Women Entrepreneurs and COVID-19

February 2021

By EWI Contributors

A year into COVID-19 and the effects of the pandemic are yet to be fully realized. The crisis exposed and deepened structural inequalities as marginalized communities face disproportionate impacts. Economic and social strains threaten to the progress towards equality. Since the crisis began, organizations like the United Nations, the World Health Organization, and the International Labour Organization, among others, have published policy briefs and studies examining the impact of COVID-19 on women and girls. These are highlighted on the UN Women website “How COVID-19 Impacts Women and Girls.” On the website, there is information about the economic and health impacts, conflict, and gender-based violence. These issues are interconnected.

Empowered Women International, a program of Latino Economic Development Center, supports immigrant, refugee, and women from underserved communities who want to pursue entrepreneurship to engender economic mobility and personal growth. Entrepreneurship is complicated in the best of times. Marginalized women entrepreneurs need educational and financial backing now as they face challenges and unpredictability. We wanted to look at the economic toll of COVID-19 on women and women entrepreneurs, as well as related impacts.  

Women have disproportionately become unemployed due to social distancing measures and lockdown orders. According to the McKinsey Global Institute’s article “COVID-19 and gender equality,” women’s jobs are 1.8 times more vulnerable to crisis than men’s jobs. A major factor contributing to this vulnerability is the fact that women, especially women of color, are more likely to work in retail, service, and other affected sectors. In the US, women made up 46% of workers before COVID-19 and data suggests they faced 54% of job losses.

Unemployment is not solely affected by the industries of employment. Women carry most of the burden of unpaid care work and domestic work. Estimates show that women do nearly three times as much unpaid care and domestic work as men. School and childcare closures and pressure on healthcare systems increased the need for such labor. In a  May 2020 survey, participants reported that the amount of unpaid care and domestic work increased compared to before the pandemic. People are spending more time at home cooking, cleaning, taking care of children, and relatives than before. The gender distribution of these tasks has not shifted. Women work more of these unpaid labor hours and are more likely than men to cut their employment hours or resign to meet these demands. Even after accounting for men and women’s different average industries of employment, the women’s unemployment rate increased more than men’s unemployment rate.

The gender divide in unpaid household labor affects women’s mental health. Women were more likely than men to report increased feelings of anxiety, stress, lack of motivation, or depression since before the pandemic than men. Some portion of the increase in these feelings is related to the economic consequences of COVID-19.

The economic and social effects of the pandemic have long-term implications. Unemployed and underemployed people will have less career experience, save less money, and suffer from limited financial access. Based on data from past epidemics, adolescent girls are at risk of dropping out of school and not returning after the crisis is over. As such, the pandemic is harming gender equality short term and is also slowing or even regressing progress long term.

Women, particularly immigrant, refugee, and women from underserved communities may struggle to re-enter the workforce. Entrepreneurship can offer some women a way to support themselves in such a situation. However, launching a business can be daunting in the best of times, let alone in an economy battered and in flux by a pandemic. The same social distancing measures that contribute to unemployment affect the businesses of women entrepreneurs. Furthermore, families are less likely to have capital to invest in starting or maintaining micro-enterprises and or extra computers and devices as children use all available computers for online education. The McKinsey Power of Parity research found that “both digital and financial inclusion, notably access to credit from financial institutions and access to mobile banking, are closely related to the presence of women in the labour force.” Businesses around the world and here at home in the Washington D.C. Metropolitan Area have been struggling to survive. Support for small businesses and local entrepreneurs is critical if we want to elevate the marginalized.

Since the beginning of the pandemic, co-executive director of Think Local First, Kim Dreux-Kelly has been helping local independent business owners get back on their feet. She learned about the fragile state of these businesses and what they needed to grow and thrive. She believes that COVID-19 has especially taken a mental toll on women business owners, “These businesses are their livelihood. They become a part of who they are, their identity. They wrap their whole life savings and their hard work into these businesses.” She encourages that Black and Latina-owned businesses reach out to organizations that offer support, like the Latino Economic Development Center.

Strides forward in gender equality were stagnating even before the pandemic. There is a risk that the gender equality regression would make the previous stagnation become a norm. This threatens women’s economic and social wellbeing long-term and negatively affects the whole economy.

What can we do about it? On a policy level, major steps to helping women include inclusion in the workforce, addressing the imbalance in responsibility for unpaid care and domestic labor, and addressing digital and financial inclusion. On a smaller scale, you can donate or volunteer with organizations that help women, like Empowered Women International, a program of LEDC, and shop at local small businesses owned by marginalized entrepreneurs.

Latino Economic Development Center makes it easy to shop small, minority-owned, and woman-owned with the LEDC Business Directory. If you want to learn more about the overall benefit of supporting local woman-owned businesses, check out our article, “Five Reasons to Support Local Women-Owned Businesses.”

Sources:

UN Women: How COVID-19 Impacts Women and Girls

McKinsey Global Institute: COVID-19 and gender equality: Countering the regressive effects

Oxfam, Promundo-US, & Mencare: Caring Under COVID-19: How the Pandemic Is- and Is Not- Changing Unpaid Care and Domestic Work Responsibilities in the United States