Low-paid women have been hurt most by the recession, and they risk being left behind by the recovery

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Gentlemen, if any of you are still nitpicking the validity of the “she-cession,” it’s time to stop. Avoid the gimmicky label if you like, but the data are conclusive: women have been hurt the most by this crisis, and there is reason to seriously consider the possibility that the recovery will be equally as discriminatory.

Royal Bank of Canada economists Dawn Desjardins and Carrie Freestone dug into Statistics Canada’s latest hiring data and found that almost 100,000 women have left the labour force since February, compared with only 10,000 men.

That’s a bad omen. The math suggests a disproportionate number of women are on a path to long-term unemployment, a miserable state that feeds on itself because skills atrophy, making it ever harder to find a good job. Royal Bank’s research makes clear that a fair recovery program must emphasize initiatives to help women offset a recession that has devastated the industries in which they work in far greater numbers than men.

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“We find some disturbing trends,” said Desjardins, the bank’s deputy chief economist, who has been tracking the unequal nature of the COVID-19 crisis since the beginning. “As time went on, we saw some improvement in terms of women getting back into the labour market, but then the second wave hit.”

Some more numbers from the two economists’ work: employment among women aged 25 and older who earn less than $800 per week has dropped 30 per cent, compared with 24 per cent for men; women represent 65 per cent of the job losses in accommodation and food services, the hardest-hit industry; and women represent only 14 per cent of the hiring that has occurred at professional and technology-based companies, one of only three categories that has added workers during the pandemic — and the one that tends to pay the highest wages.

What is to be done?

One possibility: more of what we’re already doing. That’s essentially Ottawa’s response so far. Finance Minister Chrystia Freeland on March 3 extended the emergency wage subsidy through June, and Bank of Canada governor Tiff Macklem made clear last week that he is committed to leaving the benchmark interest rate near zero for at least another couple of years.

Governments, companies and households are piling up debt at an astounding pace, but all that money has cushioned the blow of the recession, increasing the odds of a strong recovery, albeit by raising the risk of a credit crisis at some point down the road. Ottawa’s response to the pandemic has been so aggressive that disposable income actually rose during the recession, an outcome few expected at the outset of the lockdowns a year ago.

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To be sure, the evolution of the crisis hasn’t been universally terrible for women. Royal Bank’s tally shows the number of women older than 25 who earn more than $1,200 per week increased 14 per cent between February and January, compared with a six per cent increase for men.

That likely has something to do with the frothy housing market, another unexpected result of Ottawa’s fiscal and monetary stimulus, considering the economy contracted 5.4 per cent in 2020, the biggest collapse on record. The FIRE industry — finance, insurance and real-estate — added 62,100 women between February and January, while the number of men employed declined by 16,000.

The high-pressure economic strategy that the Bank of Canada and the Finance Department are running is creating opportunities for groups of workers that are traditionally marginalized. It’s the approach that Canada needed a decade ago after the Great Recession, when the recovery was frustratingly slow.

But it probably won’t work this time, not if one of the goals is to narrow the employment gaps between men and women. That’s because the COVID-19 crisis has accelerated the shift to a digital economy in which robots and algorithms will take over from humans in areas such as retail, food service and real estate, as well as various office jobs.

Again, those are fields that tend to be the domain of women. A jump in long-term unemployment is a risk since relatively low-skill jobs that existed a year ago aren’t ever coming back.

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“The economy at the end of 2021 is going to look different than it did at the end of 2019,” Desjardins said. “So how do we think about these people? How do we ensure the market is there for them when they come back? Is there a transition period and how do we facilitate that?”

The answer, according to Desjardins and Freestone, is a greater emphasis on training. They said the $1.5 billion that the federal government has promised the provinces to upgrade skills is a good start, but more will be needed.

Many have observed that Canadian employers have tended to assume training was something for individuals and governments to worry about. That attitude could change. The federal government could also attach a training component to employment insurance. As Freeland likes to say: whatever it takes. Atrophy has already set in for too many people, and especially women.

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