National Post (Latest Edition)

The myth of a ‘she-cession’

- Philip Cross Financial Post Philip Cross is a senior fellow at the Macdonald- Laurier Institute.

Armine Yalnizyan of the Atkinson Foundation has been supersprea­ding the idea that the distinctiv­e feature of the 2020 recession is its disproport­ionate impact on women. She maintains that, with its devastatin­g hit on service industries, the pandemic has caused greater job losses for women than men, thus creating Canada’s first “she- cession,” in which women have borne the brunt of the downturn. She has also argued that the recovery has been hampered by women not being able to return to the labour force because they have to care for children. Universal daycare, she says, would be a “magic bullet” that would speed up the recovery.

A close examinatio­n of the facts reveals major holes in these arguments. To start with, the recession affected men and women almost equally. Between February and August 535,000 men and 562,000 women lost their jobs, as shown in the accompanyi­ng graph. Women fared slightly worse during the closing of the economy between February and April ( losing 1.536 million jobs versus 1.467 million for men) but they also recovered slightly faster between April and August (with 974,000 women getting jobs versus 932,000 men).

What is exceptiona­l about this recession is, not that women’s employment fell slightly faster than men’s, but that both fell off a cliff. At the depth of the financial crisis in 2009, monthly employment fell by 125,000 in January — at the time a shockingly large number. But in March of this year Canada lost one million jobs. In April, it lost another two million — 16 times more than in January 2009. Twice as many jobs were lost in these two months than in all of Canada’s recessions since 1976 combined. That should be the exclusive focus of anyone’s analysis, not parsing out statistica­lly insignific­ant difference­s between men and women.

Faced with such bleak job prospects and receiving generous government support payments that reduced the urgency to look for work, both men and women withdrew from the labour force. At the depth of the recession in April, the labour force participat­ion rates for men and women had each declined at the same rate. As job prospects improved over the summer, the rate for men did rise slightly faster than that for women though neither has fully recovered. Clearly, some of the decline in labour force participat­ion reflected forces that have affected both men and women. Even if all of the slightly larger 0.9 percentage point overall decline in female labour force participat­ion since February was attributab­le to a lack of daycare, that still accounts for only 86,500 ( or 15.4 per cent) of the 562,000 women who have not regained their jobs.

What is keeping women from returning to work is the same lack of demand that is depressing employment for men. Without a better recovery of demand, improved daycare will make little difference. Without a job to return to, parents don’t need daycare for their children. There may very well be good reasons to try to improve daycare in Canada, but its being a “magic bullet” to boost the recovery is not one of them.

The parallel track of male and female employment for most of 2020 is not surprising. The fortunes of the industries in which men and women work have been similar — despite the fact that they mostly work in quite different industries. For example, in 2019 just over half of working women were employed in four sectors: health care, wholesale and retail trade, education, and accommodat­ion and food. At the same time, just under half of men worked in four industries: wholesale and retail trade, constructi­on, manufactur­ing, and profession­al services. Between February and August of 2020, the four industries that employ the most women saw a recovery of 70.3 per cent of their job losses; for the four largest employers of men, the recovery rate was 73.0 per cent — basically the same. What this shows is that the major source of ongoing job losses for women was the same as for men: a catastroph­ic decline in demand, not a lack of daycare.

Whether in aggregate or industry by industry, there is little to differenti­ate the terrible losses that both men and women have suffered this year. To single out one group as having experience­d exceptiona­l hardship highlights the pitfalls of identity politics and how easily they lead to policies that put longheld political goals above the rehabilita­tion of a stricken economy facing a second wave of the pandemic — a wave that may prove fatal to many businesses already struggling to survive without much help from poorly- designed government support programs.

The 2020 recession was the economic equivalent of a thermonucl­ear device. Like a modern nuclear bomb that exceeds the combined power of all convention­al bombs dropped in the Second World War, the job loss in just one month of 2020 exceeded the combined losses in the past three major recessions. Fostering a recovery from such a devastatin­g loss should be the single- minded focus of policy- makers, not catering to particular segments of the labour force or electorate. Such fine- tuning is a luxury for after a broadbased recovery is underway and federal finances are again under control.

the major source of ongoing job losses for women was the same as for men: a catastroph­ic decline in demand.

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