Women, especially women of color, have been significantly impacted economically by the COVID-19 pandemic. From higher grocery prices, to inadequate availability of childcare and health care, to below-average access to sick and family leave – communities of color in the United States get hit in the sack.
The data shows that various teams are winning. A McKinsey study found that companies with a greater number of employees of various races and ethnicities have a 35% performance advantage on companies that tend to be white and monocultural. Before the pandemic, women of color started businesses at the highest rate among American demographics, and they represent a large pool of well-educated, unskilled workers. Changes in Workplace Diversity as the Great Resignation reshapes staffing, women of color will be overworked, less productive, burn out, or fall ill themselves. This will inevitably result in less innovation, less profitability and less well-rounded decision-making.
Let’s dive deeper into the key social and economic issues that leaders and policymakers must address to keep the US economy healthy:
1. Child care
Women will continue to bear the brunt of the economic fallout from COVID largely because of the child care crisis. In America, 75% of primary caregivers are womenand the stress of overlapping work, childcare and the looming weight of childcare insecurity crushed many, especially during this time.
As a leader, providing flexibility to your employees is essential for successful performance. Because women tend to be the primary caretakers of their families, flexible hours, access to remote work, and guaranteed sick and family leave are absolute necessities to stay productive in the workplace. A one-size-fits-all policy does not work. Child care is not the only problem – one in four primary caregivers for the elderly are millennials.
Flexible work environments provide primary caregivers with guaranteed time to care for their children and elders in the event of an emergency, illness or caregiver absence. At the federal level, the expansion of the child tax credit will allow parents to pay for the child care they need.
2. Inflation and cost of living
It’s time to match wages to inflation. The US inflation rate reached seven% in December 2021, but the federal minimum wage is still $7.25 an hour — the same as it was in 2009. Many Americans are understandably angry. They are hungry, unable to pay rent and unable to support themselves and their families.
In response, there is a growing trade union movement. We have seen the rise of anti-work subreddit, numerous employee walkouts demanding higher pay, unionization in some department stores (Starbucks) and the increasing traction of the “Big Resignation”.
Often, you’ll find a restaurant manager or grocery store supervisor complaining about being short-staffed because “everyone is quitting to get unemployment.” Indeed, in many cases unemployment actually pays more than their company’s salary.
The only thing that will keep employees is paying them more than just enough to survive. For many people, unemployment is still less than a living wage. So if a company has experienced a mass exodus of workers to a government subsidy that still can’t make ends meet, the company’s inadequate pay is likely the problem – not the other way around. The reality is that to avoid mass walkouts, companies need to stop focusing on minimum wage and start paying a living wage.
While inflation and the cost of living affect all Americans, they disproportionately affect people of color, especially women. As we saw in 2020 with the K-shaped economic recovery, many of the industries that managed to stay afloat (and profit) amid the pandemic were technology and software services, while industries which suffered the most were travel, hospitality and food services.
the People of Color Technical Report published in 2020 showed that only 16% of tech workers were black and 12% were Hispanic. According to American Progress, of all employed women of color, the highest percentage work in professions such as cashiers, registered nurses and elementary and middle school teachers – the industries and institutions that are suffering the most during the pandemic.
3. Inadequate health care
The uncomfortable truth is that most Americans do not have access to high quality and/or affordable health care, unlike citizens of most other developed countries in the world and even many smaller ones. Additionally, women of color historically have less savings and less capital, and therefore a greater burden to cover medical expenses for themselves and their families. According to 2018 US Census, 27.9% of households with a black householder had medical debt, compared to 17.2% of households with a white householder. Additionally, households with a Hispanic head of household were also more likely to have medical debt (21.7%) than white households (18.6%).
Without proper investment in employee health care, staff will have to dip into paychecks and savings to pay medical bills. A bad health care plan is effectively a significant pay cut for employees. Businesses should opt for plans that offer adequate coverage, low deductibles and low monthly payments. Although more costly initially, the investment will pay off when employees can focus on productivity rather than the stress of paying medical bills.
Many low-wage and front-line workers are chronically underinsured and uninsured. Americans need federal policies that make health care universal for all citizens. The leading cause of bankruptcy in the United States is medical debt (more than 60% of those who declare bankruptcy). Meanwhile, in countries where health care is comprehensive and universal, medical bankruptcy is virtually unheard of.
4. What comes next
2020 and 2021 have been cataclysmic and unprecedented years for Americans. As COVID continues to produce strains of varying virulence, the most marginalized people in American society will bear the brunt of the damage: namely women, especially women of color.
Martin Luther King, who received the Nobel Peace Prize in 1964, said: “There is nothing new about poverty. What is new, however, is that we have the resources to get rid of it. Nearly six decades later, a wave of strategic pressure on key decision makers in American business and politics is still needed to restructure an American work system that simply isn’t working for many people. Business leaders need to step up and speak out. While this is an uphill battle, there are ways to effect deep, fundamental change that will ensure a healthy US economy now and into the future.
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