The Firestorm Recession
Recession and market corrections go through the economy just like a brush fire. They can be unpredictable and capricious. Some trees are left standing while others are burnt to the ground. In the Great Recession, men’s employment was hit hard. Men occupied most of the construction and manufacturing jobs, which ground to a halt during that recession. Women lost significantly fewer jobs because they were in service area’s like health, education, and government jobs.
This recession is completely opposite. All those services jobs in health and education are not only forcing women to lose their jobs, many are opting out of the work force because they have to make choices between taking care of their children or parents, or working in a high risk job that doesn’t pay that well to begin with. Stretched to the limit, women are quitting at four times the rate of men.
Women are still paid about 30% less than men even when accounting for education and job title. For many, it is simply cheaper and safer to not work outside the home. I should note that men’s employment rebounded rather quickly after the Great Recession and they went on to pass women in growth of wages.
But women opting out of the work force can have devasting long term impacts on women’s financial health. Currently, a woman must work an additional FIVE years to make up one year of lost wages and benefits. Keep in mind, when you are not working, you are not gaining credits in the social security system or putting money in the company retirement plan. Of course, this may be the only option for many families. They just need to be aware of the long-term impacts.
My hope is that families decide who stays home in a thoughtful manner and not based on traditional gender roles. In my own journey there were a few years where my husband stayed home because it made the most sense economically and it worked out great. He developed a close relationship with our children.
If you decide not to work outside the home (I hate when people say they do not work because they are a stay at home mom- you work the hardest of all jobs. Personally, I go to work to relax!) consider revamping your budget so you can continue to at least contribute to an IRA annually. This will help ensure you have retirement assets in your own name.
In addition, I always urge stay at home people to consider yourself the CEO of your home. Run it like a business. Money comes in, you have supplies to buy, employees (Children) you must train, and goals to achieve. Make a budget, understand where the money is going. And most of all, do not waste it. A one income family must be incredibly careful with its spending, but it can be accomplished.
This crisis shall pass. Even after a brush fire, the grass will grow again. Life will return. It will be different, but it does not necessarily mean that it will be worse. Perhaps many families will find new joy in spending so much time together. Maybe we will all learn empathy for frontline workers and especially for the teachers of our children. Take this newfound time with your families to reflect and build a better future.