Bailout and Current Economic Crisis May Have Disproportionate Impact on Women

by Erin Abrams and Pamela Weinsaft (New York City)

“There is growing concern among some about whether the Bailout Plan was hammered out too quickly without sufficient guarantees to taxpayers and accountability,” remarked Linda Basch, Ph.D., President of the National Council for Research on Women. She joins an increasing number of experts on women’s economic participation who think that the recently-approved bailout plan might have disproportionately impact working women. “We hope that Congress will go back to the drawing board and come up with a viable plan in a way that will boost the economy and restore market confidence,” she continued.

Basch expects the economic downturn will hit poor women and single women-headed households the hardest as women-headed households make up 28.7% of families living in poverty, compared with 13.0 for households headed by single men. Women are also more likely to be hit harder by the recession and economic instability because they have higher levels of poverty and unemployment, and smaller retirement and pension funds than men. Thus, many women from all walks of life find themselves facing foreclosure, and the government bailout plan does little to address their concerns.

Sara K. Gould, President and CEO of the Ms. Foundation and an expert on women’s economic development also warns that the plummeting U.S. economy will further threaten millions of women who already live with significant financial instability. “Even at the beginning of the economic downturn, more women than men, and more African Americans and Latinos than whites, were caught in the sub-prime mortgage trap,” explained Ms. Gould. “Now that the crisis has escalated, we must expect that the negative repercussions for women—especially women of color—will escalate as well.”

But it’s not just poor women who are affected by the economic downturn. According to Ms. Gould, “Taking into account longstanding pay inequities, insidious barriers to employment, record levels of inflation and ever-increasing childcare expenses, women and their families are struggling to keep up and get by.” This includes many highly educated professional women in the middle or upper middle classes, whose income was needed to keep their two-earner families afloat.

Says one female attorney, “My husband works in finance and I work at a big law firm. Both of us depend on our year-end bonuses to cover the costs of a live-in nanny. It’s the only way we can both keep our jobs and our sanity. But with the economy how it is this year, we are both worried that cutbacks in bonuses will mean that we can no longer afford our live-in child care.”

Among the thousands of Wall Streeters losing their jobs are women who fought for respect in the testosterone-fueled arenas of financial analysis or investment banking. For those women in finance, business and law who planned to on-ramp this year, the job market is looking a bit dismal at the moment. Add the women who were temporarily out of the work force in the last year or so, perhaps on maternity leave or to spend more time with small children, and the field is downright saturated with qualified women in a market where positions are likely to be disappearing.

As firms cut back on extras and benefits to stay afloat, many families will have a harder time making ends meet. As a result, women in super-charged professions may feel extra pressure to work long hours and take on extra projects in order to “earn their keep.” Many women with children pondering a switch to flex time have shelved those plans, and are just glad to still be working. In some cases, pregnant women question whether they should take their whole maternity leave, for fear that their jobs will be gone when they get back.

And they seem to have some good reason to be concerned. According to statistics compiled by the U.S. Department of Labor (as reported on Women’s eNews.com), in the last two years, more than 200,000 women have left jobs in the financial sector of the economy, but the number of men employed in such jobs has remained stable. Vicky Lovell, director of employment and work-life programs at the Institute for Women’s Policy Research, a think tank in Washington, D.C., notes that the bulk of those laid off in the sector have been women. Lovell says “It’s bad news all around for women. I don’t see anybody predicting that there’s a way out of this that’s going to be good for consumers or taxpayers in general, or for women.”

When the high-earner at the top loses their income, it causes a domino effect negatively impacting those who provide goods and services to the high-earner. It seems that, like the wage gap, women will bear the disproportionate impact of this bailout and economic crisis, whether they are at the top or towards the bottom of the income chain.