COVID-19 will have a lasting economic impact on Canadian women

Canadian economists worry the pandemic—and the "she-cession" it caused—is toppling women’s progress in the labour force.

In the early months of the COVID-19 pandemic, many economists were sounding alarms about Canada’s gender disparity in employment and childcare. Now, despite employment rates rebounding across Canada, women are still being left behind.

The early effects of country-wide pandemic shutdowns—of workplaces, child care centres, and schools—saw Canadians in all demographics leave their jobs and make less money than almost ever before.

By spring, however, a gender divide began to emerge in employment and labour market participation, leading some economists to label the national recession caused by the pandemic a “she-cession.”

Statistics Canada data, based on labour surveys released monthly, shows that women faced a slower return to employment and fewer hours worked than men did during those months. In May, for example, Canada’s total employment figures increased more than twice as quickly among men than it did women.

More recent StatCan data shows the gender divide in employment began to close in September and October. At the time, many municipalities loosened business restrictions, allowing more people to return to work. Schools and childcare centres also reopened—both factors which may have contributed to women returning to employment.

However, during Ontario’s province-wide shutdown caused by rising COVID-19 cases in some municipalities in late December, many schools closed once again. While some have now reopened, having to provide childcare is one of the reasons women are disproportionately affected by the pandemic.

Yet despite Canadians being able to return to work, some economists say the economic and financial effects of the pandemic are still a gendered problem.

Women’s workforce participation rates and weekly hours worked have not yet caught up to men’s, and the risk of a future school or workplace outbreaks means mothers are more likely to leave work again or forfeit work hours to take care of their children.

Further, women of colour in Canada are more likely than white women to be unemployed, a statistic that has been worsened by the effects of the pandemic.

Beginning in July 2020, StatCan asked its labour survey participants about race as well as gender. The national agency found that existing race-based wage disparities among women have been growing, especially when it comes to employment recovery rates.

As many parts of the country entered a new wave of COVID-19 restrictions in September and October, and again at the end of December, the possibility of outbreaks affecting employment became more of a reality.

The unequal burden of childcare and Canada’s heavily gender-segregated industries are two reasons women are more affected by the pandemic, according to economists and policymakers—realities that won’t disappear when businesses and schools open up.

Childcare advocates say a long-term solution includes improving the accessibility and affordability of childcare in Canada, so that women held back from returning to work can re-enter the workforce and contribute to Canada’s economic recovery.


A ‘she-cession’ in the numbers

The so-called “she-cession,” also labelled the “pink-collar recession” by some economists, is a historic outlier. The last gendered recession was the “he-cession” of 2008, when male-dominated industries—such as construction and manufacturing—were the ones more heavily impacted by job loss.

The term “he-cession” was coined in 2009 by economists Armine Yalnizyan and Trish Hennessy, to describe the economic downturn coinciding with high unemployment rates among men during that period.

In 2020 and 2021, three of the top five industries impacted by the recession are female-dominated: accommodation and food services, retail trade, and health and social assistance, according to StatCan data.

From March through to June 2020, the participation rate of women dipped lower than it had been in three decades, according to Carrie Freestone, an RBC economist and co-author of the report titled “Pandemic threatens decades of women’s labour force gains.”

The participation rate includes both employed and unemployed people who are looking for work, while the unemployment rate counts those who are unemployed and either seeking work or not.

Freestone told The Pigeon the initial gender difference in employment during the early pandemic months has since dissipated, but the numbers show participation is still a problem.

“We’re seeing that there’s not really a huge difference in employment between men and women, so that’s a good thing. The bad thing is still that women appear to be more heavily impacted than men in terms of participation,” she said.

“That means women are still more likely to not be looking for work, whereas men are looking for work or they’re working.”

Freestone says the dip in participation is concerning because it could indicate longer-term job loss, or a loss of hope in finding employment. Fewer women looking for work could mean the recession will have lasting effects for a longer period of time, she said.

RBC’s report also found that despite women making up 51 per cent of job losses in March and April, women accounted for 45 per cent of job gains in May and June because more job creation took place in male-dominated sectors like construction.

In Ontario, some construction projects were allowed to proceed in May and June under safety restrictions, while many jobs in retail, transportation, education, and other female-dominated sectors remained closed or limited in staff.

The trend is concerning on both economic and social levels.

Freestone said RBC’s analysis of StatCan data showed that the difference in participation between men and women means Canada’s GDP is losing $100 billion a year. Additional decreases in labour market participation due to COVID-19 could set Canada back even further.

“It has taken us a very long time to reach the level of [female] participation that we’re at now,” Freestone said. “[These decreases] could jeopardize women’s outcomes significantly over the near term.”

In a Nov. 2020 update to RBC’s analysis of the early pandemic effects on women in the workforce, Freestone and Dawn Desjardins—who co-authored the original report—wrote that new numbers showed women were continuing to leave the workforce, while men were rejoining it, up to October 2020.

Between February and October 2020, women accounted for around 64 per cent of people who are not in the labour force, that is, “people who have lost their jobs, are not temporarily laid off, and are not looking for work.”


Childcare and its economic impact

Katherine Scott, a senior economist for the Canadian Centre for Policy Alternatives, agrees that these new gendered employment trends are not going to go away when COVID-19 restrictions do.

“We really are looking at rolling back decades of gains women have made on this score,” she said.

Scott said StatCan data shows that in addition to the lag in the women’s participation rate, women are still working fewer hours than men. She attributes this to a lack of access to childcare.

“[Mothers] are simply not able to put in hours or are cutting down their hours because somebody’s got to be at home [to] take care of the kids,” she said.

Scott said the possibility of school or workplace outbreaks compounds the need for childcare.

Susan Prentice, a sociology professor at the University of Manitoba and author of “Changing Child Care,” said the problem with childcare in most of Canada is the expense. She added that this contributes to many women leaving their jobs or reducing their hours to take care of their children.

“There is probably nothing more gendered than childcare,” Prentice said. “I say that as a woman who is very fond of involved dads […] Really, it’s mothers who carry the burden and who are made economically vulnerable.”


Searching for solutions

Both Scott and Prentice said Canada’s economy needs women in the workforce in order for it to recover from the pandemic.

“Canada is not coming back unless we tap and stabilize female employment,” Scott said.

Prentice said a solution to the problem in Ontario that would allow more women to return to work is creating a government-subsidized childcare program, similar to the provincially-subsidized one in Quebec.

“What happened [in Quebec], is the participation rate in the paid labour force of women shot right up [once the new child care program was introduced],” she said.

Freestone said despite the fact that more affordable and plentiful childcare would help more women return to the workforce, new childcare policies won’t be “the be-all, end-all” for the gendered aspects of the recession caused by the pandemic.

“Childcare alone won’t solve the fact that women have fallen out of the labour force,” she said. “It’s not a silver bullet.”

Last year, Claudia Dessanti, a senior policy analyst for the Ontario Chamber of Commerce, authored a report published in Exchange Magazine titled “The She-Covery Project: Confronting the Gendered Impacts of COVID-19 in Ontario.

“‘She-covery’ to us is really the idea that we need to put women’s economic recovery front and centre because we see it as a precondition for Ontario’s recovery,” Dessanti said in an interview.

Dessanti points to the ‘she-covery’ report she authored for solutions to the economic and financial impacts the pandemic has had on women in Canada.

The report’s recommendations include the government launching a provincial ‘she-covery’ campaign with targets for women’s economic recovery, improving accessibility and affordability of child care, and supporting workforce reskilling.

“I think that we’re in the middle of a big transition, and it’s tipping over into being understood, rightfully, as a public issue,” Prentice said.

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