Women’s Pay More Impacted Than Men’s by COVID-19

This year, due to the coronavirus pandemic, Equal Pay Day — the day each year that marks the extra time women have to work to earn the same amount of money as men do in a year — came and went largely unnoticed on March 31.

However, in observance of this important date, Payscale updated its Gender Pay Gap Report for 2020, outlining the most current degree to which women are held back from earning as much as men.

“There remains a disparity in how men and women are paid, even when all compensable factors are controlled, meaning that women are still being paid less than men due to no attributable reason other than gender.”

As the report notes, “There remains a disparity in how men and women are paid, even when all compensable factors are controlled, meaning that women are still being paid less than men due to no attributable reason other than gender.”

This year, though, there’s a new section to the report, one that outlines how women are likely to take a much harder hit from the coronavirus-sparked recession than men. It brings the challenges ahead of women into a sharp focus, but there are things women (especially women entrepreneurs) can do to weather the storm.

What is the current pay gap between men and women?

The important thing to note at the beginning is that the findings do not apply to all women equally. The gender pay gap varies depending on industry and location, and it’s wider for women of color and those who hold executive-level roles.

That said, comparing the median income of women to that of men without controlling for other factors shows that today women earn $0.81 for every dollar a man makes. From the $0.74 cents to the dollar that women earned in 2015, the gap has only reduced by $0.07 in the last 5 years.

Because some might argue that this disparity isn’t so bad, let’s zoom out and have a look at lifetime earnings. According to Payscale, this difference adds up to women making $900,000 less than men across the span of a 40-year career.

How women are impacted by the COVID-19 recession

The coronavirus pandemic has temporarily (and possibly permanently) changed work life as we know it. Those who can work remotely have been relegated to working from home. Layoffs and furloughs are sweeping industries from hospitality to media. Among others, a strain has been placed on personal care and social service industries within which women make up a larger percentage of occupations than men do.

As the report notes, workers in these women-heavy occupations “are more likely to be suspended, laid off, or forced to work reduced hours. Women are also more likely to have to take time off work, or even resign their positions, in order to care for children who are no longer in school as well as other family members.”

“Women also notably comprise 9% of the nursing profession, facing significant health risks while being paid less compared to their male counterparts.”

Beyond the losses that stem from actual time away from work, women “often incur a pay penalty upon returning to work after an absence — 7% less on average for the same position,” Payscale notes.

“Women also notably comprise 9% of the nursing profession, facing significant health risks while being paid less compared to their male counterparts.”

What you can do about it

Whether you’re a female entrepreneur determined to get to the other side of the recession with your business intact or you’re a small business owner looking to be part of the solution rather than the problem, there are many things you can do to support women during this unprecedented time.

First, use this shelter-in-place time to take a look at how you pay your own employees. If you have men out-earning women in the same position, it’s probably time to consider pay adjustments when business picks back up. If men make more money at your business because they compose a higher portion of higher paid jobs, consider if there is bias in the recruiting and hiring process.

Use this shelter-in-place time to take a look at how you pay your own employees

In addition to the various forms of relief for small businesses, freelancers, and self-employed people through the CARES Act, there are a variety of funds and initiatives sprouting up to help women in particular weather the economic storm surrounding the coronavirus.

For example, the Spanx by Sara Blakely Foundation donated $5 million to establish the Red Backpack Fund to support women-owned small businesses struggling in the wake of COVID-19. The fund will be used to give 1,000 grantees $5,000 to cover both the immediate needs and long-term recovery of women-owned small businesses.

While the economic toll of this pandemic is far from over, it is giving us plenty of time to reflect on what is (and isn’t) working for businesses. It’s a time to reflect and recalibrate the way we pay men and women.