W@W Topic of the Month

May 2009

Women and  the Recession

The recession is hitting many people hard – especially women.

Although there is little to be gained at this point by pointing the finger of blame, arguably lessons can be learnt. As the Fawcett Society Report ‘Are Women Bearing the Burden of the Recession?’, published in March 2009, pointed out, the banks and other financial organisations which contributed to the collapse, are led almost entirely by men. Only 12% of directors of the FTSE100 are women. While clearly it is too simplistic to state that more women in positions of responsibility would have prevented the recession, it is common sense that more women on the boards would have given a broader range of advice, talent and perspective (and a similar argument holds for ethnic minorities – and doubly so for women ethnic minorities).

It is clear that the recession will disproportionately affect women, simply because women hold more part time and low paid jobs, and are less likely to have savings to weather a difficult time. Equal pay depressingly remains as far away as ever. The latest figures for the UK show that for every pound paid to a man, a woman earns only 77p. Nor are women’s incomes simply for luxuries in the family. Almost a quarter of families are headed by lone women. In families with another earner, women’s earnings are increasingly important to the family income.

Women are likely to suffer in other ways as a result of the recession. Even before the recession over 30,000 women a year lost their job because they were pregnant or on maternity leave. This figure is likely to rise as jobs become scarcer. It is also clear that women are more at risk of domestic violence in economic downturns. Already data from police seem to indicate a rise in the first months of 2009.

This is not an issue confined to the UK or Scotland. Indeed, a recent Oxfam report ‘Paying the Price for the Economic Crisis’ show that the recession has an even worse effect on women in third world countries.

Glimmers of Optimism 

While all of these factors make grim reading, there are some glimmers of optimism. A report by Ernst & Young, ‘Groundbreakers. Using the Strength of Women to rebuild the World Economy’ highlighted studies which have shown that companies with more women in leadership roles have better financial performance. These conclusions are based on a number of studies and make compelling reading. Shareholders of conservative boardroom companies should sit up and take notice – better equality and diversity leads to better profits! The report argues that encouraging more women to become involved may therefore pull us out of the economic recession faster.

Figures recently published by Barclays have shown that there are more business startups by women than men in these difficult times. 
However, a separate study found that women running their own businesses felt that entrenched sexism, rather the difficult financial climate, was their biggest barrier.

Barack Obama seems to agree. He has signed new equal pay legislation as one of his first political acts. In the UK, the government’s recently launched Equality Bill has recently also highlighted – again - the need to tackle equal pay in the workforce. 

What can be done? 

The Fawcett report argues that we must:

• promote women’s rights and stamp out discrimination. In particular, the government must monitor and deal with maternity-related discrimination.
• redouble efforts for equal pay. The Equalities Bill is a start, but it must lead to real change, not simply the platitudes of the past decades.
• promote flexible working as part of the solution. This would benefit men and women – and arguable help companies survive in difficult times.
• fast track women into decision making positions. Despite the research mentioned above, many companies remain entrenched in old boy’s ways and networks. Quotas have addressed the balance in other countries such as Norway, and the Fawcett Society would like to see quotas in FTSE companies.
• ensure women’s skills are harnessed to make full use of potential. The Women and Work Commission has estimated that closing the gender skills gap would boost GDP by £15 to £23 billion per year. As a result, it is critical that women are given equal access and support in any skills and back to work programmes, and these programmes must be flexible for childcare issues.

  
Further Information:

Fawcett Society Report ‘Are Women Bearing the Burden of the Recession?’ (March 2009)

Ernst & Young, ‘Groundbreakers. Using the Strength of Women to rebuild the World Economy’ (2009)

Oxfam report: ‘Paying the Price for the Economic Crisis’ (March 2009)

TUC report: ‘Women and Recession’ (January 2009)

Prowess Society website. The Prowess Society supports women’s business and enterprise. Their website has a number of articles, reports and links. The March 2009 e-zine in particular has a number of articles dealing with women and the recession.

‘Real Help Now for Women’ UK Government summary of support services available to women considering starting a business, as well more general information on coping with work and family issues. Download from the Government’s Real Help Now website which offers advice and support to businesses and individuals struggling with the impacts of recession.

Statistics for Scotland relating to women and gender equalities

Contributed by Susan Kruse (W@W Website Co-ordinator)