COVID-19 has pulled Australian women four years further from economic gender equality, with the economic shock leaving more women without full-time jobs, according to new research.
Financial equality between men and women is not expected to be achieved for at least 36 years, the latest Financy Women’s Index indicated. This is up from 32 years in the March quarter, when Australia was still in the early stages of the pandemic.
“Since March, each month that has gone by with COVID-19 has added another year to the time it will take to achieve economic equality,” Bianca Hartge-Hazelman, founder and author of the Financy Women’s Index, said.
The Financy Women’s Index tracks and measures the economic progress of Australian women on a quarterly basis.
Ms Hartge-Hazelman added that pre-pandemic, the growth rate of female workforce participation had been outperforming that of men.
Nicki Hutley, partner at Deloitte Access Economics, which produced economic modelling for the index, said the findings suggested the coronavirus has slowed the financial progress of women in Australia.
“As the Financy Women’s Index shows, COVID-19 has only exacerbated the divide between men and women in paid and unpaid work,” Ms Hutley said.
“Even if we return to the path of improvement seen before the pandemic, we remain a full generation away from achieving equality.”
What has changed for women during COVID-19?
The Financy Women’s Index increased by 2.4 points, or 3.3 per cent, to 73.7 in the three months to June, but this did not mean things were looking up for women financially. Ms Hartge-Hazelman attributed this to a bigger surge in underemployed men than women, with the gender underemployment gap closing by 17.2 points in the three months to June.
“The reason for the sharp increase in male underemployment relative to female can be partly attributed to there being a greater number of men who were working full-time who are now having to work part-time as a result of the impact of the virus,” she said.
“For women, the significant decline in the participation rate may largely reflect the changes in JobSeeker assistance which dropped the requirement to look for a job. It may have also been affected by an increase in unpaid care work, which is disproportionately carried out by women.”
The gender workforce participation gap and the gender pay gap grew by 1 point and 0.8 point respectively during the pandemic period, according to the index. The average female full-time employee makes $254 a week less than the average working man.
Ms Hartge-Hazelman said it’s likely that the gender gap in unpaid work could widen further.
“The gender gap in unpaid work shows that in normal times, women in relationships are doing 60 per cent more than men. This disparity is widely considered a significant barrier to increased female work participation and therefore financial progress,” she said.
On the upside, female representation on ASX 200 boards jumped slightly.
“The one area where positive progress has occurred is in the number of women in ASX 200 board positions, which increased to 31.3 per cent in the June period, up from 30.7 per cent in March, according to data company OpenDirector.com.au,” Ms Hartge-Hazelman said.
Gender super gap may not close for another 18 years
The index showed that the gender gap in retirement savings has remained stable and had been closing pre-coronavirus. However, it is still estimated to take 18 years for women to catch up with men on their super balances.
According to AustralianSuper, Australia’s biggest super fund, the average gender super gap among its members widened to 26 per cent in June, up from 25 per cent as recent as six months prior.
“With more women suffering job losses than men in the June quarter, it’s likely to have meant less money going into superannuation,” Ms Hartge-Hazelman said.
“If this trend were to re-emerge despite signs of a relative recovery in female employment, there is a risk of the gender gap widening in super.”
The majority of super fund HESTA members who withdrew from their retirement savings due to being financially affect by the pandemic were women, many of whom were on low incomes.
Ms Hartge-Hazelman noted that it may not be until 2021 when the full impact of the pandemic on women’s financial progress can be measured.
Money tips for women
1. Take control of your own money matters
If the pandemic has taught us anything, it may well be the importance of budgeting. Take this opportunity to become more organised with your personal or household finances. Understand your debts and expenses and use your spare time to put your budget under a microscope. It’s also important not to be financially complacent. Consider getting involved in all of the financial decision-making within the household. When the time comes to choose a financial product of any kind, take the time to compare multiple options while considering your personal or your family’s needs.
2. Replenish your super
While it’s easy for many people to put your retirement savings plan on the backburner, it’s arguably more important for women to give some thought to their super, given the gender super gap. It might be worth considering making additional contributions to your nest egg, especially if you’ve taken time out of work to have a child or provide unpaid care for others. You could use free resources such as MoneySmart’s superannuation calculator to estimate how much you might need to comfortably retire. Consult a retirement planner for more specific advice.
3. Make sure you have access to an emergency fund
As COVID-19 has demonstrated for many of us, life can come with twists and turns. That’s why it’s vital to have a rainy day fund in case of unexpected events. If you’re not certain how much you might need in this emergency fund, here’s one way of approaching it. Consider how much you need to get by in one regular month and multiply that by, say, three months. This way, you may have a few months’ worth of expenses in your back pocket. Depending on your financial circumstances, it may even be safer to save more for the future.