused companies to lay off millions of workers.

However, the implications of the Covid-19 recession have affected men and women differently. Unlike the other previous recessions that disproportionately affected men’s employment, the pandemic recession of 2020 caused a larger employment decline among women (Alon et al., 2021). These findings are supported by the World Economic Forum, which estimates that “women make up almost two-fifths of the global labour force but have suffered more than half of total job losses from the crisis. That has left them 1.8 times more vulnerable to the pandemic’s impact than men” (Wood, 2020). Women are overrepresented in most of the sectors and industries hardest hit by the pandemic, including retail, foodservice retail as well as entertainment. Female unemployment has been particularly severe in occupations and industries predominantly dominated by women. According to the International Labor Organization (2021), women who lack post-secondary education exited the labour force in larger numbers than their similarly educated men. However, the Covid-19 recession has not indiscriminately affected all female workers. While all women have been affected by the pandemic, some groups have been borne the brunt of the crisis more than others. These include working mothers, women in senior management positions as well as minority women (McKinsey &Company, 2021).

Moreover, the Covid-19 pandemic has worsened the gender-pay gap, which has always been skewed against women. Studies have shown that the ongoing Coronavirus pandemic has worsened gender inequality in the global workforce. According to the International Labor Organization (2021), the pandemic has compounded the existing gender inequalities that have traditionally put women at a major disadvantage compared to their male counterparts. According to the World Economic Forum (2021), the Coronavirus crisis has amplified the many gender inequalities that characterized virtually all countries across the globe. The crisis has exacerbated the global gender gap to the disadvantage of women, particularly those with family responsibilities.

In most of the previous recessions, men faced a greater risk of unemployment than women. This phenomenon can be explained by the overrepresentation of men in most of the largest industries and sectors of the economy, such as manufacturing, transportation utilities and constructions (Alon et al. 2021). The Covid-19 economic downturn has proved to be different from its predecessors in that it tilted the cyclical unemployment risk balance in favour of men. According to Alon et al. (2021), most women-dominated occupations are not telecommutable, and this made them more likely to be laid off during the Covid-19 recession. This has exposed women to more unemployment risk compared to the other past recessions, and this is projected to put upward pressure on the average gender wage gap over the next couple of years (Alon et al. 2021). The risk is even higher for working single mothers.

What are the implications of this going forward?

Notably, the increased gender inequality is expected to have far-reaching implications on the global economy and different demographic groups especially women. The Covid-19 pandemic is expected to prompt new policy measures to deal with the changing trajectory of global gender inequality. Alon et al. (2021) recommend government subsidies to replace 80% of pay for workers who provide childcare during economic downturns such as Covid-19. T

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