New research suggests that young women face a double whammy of financial difficulty because of the global pandemic affecting jobs.

Being a young woman working in the Melbourne beauty industry is really tough right now.

“I thought that maybe we would see a war in my lifetime but not a global pandemic,” says 20-year-old beauty therapist Ella Akers.

Like many Australians, Ella had to stop working once the Federal Government’s industry shutdowns were introduced in late March and because her line of work has been highly affected by isolation measures, she’s used up all her life’s savings just to stay afloat.

 


“I even tried to talk to my parents about what we should do next, but they don’t know because they haven’t seen anything like this before either,” says Ella.

From a job perspective, young females have been among the most adversely affected by the impact of the coronavirus.

According to fortnightly payroll data released by the Australian Tax Office and the Australian Bureau of Statistics (ABS), between 14 March and 27 June, women under the age of 20 have lost 9% of jobs compared with 5% for men1.

“After seeing the female participation rate increase steadily over the past five years, the COVID-19 pandemic has led to it falling to its lowest levels in around 14 years,” says Diana Mousina, Senior Economist at AMP Capital.

“The male participation rate has also fallen as a result of COVID-19, but female participation has fallen by more. The COVID-19 pandemic is likely to lead to worsening inequality between males and females in the workplace because females make up a larger share of service-based jobs.”

The focus on younger Australians is extremely important now as our inability to shake off a global pandemic, particularly as it re-emerges in Victoria, pushes Australia well into its first recession since 1992.

For millennials it’s especially tough and they could be the unluckiest generation ever in a financial sense, particularly when you consider the already high cost of buying property in most Australian cities.

According to Ernst & Young (EY) analysis of census data from the ABS, the majority of a person’s lifetime income growth occurs in the first 10 years after they enter the workforce.

So, if you’re a 20-something Melbournian like Ella, this would normally put you in the sweet spot for seeing your income rise by 133 %over the next decade.

But these aren’t normal times, even for those who are already employed; recessions hurt the hip pocket and tend to materialise in lower wages growth and fewer job opportunities.

EY modelling suggests that this recession could result in a 9% drop in income growth for the average 21-year-old over the next decade.

On top of that, being female means that Ella faces a double whammy of lost income and superannuation, if at some time in the next decade she decides to take a career break or reduce her paid working hours to have children.

“It’s the not knowing and my unstable financial position that are pretty scary to deal with,” says Ella.

“It has definitely affected my mental health. I see a psychologist regularly anyway but even though I don’t have work right now I have been trying to keep that going.

“I’ve done that twice while in isolation and that’s really helped me to make sense of the world.

“I live in a house with three other people. First my fiancé lost her job in hospitality and she is still trying to get Centrelink.

My other housemate has also lost her job in hospitality and she is just starting to get Centrelink payments now. And her boyfriend, who works in construction, was having to pay for her portion of the rent for a while,” she says.

Since March, Ella’s work has been unstable and even obtaining government assistance has been a bit of a challenge.

“Before coronavirus struck, I was working four days a week earning about $500 to $600 a week but once my work had to shut down, I was without an income for a month and was trying to sort out Youth Allowance through Centrelink.

“That was difficult because the first two payments were incorrect and were half of what they should have been – so that was $1,000 to live off for the month, and if I hadn’t had any savings, I wouldn’t have been able to afford my $120 per week rent.

“My partner and I had been saving up to go around Australia in a campervan but all of that has been spent now on rent, doctors’ appointments and groceries. It did take a while for us to get Centrelink payments,” says Ella.

Ella’s experience during the coronavirus crisis highlights the benefit of having some money put away for a rainy day so you’re not caught short if something happens. Building an emergency fund – when you’re able to - could help you cope if you need instant access to money for those times life throws you a curve ball.

Bianca Hartge-Hazelman is a columnist on women's money matters and is the founding publisher of Financy and the Financy Women's Index. This article represents the views of the author only.


 

1. Weekly Payroll Jobs and Wages in Australia - Payroll jobs index

COVID-19: My cash is starting to run out

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