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Published in Economic Development

Child care, wage trends hold back women’s workforce re-entry

BY Sunday, November 07, 2021 06:00pm

Women have been slower than men to return to the workforce over the past year and a half. They are more often held back by childcare complications from the pandemic and are likely being dissuaded from returning to frontline positions with low pay.

The W.E. Upjohn Institute for Employment Research’s New Hires Quality Index, a measure of the earning power of people taking new jobs each month, is up 0.7 percent over the past year and near its all-time high. Despite this, hiring volume fell 1.3 percent over the month of August 2021. New hires were more prominent in higher-paying jobs, which negatively affects women and people of color who disproportionately hold jobs with lower earning potential. 

“Men have pretty much gone back to where they were before the pandemic in terms of resuming jobs, compared to women,” said Carolyn Cassin, president and CEO of Michigan Women Forward. “I believe this is because we’ve had both the responsibility of being breadwinners and caregivers for our children and loved ones who had COVID, so it has disproportionately affected us.”

Over the past year and a half, men have experienced faster growth in wage index and hiring volume than women, according to the Upjohn Institute. Women were making steady progress on closing the wage gap between their male counterparts until last year. Since the COVID-19 pandemic began, men’s wage index has grown faster at 1.6 percent compared to women at 0.5 percent, according to the Upjohn Institute. The current hiring volume for women is slightly elevated compared to pre-pandemic levels, up 1.1 percent from February 2020. For men, however, the hiring volume is up 4.8 percent, and to a pre-pandemic level last reached in 2016. 

For the past year, women’s share of the wage bill — the total amount paid in wages — has steadily fallen from about 49 percent between 2017 and 2020 to 47.9 percent.

“The wage gap (between men and women) was staying the same size and then it began reversing, so we’ve been taking steps backward and women’s share is back to where it was in the early months of 2017,” said Brad Hershbein, senior economist and communications adviser at the Upjohn Institute. “Women were more affected than men (by the pandemic), which is unusual in a recession when men are usually more affected in an economic downturn.”

Child care, burnout strains women

Hershbein said the emergence of the COVID-19 Delta variant, which had a disproportionate effect on the service industry and schools, has further contributed to a significant number of women staying out of the workforce.

“We’re still in a circumstance now where if a student in school has exposure to COVID, there is a quarantine period. What does that mean for working families, if at any point your child could have to stay home for seven days?” said Christopher Burns, vice president, investment strategist and senior fixed income analyst with Greenleaf Trust. “For employers, that’s a really tricky problem to solve because there is not a lot of infrastructure to help with child care.”

An estimated 44 percent of Michigan residents live in child care deserts, which are classified as counties where the number of children up to 5 years old is at least three times the number of available licensed child care spots, according to data compiled by the Michigan League for Public Policy.

Remote working would be a major help for women tasked with child care duties and who are trying to re-enter the workforce, though professions that are dominated by women are typically in health care or other frontline positions, Burns said.

Exhaustion may be another factor in slowing women’s return to the workforce, said Kelli Smith, chief operating officer for Grand Rapids Opportunities for Women (GROW), a Community Development Financial Institution and microlender.

“I absolutely see the burnout happening,” Smith said. “We’ve been seeing that quite a bit lately. There is the child care aspect, school may or may not be in session, keeping up to date with all of the current COVID policies, and finding time to fill out grant applications. The amount of information is crushing people. It’s really difficult to stay up on everything.”

Many of GROW’s webinars are transitioning into platforms where small business owners can share tips and also commiserate over shared obstacles that their business has gone through in the past year and a half, Smith said. 

“What I really think is happening is society is reforming itself. We know who essential workers are and how valuable they are and that they have to be compensated and paid in a different way. A more human environment is needed so we can integrate our personal and professional life. Women want to be paid appropriately for the essential work they do,” Cassin said.

While the state’s new budget has injected $1.4 billion of federal funding into various child care initiatives, Cassin said employers need to first take initiative to come up with creative solutions to help employees.

“We can’t wait on the federal government to solve these problems, even though I think they should,” Cassin said. “These issues are central to the future of work — women’s issues are central to how our economy is going to rebound. We have to take the time to solve these problems. If we have to, we will solve them company by company, organization by organization.”

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