Women have been the economy’s secret weapon, but more needs to be done to close the gap

There was much talk of a ‘pink recession’ in Australia through 2020 and again in 2021, with women being hit disproportionately harder by the economic costs associated with the pandemic. From the vantage point of 2022, some of these downside outcomes have reversed, but far from all of them.

More generally, unlike many other advanced economies, Australia has managed to shake off most of the economic damage from the pandemic – GDP is now comfortably above its pre-pandemic peak, and almost 380,000 additional jobs have been created.

With the international border closed for most of the last two years, and inflows only lifting modestly since its re-opening in November, employers have had to rely on locals to fill open positions, notwithstanding the current shortage of skilled workers.

The good news, in terms of gender equity, in the majority of cases, it has been women taking up these roles – female employment is up 245,000 since February 2020 (compared with 131,000 for men), and the unemployment rate for women has fallen to 3.8 percent, the lowest level since the 1970s.

Women’s ability to step into the labour market in such large numbers is partly a reflection of the skills and expertise they have to offer, which are currently in high demand. Although they lag behind in a variety of economic outcomes – a lower level of employment, the well-documented pay gap, significantly less superannuation accumulated over their lifetimes – the higher education and VET systems have been graduating significantly more women than men for some time. Indeed, in May 2020, for every male student working towards a non-school qualification there were 1.25 women.

The higher proportion of women achieving advanced qualifications is now starting to be reflected in the labour force. Of the women in work, 41 percent of them are in professional and managerial roles, compared to 38.7 percent of men.

And at the other end of the spectrum, a larger proportion of male employees are working as relatively unskilled labourers – 10.6 percent, against 6.5 percent of female employees. This group accounts for around 9 percent of the workforce but almost a quarter of unemployed workers who have been employed recently. In short, all other things equal, working men are more likely to be unemployed than women, and this is reflected in the headline unemployment rate. Women have hit an all-time low of 3.8 percent, while men are at 4.2 percent.

All of these positive structural features suggest that women’s employment prospects are bright – and with a tight labour market and skills shortage, many women would be able to find work easily.

But the economy is a long way from equality between the sexes. Although the participation rate for females (the proportion of women active in the labour market) is at a record high 61.1 percent, it is still well below the rate for men (70.9 percent). Or put another way, for every man in work, there are 0.9 women.

The challenge of childcare affordability, other caring responsibilities and limited flexible working arrangements are all holding women back. In a series of papers, KPMG has made a suite of policy recommendations in these areas to improve female workforce participation. There was a welcome extension of the Paid Parental Leave scheme last week but overall the Budget will make only a limited impact.

For all the encouraging developments, and the dominance of women in pandemic-resilient industries such as healthcare, the fact remains that either through redundancy or ‘choice’ (i.e. a need to take on caring responsibilities, such as home schooling), many more women than men have exited employment during lockdowns. The previous closing of the gap between male and female employment went backwards in both 2020 and 2021 before its most recent recovery.

This involuntary time out of the workforce is very disruptive to careers, and if it extends for some time can result in the erosion of skills and ultimately worker apathy and a permanent exit from the labour force; avoiding these outcomes was a primary motivation for the structure of the JobKeeper program, which kept workers and businesses connected through the worst of the downturn by formally maintaining the employee-employer relationship.

Even if this outcome is avoided, the data clearly shows that, overall, women have indeed borne the brunt of the economic cost of the pandemic, with many temporarily suffering loss of income, superannuation contributions and ongoing training and professional development.

Given the wealth of talent and skills women have gained through their education and working lives, the economy stands to gain many billions of dollars of activity if we can tackle the structural barriers to women’s participation – and continue to provide supports for those forced to stop work if there are subsequent waves and restrictions.

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