After low-income women lose their jobs in the COVID-19 economy, what happens to them?

In the last decade, as the Ethiopian government has moved toward industrialization, tens of thousands of women have made the journey to the factories of Hawassa, a large city in the country’s south.

For these women, a job sewing clothes has been a rare chance at a formal job and a steady paycheck. Hawassa Industrial Park employed nearly 30,000 workers, many of them rural women whose only other employment opportunities were informal, subsistence-level work. Yet before there was even a single confirmed COVID-19 case in Hawassa, before any government-ordered lockdowns, thousands of these women were put on leave. Half a world away, garment orders—from blue jeans to prom dresses—had been canceled, and factory work slowed.

The women of Hawassa “are kind of operating at the margins of the global value chain, they're trying to eke out a better life,” said Morgan Hardy, assistant professor of economics at NYU-Abu Dhabi, who together with colleagues is studying the impact of the pandemic in Hawassa as part of a larger project on the lives of women working in Ethiopia’s garment industry. “But they're being affected in this indirect market way, in a way that you might not have thought.”

In other words, she said, a cancelled prom in New Jersey can mean women in Hawassa don’t have enough to eat. It’s a story that’s being repeated all around the world as global markets have dried up with the pandemic. And while millions of men have lost jobs too, COVID-19 is having a disproportionate effect on women’s work, according to recent research from the World Bank and others. A McKinsey study published in July estimated that around the world, women’s jobs are 1.8 times more likely to be cut in this recession than jobs held by men.

Fewer plan B’s

Even in the best of times, women facing economic loss have fewer plan B’s than men. Few of the women on leave from the Hawassa factories, for example, have found other employment.

“Women are pushed into doing this dance between full-time and part-time, formal and informal,” said Aishwarya Lakshmi Ratan, who works on gender equality issues at the Gates Foundation. Women’s jobs—particularly those in the informal sector—tend to have fewer institutional buffers to risk, such as health risks, safety risks, and market risks, and profit margins are exceedingly slim.

In India, for example, 94% of female workers operate in this informal sector. And now, COVID-19 has made this work even more precarious, both in terms of health and economics. Street vendors operate in crowded spaces where disease is more easily transmitted, so some governments quickly moved to close them. That meant no income for some, and no food for the millions of people who rely on this low-cost option. In some places, it sparked a humanitarian crisis. Even where markets were open, customers were less inclined to shop.

Women have long faced economic disadvantages including a well-documented profitability gap between men’s and women’s work. Among the reasons: Women have less access to credit. They face sexism, discrimination, and fixed notions of gender roles. Also, as Hardy, along with Gisella Kagy, an assistant professor at Vassar College, illustrated in research out of Ghana, because women have fewer options for employment, they tend to congregate in a small set of industries that cater to women—“think of haircuts,” Kagy said, or women’s clothing. Overcrowding creates an oversupply and, thus, lower earnings. And when formally employed women such as those in Hawassa lose their jobs, their only choice in many cases is informal work, which, in turn, may bump other women even lower on the economic ladder.

With the pandemic, women’s predicament has deepened in other ways, too. With children home from school, responsibility for their care falls disproportionately on women, and this unpaid care has long been an obstacle for women’s work. They’re more likely to work in fields, such as hospitality and travel, which aren’t likely to bounce back quickly. A July World Bank report showed that in Ethiopia, women-owned businesses made 80% less than they had the same month the previous year. Meanwhile, the same report said 57% of workers laid off in June were women, even though they made up 42% of the workforce.

History shows that women’s economic security suffers more than men’s during disease outbreaks, and that it’s a long, slow, road to recovery. When Ebola hit Liberia in 2014, the Liberian unemployment rate nearly tripled for both men and women, but whereas men’s incomes tended to bounce back quickly, women’s took much longer. A little over a year after the Ebola crisis, 63% of men who lost their jobs had returned to work, compared with only 17% of women.

Possible fixes, from e-rickshaws to “traditional garb” days

Many countries have provided various forms of support for struggling families and businesses, but few have considered the pandemic’s disproportionate effect on women.

“It's very hard to see what the other end of this crisis is going to look like at the grassroots level, at the base of the economic pyramid,” said Sally Roever, international coordinator of Women in Informal Employment: Globalizing and Organizing (WIEGO). “Street vendors can go in the street, but there's no one to sell to. Home-based workers can make things, but there's no one who will buy them. So that's the real challenge now.”

Her organization has long worked through existing supply chains to plot a course—stepping stones, she calls them—towards greater economic opportunity. Now, “all of those economic linkages are broken.”

She believes governments need to step up to address these structural issues. “We have corporate bailouts to keep the big players going with the idea that job creation will follow,” she said. “What we need is for governments to be thinking…how do we rebuild some of those linkages from the ground up?”

One idea that was quickly put into place involved linking vegetable sellers in Ahmedabad, India, with e-rickshaw delivery. With street markets unavailable and curfews preventing travel, this Vegetables on Wheels program delivers food where it is needed.

In Thailand, innovators are urging the government to create demand where the market has dried up due to the pandemic. A new idea, supported by HomeNet Thailand, is to require government officials to wear traditional clothing a couple days a week, thereby increasing demand for products made by home-based workers.

Hardy and Kagy have seen how increasing demand boosts women-owned businesses. In an experiment that investigated the effect of increased demand, they placed clothing orders to microenterprises in Ghana. The businesses run by women stepped up their work to meet the additional demand, while male-owned businesses did not. Their research didn’t track what those women did with the additional income, but they wonder whether there’s a multiplier effect. In the clothing sector, they found, women buy from other women. So would one dollar to one woman become many dollars for many women?

In India, an existing public works program for rural families, the National Rural Employment Guarantee Scheme (NREGS), has become a popular opportunity for migrant workers who have returned home after losing their jobs in cities.

“The beauty of the program is that wage employment is provided very close to home, within the village, and jobs can be assigned while maintaining physical distancing,” said Subhalakshmi Nandi, a Gates Foundation program officer who works on gender equality in India. For example, the program might pay for a water project on a family’s field or agricultural improvements in the region. In the past, more than half the workers have been women. It provides a family up to 100 days of work in a year, on demand. Months into the pandemic, many families have already used up their 100 days. Meanwhile, women’s participation is now dipping. Some suspect this is due to the large flow of male migrants who are returning to their villages in search of work.

“These existing programs have huge potential and may need to be expanded,” Nandi said. “A lot of policy watchers are saying let’s make it 200 days…And can we have dedicated strategies to ensure women are able to participate in the program as they did before the pandemic?”

There’s also opportunity for the government to formalize grassroots efforts that sprang up during the pandemic. Early on, Indian women’s groups began making masks. Initially, there were hiccups in obtaining raw materials, working capital, and payments to these groups. But with experience, these can be transformed into public procurement programs and expanded into other areas, too, such as supplementary nutrition schemes and community kitchens. Many states in India have already started such programs.

Fully implementing existing affirmative action policies is another opportunity. For example, in Kenya, public procurements quotas for female-led enterprises aren’t yet being met.

For Roever, another lesson is just how valuable these informal workers are. “They really grease the wheels of the economy,” she said. Street food vendors feeds millions; domestic workers allow their employers to go to work; waste pickers sort recyclables. “The question is, will we see a different discourse emerge and different policy practices emerge because of the recognition over the past few months?”