TACOMA, Washington — The COVID-19 pandemic has affected all sectors of life, a major one being the global economy. However, it appears as though male-owned businesses are faring better than their female-owned counterparts. Across the world, women’s careers are hit harder by lockdown measures and COVID-19’s economic effect on women has been harsh.
Ebola Virus and Women
Epidemics such as the Ebola virus have shown similar trends. The quarantines issued to prevent Ebola from spreading significantly reduced women’s livelihoods and economic activities which increased food insecurity and poverty rates. These impacts were seen to have longer-lasting effects compared to male economic activities, which recovered quickly when preventative measures were lessened.
A strong influencer of these economic trends is that women comprise 70% of the informal economy, making this issue worse for women in developing countries. During the Ebola pandemic, women in Liberia were severely impacted as 85% of them are daily market traders and could not make a profit due to travel restrictions. Working in the informal economy means you depend upon social interactions and public gatherings, which is often restricted in times of health crises, as seen with the COVID-19 pandemic as well.
COVID-19’s Economic Effect on Women
The workers hardest hit have been women and lower-paid employees, according to a report by the International Labour Organization (ILO). COVID-19’s economic effect on women includes a 30% reduction in business activities. Women-owned businesses were also less likely to receive government aid, despite adapting business models to stay afloat during COVID-19.
Wages also significantly decreased or stagnated in two-thirds of countries reported by the ILO. It is likely that the remaining countries only saw growth in average wages due to the loss of low-come jobs, skewing the data. Another one of COVID-19’s economic effects on women would have been an 8.1% decrease in wages compared to 5.4% for men, if subsidies were not given.
Global Gender Inequality
The gender pay gap globally is at 16%, but in some countries, women are paid up to 35% less than men. This international inequality has been further stained by the pandemic as McKinsey & Company calculated that women’s jobs are now 1.8 times more vulnerable than men’s and have accounted for 54% of overall job losses, despite only making up 39% of the global workforce.
A potential reason for the disproportionality is that women are typically still responsible for unpaid care or work around the household, which has become more demanding with online learning and stay-at-home orders. “This, among other factors, means that women’s employment is dropping faster than average, even accounting for the fact that women and men work in different sectors.”
Women Entrepreneurs Finance Initiative (We-Fi): Solutions
The good news is businesses are acting swiftly to reduce the disproportionate economic impact of COVID-19 on women. In August 2020, the Women Entrepreneurs Finance Initiative (We-Fi) addressed the lack of women entrepreneurs due to the pandemic and allotted $49.3 million in aid to help more than 15,000 women-led businesses.
The organization had two prior rounds of allocations, totaling $300 million used to support women-owned or women-led businesses. These programs have now expanded to include 61 countries, of which 65% of funding focuses on low-income countries and those affected by conflict.
The money awarded during We-Fi’s third round of funding was awarded to the European Bank for Reconstruction and Development, Intern-American Development Bank, Islamic Development Bank and the World Bank Group, granting $7.36 million, $14.71 million, $11.25 million and $16.01 million respectively. Each of these banks has begun different initiatives to support women-led businesses and were chosen based on program criteria.
Providing Hope to Women During COVID-19
“We-Fi’s latest round of allocations addresses the needs of women entrepreneurs created by the COVID-19 crisis and encourages innovation and digital development, partnership development and the use of results-based mechanisms to facilitate greater access to financing for women entrepreneurs.” COVID-19’s economic effect on women has been severe and We-Fi is helping women globally during a vital time in history, providing hope to those who need it.
– Victoria Mangelli