Pandemic drags women’s financial progress

The Financy Women’s Index rose by 0.4 percentage points to a revised 71.3 points in the March quarter, compared to 71 points in the December period. The quarterly pace was the weakest since September 2018, with a slowdown in full-time employment growth among women and rising unemployment relative to men weighing on the result. 

Financy reported the index result means that based on the rate of progress, economic equality in Australia is at least 32 years away. But the group has speculated the timeframe could expand, depending on the long-term impact of COVID-19. 

The timeframe for achieving gender equality in superannuation was 19 years. Based on 2017-18 data, the report noted, women are retiring with 31 per cent less super than men – but the gender gap is likely to widen if the pandemic has a sustained impact on employment and wage trends.

Full-time job numbers had remained largely consistent, up only 0.1 per cent to 3.35 million during the quarter, while male full-time employment rose by 0.9 per cent to 5.49 million. 

Prior to the pandemic, full-time employment growth for women had been stronger, but the rate of men has now become 10 times that for women.

Bianca Hartge-Hazelman, founder of Financy Women’s Index said if the initial impact of COVID-19 continues to hit female employment harder, it could “exacerbate gender gaps in wages, superannuation and in unpaid work”.

Dr Shane Oliver, chief economist and head of investment strategy at AMP Capital, noted the initial impact of the coronavirus shutdowns will fall harder on women than men, because the industries copping the heaviest impacts such as arts and recreation, hospitality and retail, have a higher representation of female employees.

“This is all very different to past economic downturns which have tended to disproportionately impact males – particularly older men – harder because the economic hit was primarily to cyclical sectors like construction and manufacturing with the services sector holding up much better,” Dr Oliver said.

Women’s retirement savings could also be disproportionately affected by the early super release, the report noted, as they are more likely to be affected by job changes and have lower balances to begin with. 

OneVue chief executive Connie Mckeage added: “This is not the time to become complacent, nor to create excuses as to why women continue to suffer financially more than men during difficult economic periods. We must look at how COVID-19 will have a material and lasting effect on women’s retirement outcomes.”