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COVID-19 and the Female Labor Force: Why the Gender Gap is Getting Wider

April 13, 2021

In this report, J.P. Morgan Research takes a look at the impact of COVID-19 on the gender gap across the private and public sectors. The pandemic has had a disproportionate effect on women and their economic status, resulting in historic setbacks as women have faced major disruption due to the nature of their jobs and greater responsibility for child care. The silver lining is that women have made slow but positive progress in terms of leadership, particularly taking up policy-related positions in the U.S. and Europe.

Declining Female Labor Force Participation: Job Losses During COVID-19

Female participation in the labor force has suffered historic setbacks as a result of COVID-19, declining to a 33-year low in the U.S. Between the start of the pandemic and January 2021, the total number of women leaving the U.S. labor force reached over 2.3 million, compared to 1.8 million men. This brings the overall U.S. female labor force participation rate to the lowest level since 1988.

The crisis has highlighted the importance of gender-responsive policy. “Taxation, protections for part-time workers, paid family leave, provisions for child care, and education spending can incentivize women to remain in and enter the workforce by lowering the marginal cost of external versus household work,” observed Jessica Murray and Katherine Marney, Emerging Markets Economic and Policy Research.

The Gender Gap in Boardrooms and C-Suite Roles

The percentage of women on corporate boards remains the most commonly used metric to measure gender balance at work. Steady progress has been made over the past few years – while it continued during the pandemic, improvements happened at a slower pace. In 2011, just 14.6% of board seats belonged to women, according to company data from the Fortune 1000. By 2020, female representation on Russell 3000 company boards had climbed to 22.6%, up from 20.4% in 2019 according to data from the 2020 Women on Boards Gender Diversity Index. However, the pace of advancement slowed compared to 2019’s 2.7% gain.

corporate_chart Created with Sketch. Continued gains for women serving on corporate boards 22.6% 20.4% 17.7% 16.0% 0% 5% 10% 15% 20% 25% 2020 2019 2018 2017 % of female directors at Russell 3000 companies Source: 2020 Women on Boards Gender Diversity Index

While female representation on corporate boards has been steadily increasing to a significant level, the same cannot be said of women in the C-suite. Female representation remains little changed – just 7.4% of Fortune 500 company CEOs were women in 2020, compared to 6.6% in 2019 (as tracked by Catalyst).

“While progress has been slow, representation for women on corporate boards has improved over time, suggesting a positive impact from inclusion in ESG metrics. Progress for bringing more women into the C-suite has been more challenging,” said Kimberly Harano, Strategic Research.

The Gender Pay Gap

Pressure on companies to increase transparency around gender pay equity has continued to build, whether it’s from mandated reporting requirements, industry best practices or shareholder activism. In the U.S., disclosure of the gender pay gap is still not required at the company level. Outside of the U.S., the U.K. introduced gender pay gap reporting regulations in 2017, applying to all public, private and voluntary sector organizations with more than 250 employees.

“The gender pay gap has stagnated in the U.S. at ~17.7% for the past decade with little change for the U.K. at 16% for 2020-2021 after widening in earlier years,” noted Phoebe White and Teresa Ho, U.S. Fixed Income Strategy. The National Bureau of Economic Research predicts that the pandemic could result in a widening of the U.S. gender earnings gap as great as 5%, compared to a 2% narrowing after a more typical recession.

How Does a Widening Gender Gap Affect Black and Latinx Women?

Black women benefited from some of the largest employment gains between 2015 and 2019 as the strong labor market pulled in new workers, yet now they have experienced the most significant setbacks. Analysis by the JPMorgan Chase Institute finds that Black and Latinx women earn just 58 and 59 cents on the dollar compared to white men. For every dollar held by white men in liquid assets, Black women have just 26 cents and Latinx women have 37 cents. Fiona Greig, Co-President of the JPMorgan Chase Institute, noted that women-owned businesses represent only 18% of small businesses that rely substantially on external financing.

assets_chart Created with Sketch. Ratio to white men Black women Black women Black men Latinx women Latinx women Latinx men White women .26 .29 .37 .45 .74 .36 .51 Ratio to white women Source: JPMorgan Chase Institute (2018) Ratios of median liquid assets: black-white, Latinx-white and gender splits

Major Breakthroughs for Female Leaders: Women in Public Leadership Roles

One silver lining for women is the increased female representation in public leadership roles in developed-market countries, as COVID-19 has been a great leveler between the individual elements of ESG – that is, environmental, social and governance factors. Increased focus on the social and governance aspects has given rise to stakeholder capitalism, according to Joyce Chang, Chair of Global Research. Europe remains the leader in advancing gender balance policies, but the Biden administration has appointed the most gender-diverse cabinet in U.S. history, while a record number of women now serve in the U.S. Congress. The Biden administration has launched a new White House Gender Policy Council to help advance gender equality, and Biden’s agenda for women encompasses a wide range of issues, including health care, the economy, education and foreign policy.

The Most Gender-Diverse Cabinet in U.S. History

Source: Center for American Women and Politics.
Note: as of March 18

The 2020 U.S. elections not only delivered the first woman of color as vice president, but also set a new record for women heading to Congress. This broke the previous record set in the 2018 midterm elections, led by Republican gains.

JPMorgan Chase’s Commitment to Gender Equity

At JPMorgan Chase, the commitment to improving equality for women and girls is more important than ever as we have seen women bear the brunt of the economic burden. Women on the Move (WOTM) is a global firm-wide initiative designed to help women both inside and outside the firm. It has three core aims: to expand women-run businesses, improve women’s financial health and empower women’s career growth. Sam Saperstein, Head of Women on the Move for JPMorgan Chase, outlines why achieving these objectives is essential in combating a long-term “shecession” caused by the pandemic.

“Our work to expand women-run businesses is focused on female small business owners. Chase has worked with tens of thousands of women to fund their businesses under the government’s Paycheck Protection Program. Our research has shown that cash flow management has been a key focus area and pain point for small business owners. WOTM partnered with Chase for Business to create an interactive, online curriculum for small business owners on the topic of cash flow management. This is titled “Navigating your Cash Flow,” and it’s available to all current and prospective clients.

In 2019, Chase Consumer Banking rolled out a feature in the mobile app called Autosave. This allows users to automatically transfer money into savings accounts based on customized rules, like saving after each pay period or after visiting certain merchants. We’re pleased to report that women continued to use this feature in 2020, with more than 1 million women signing up for Autosave. In the first two years, women have saved $1.4 billion with this tool and have saved a greater percentage of their earnings than men.

A recent study on women and investing by J.P. Morgan Wealth Management showed that Black and Latinx girls get a clear head start on building wealth when their parents talk to them about money and set up a savings or investing account. We partner with the national nonprofit Girls Inc. to reach more than 30,000 girls across the country with financial literacy tools and resources that will set them up for economic empowerment.”

JPMorgan Chase’s Approach to Gender Equality

Pursuing gender equality is a top priority for JPMorgan Chase. Here are some statistics that demonstrate JPMorgan Chase’s focus on empowering and advancing women employees.



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