COVID-19 Pandemic Heightens Financial Challenges for Women

Findings from the Capital One Insights Center reveal that women are feeling more financially unhealthy than their male counterpart

Capital One recently launched the Capital One Insights Center, and its first release, Capital One Marketplace Index: The Road to Recovery. Since spring 2020, the Capital One Insights Center has conducted studies every four to eight weeks with a nationally representative group of U.S. respondents (based on income level, race, gender and geographic region), covering a range of topics from job loss, to how they used government stimulus, to their outlook on economic recovery. The study release divides respondents into three income groups to better understand the impacts: low-income earners making less than $25,000 in household income annually; low-to-high middle income earners (hereinafter referred to as “middle-income earners”); and high-income earners making $100,000 or more. The analysis also includes a selection of data points related to race and gender. To account for potential correlation between demographics and income, those data points all focus on consumers with household income less than $50,000. The study reveals new data reflecting the disproportionate impacts of the COVID-19 pandemic on women. 

Women—especially mothers, lower-earning working women of color—have faced distinct challenges over the past year and a half. In the first 12 months of the pandemic, 2.3 million women left the U.S. workforce, accounting for 53 percent of US labor-force exits.

Findings from Capital One’s Marketplace Index: The Road to Recovery, the inaugural study from Capital One’s new Insights Center, found that as of August 2021, nearly half (48%) of women earning $50,000 or less were still working fewer hours or had stopped working altogether—compared to just one-third of men earning the same. 

Without additional employer support and ensuring pay equity, there is fear that participation from women in the workforce could face its steepest sustained decline since World War II.

Working Mothers During the Pandemic 

In many instances, the decision to leave the workforce was linked to what’s been coined as the “triple burden”—women trying to manage their careers, domestic responsibilities (such as childcare) and additional emotional stress brought on by the pandemic. 

For parents with kids under the age of 10, in particular, the rate at which women left or downshifted their careers was ten percent higher than men—primarily because women were spending an additional three to five hours per day on childcare and household responsibilities, bearing more of the burden at home than their male counterparts. 

While families across the income spectrum struggled to find consistent childcare, lower-income earning households (those earning $25,000 or less annually) faced the most severe challenges. According to data from the Capital One Insights Center, since spring 2020, more than twice as many lower-earning women (25%) dropped out of the workforce to take care of children compared to the general population (12%). They also left the workforce more often than lower-earning men (16%). Even women earning up to $50,000 felt a disproportionate strain compared to men: nearly half (48%) of women in this income group had to cut back or stopped working compared to just one-third of men earning $50,000 or less.

Financial Well-being Among Lower-Income Earning Women

In August, 2021, nearly 60 percent of lower-income women surveyed were more likely to be concerned about affording day-to-day bills and expenses compared to 53 percent of men and 42 percent of the general population.  

Lower-earning women are also twice as likely (26%) to have much less in savings now than before the pandemic compared to the general population (13%) and nine percent more likely than men (17%). 

Additionally, 28 percent of lower-earning women cite paying bills and expenses as their number one source of stress in the past month compared to 18 percent of lower-earning men and 17 percent of the general population.

Lower-earning women were also more likely to use government assistance to pay bills (74 percent) compared to lower-earning men (64 percent).

Women’s sense of financial health has also been deteriorating more over time due to the pandemic compared to men’s financial health. Among those earning $50,000 or less, 39 percent reported feeling financially unhealthy—up from 31 percent in April 2020. 

On the other hand, men earning the same annually trended in a positive direction: in August 2021, 29% reported feeling finally unhealthy, compared to 42% in April 2020, a 13 point improvement compared to women’s 8 point decline.

Additionally, only 10 percent of women in that income bracket are prioritizing investing their savings or income. For men earning the same, the share of those prioritizing investing doubles to 20 percent and then nearly doubles again to roughly 40 percent among higher earners (those earning more than $100,000). 

Financial impacts of the pandemic have disproportionately impacted lower-earning women of color. According to a Pew Research study, Black and Hispanic/Latinx women saw some of the highest unemployment rates, whose overrepresentation in jobs shuttered by the pandemic, like retail and restaurants, put them at higher risk for job and income loss. 

Even with the possibility of remote work, many employees—Black and Hispanic/Latinx mothers especially—were struggling to do their jobs with the boundaries between work and home being obscured, leaving workers feeling “always on” and “burned out”.

Lasting Effects of the Pandemic on Women

While lower-earning women continue to face some of the greatest hardships as a result of the pandemic, even higher-earning women experienced negative impacts.

At the beginning of 2020, the representation of women in corporate America was trending—albeit slowly—in the right direction. Between 2015 and 2019, the number of women in senior management positions had increased from 23 percent to 28 percent, and in C-suite positions from 17 percent to 21 percent. However, the COVID-19 pandemic dealt a major setback.

Some research indicates that with heavier demands at home during the pandemic came added pressure at work. For years, there’s been a false perception that working mothers can’t be fully invested in both family and work, and are therefore less committed than fathers and women without children. When mothers take advantage of flexible work options, that perception is strengthened, even if they are just as productive as other employees. With family demands being front and center during the pandemic—and sometimes literally visible to co-workers over video-conferencing—this bias intensified. Mothers became more than twice as likely as fathers to worry that their performance was being judged negatively because of additional caregiving responsibilities. They were also far more likely to feel uncomfortable sharing work-life challenges—or that they’re a parent at all—with colleagues.

The possibility of losing so many senior-level women is alarming. Research shows that when women are well represented at the top, companies are 50 percent more likely to outperform their peers.

Additionally, when women eventually return to the workforce, they may face an “unemployment penalty,” a lower returning salary than they would have received had they still been employed while job searching. According to a 2021 Gender Pay Gap Report published by PayScale, a compensation data and software company, people who are unemployed while looking for a job earn 4 percent less in their new roles than people who were employed at the time of their job offer. 

"We know the COVID-19 pandemic will leave devastating effects in its wake and one of those will be the impact on women in the workplace," said Margaret Donnell, Managing Vice President and Head of Consumer Intelligence. "Capital One has a long-standing commitment to promoting equity in the workplace, a critical and necessary step toward advancing our nation’s economic recovery.”

Acting Now to Improve Gender Equity

At Capital One, we believe that we can change banking—and society—for good. We view this as a commitment to building positive relationships through two different lenses: as an employer and as a community member.  

When the COVID-19 pandemic began, we knew that we needed to pivot to support the women who work at Capital One. We listened to them and made changes like allowing for more flexibility with daily work schedules, offering more paid leave days, waiving co-pays on virtual health and mental wellness visits, and offering discounts on childcare services.

While women who work at Capital One have been instrumental in making the company what it is today, the truth is that it’s our communities and the women who live in them that allow us to thrive. So we’ve prioritized partnering with community organizations that create opportunities for women—particularly lower-earning women and women of color—to thrive, supporting programs focused on financial education for women, helping to teach underrepresented girls how to code and connecting Black women entrepreneurs through digital summits. Many of these programs are a part of the Capital One Impact Initiative, a $200-million, five-year commitment to closing gaps in equity and creating an inclusive society for all. 

Read the Capital One Insight Center’s inaugural whitepaper: Capital One Marketplace Index: The Road to Recovery.

CLAIM: The Capital One Marketplace Index: Road to Recovery is one of the longest running surveys on the social and economic effects of COVID-19 by a private enterprise to date (beginning April 2020 to present; running continuously every six weeks).

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