We’ve all been witnessing the same turn of events that only tighten our grip on our wallets: Gas prices continue to wobble. The Fed keeps hiking up interest rates. Layoffs have occurred en masse across numerous industries.
And fears of a looming recession only grow worse.
The problem? Not everyone is going to feel this equally. In fact, women are more likely to get the short end of the stick in the event of a recession — all thanks to the ongoing gender wage gap.
Here’s what you should know:
Defining an Economic Downturn
Before we dive in, let’s review what, exactly, a recession even is.
Specifically, a recession is an economic downturn where a country experiences a significant drop in economic activity. It is the opposite of growth and, according to Forbes, can last anywhere from a few weeks to a few years depending on the factors at play.
Moreover, during a recession…
- Production and employment go down
- Wages and profits decrease
- Investments decline
- And more
In extreme cases, manufacturers and retailers go out of business and unemployment rates skyrocket.
Recessions can have a long-term impact on the economy as well. During a recession, businesses often lay off workers or cut back on hours which leads to an increase in unemployment. This can lead to long-term job losses even after the economy recovers.
Factoring in the Finances of the Wage Gap
The gender wage gap is one of the main factors that has left women exposed to financial insecurity, and may especially do so leading up to and during a recession.
Despite steady progress in recent years, women still earn an average of 82 cents for every dollar earned by men as reported by the Government Accountability Office (GAO) — a disparity that can have far-reaching economic implications. This means that women tend to have less money to put aside for emergency savings and retirement planning, which can be especially problematic during an economic downturn.
In addition to this, women are more likely to take time off or reduce their hours to care for family members, leading to a further decrease in income that makes it even harder for them to weather the storm of a recession.
S.H.E. Matters — Especially During a Recession
Today, we are seeing a mixed bag of news reports in terms of whether a recession is actually on the horizon or not. Regardless, one thing remains the same: it is not out of the realm of possibility.
And, according to the Ellevest Financial Wellness Survey of 2022, approximately 30% of male respondents reported feeling prepared for a potential recession. Only 14% of female respondents, however, felt the same.
In other words, given the gender wage gap in the United States, women are less likely to be financially prepared for such an economic downturn should it arrive soon. But by closing the gender wage gap, we can help shield women from feeling the exacerbated hardships in the wake of future economic instability.
And that in and of itself is reason enough to continue fighting for workplace equality.
But what do you think? Are you a female worker who is already feeling the impacts of all the aforementioned? Or do you have a different opinion entirely? We’d love to hear from you!