Finance Finance News How the government is turning back the clock for women
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How the government is turning back the clock for women

Government policy is turning back the clock on women's finances.
Women have been hard hit by the coronavirus, and government policy isn't helping. Photo: Getty
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The increase in women’s workforce participation is the most significant labour market trend of the past 40 years.

However, in the COVID-19 health and economic crisis, the gender boundaries of paid work are being redrawn.

Worse still, the government is the one holding the pen.

Alison Pennington.
Australia Institute’s Alison Pennington.

Women have suffered the worst labour market impacts since the shutdowns.

Total employment fell by 7.3 per cent for women compared with 5.7 per cent for men between February and May.

About 450,000 women have lost their jobs and 350,000 left the labour market all together.

Women saw a 12 per cent decline in hours worked, compared to 9 per cent for men.

This gender inequity stems from three main channels:

This combination has created a ‘perfect storm’ for women in the workplace.

However, instead of stepping up to provide countervailing support, the federal government is only exacerbating the crisis.

This started back when JobKeeper was announced and excluded short-term casuals by design, which affects more women than men.

And then, most recently the government targeted early JobKeeper cuts to childcare workers in what is a cruel double blow.

Not only do more women work in child care, but more women benefit from access to affordable child care.

The cumulative impact of Australia’s effective gender pay gap of 32 per cent (in average weekly earnings for all workers) and inadequate parental leave supports for cash-strapped families makes their work-care decisions clear cut.

Without affordable child care, mum’s got to stay home.

Child care is crucial for women hoping to work.
Affordable child care is crucial for many women’s ability to work. Photo: Getty

There’s more bad news on the industrial relations front.

Last week the Fair Work Commission decided to freeze minimum wages for up to seven months, in the sectors with the lowest wages and most precarious jobs – which are, surprise, mostly women’s jobs.

While women have been bearing the brunt of the economic impacts of COVID19, state and federal governments have targeted stimulus spending on the most bloke-heavy industry in the economy – construction.

For every $1 million invested in construction only 0.2 direct jobs are generated for women.

Yet $1 million invested in education generates almost 11 jobs for women.

In fact, education investment creates more jobs for just women than construction creates for anybody: Man or woman.

Job-generating spending for women is best directed to the public sector.

Women make up 61 per cent of all public sector workers, with the sector supporting fuller female participation – women hold 54 per cent of full-time roles but only 35 per cent of full-time roles in the private sector.

Not only would public sector pay cuts risk driving this recession into a depression, they disproportionately hurt women’s incomes.

Even temporary wage freezes (of one or two years) compound into tens of thousands of dollars in lost wages compounding over her working life.

wages growth september 2019
Wage freezes – even short ones – can take a big toll. Photo: AAP

And austerity pain radiates far beyond income losses for affected workers, reducing consumer spending (right when the economy needs more), tax revenues and enhancing deflation risk.

When the largest employer in the economy cuts wages, it has a powerful effect for other employers.

It’s not just a hunch, this is exactly what happened after the GFC.

The unnecessary 2011-12 federal public sector wages caps cut the legs out from everyone’s wages.

But the pain induced from pay cuts doesn’t end there. Because lower-wage environments breed insecure work.

People accept lower-quality jobs or juggle multiple jobs to earn the same income. Women are much more likely to work these precarious jobs.

Prime Minister Scott Morrison has acknowledged that COVID-19’s fallout has been harshest on women.

Yet his government is pushing an agenda that will ensure there will be less jobs for women, and they’ll be worse paid.

Economic inclusion of women must be targeted in a long-term, sustained public investment plan that mops up the private sector carnage and lets us build back better.

Failing this, government is turning back the clock for all women.

Alison Pennington is the senior economist at the Australia Institute’s Centre for Future Work