Friday, May 24, 2024

Caretaking demands often put working women at a financial and workplace disadvantage. Can gig work and the care economy help?

To better understand how working women and mothers carry more of society's caretaking burdens, hampr looked at the financial and social differences of women and men in the workplace.

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Mom with a baby drinking coffee while working at home with a laptop

filadendron // Canva

More mothers with young children are working than ever before, but our current system puts them at a disadvantage. Between the gender pay gap, biases against mothers who work outside of the home, and non-mandated paid maternity leave, women have a steep hill to climb. 

Enter gig work and the care economy. 

Here, we're going to do a deep dive into what the gig and care economy is, the struggles of mothers in the workplace, balancing work and home life, and how mothers can earn extra money and save time by doing gig work in the care economy. 

The gig economy in 2024

You've probably heard the term "gig economy" or "gig work," especially in the last few years. If not, no worries. In this report, hampr explores the care economy and working mothers, in addition to the gig economy. 

The gig economy refers to people who don't work a traditional 9-to-5 job. Companies will outsource work to independent contractors or freelancers instead of hiring a full-time employee. This benefits companies because hiring new people is expensive in terms of salary and benefits. Plus, the shorter contracts can make it more budget-friendly for smaller businesses. It can also be great for  contractors because they can work flexibly. They're able to pick their work according to their schedule and bandwidth. 

Gig work has been steadily on the rise for the last 10 years but really jumped up in 2020 with the COVID-19 pandemic. As remote work became even more accessible, more people began opting for freelance work. From 2019 through the end of 2023, 7 million more people became engaged with freelance work. In fact, as of 2023, nearly half of millennials report doing some type of freelance work. 

So why is that relevant? Well, millennials also make up the majority of new mothers. These new mothers supporting their families with gig work will likely continue to increase each year. As the prices for basic necessities continue to rise disproportionately to wage increases, more and more people are turning to gig work to bring in some extra money. Families are becoming less able to live on a single income. This is pushing more mothers with young children into the workforce than ever before – but more on that later.

Care economy 101

Now that we've gone through the basics of the gig economy and freelance work, let's talk about the lesser-known care economy. In broad terms, the care economy includes all the labor (paid and unpaid) that goes into caring for babies and children, the elderly, and people with disabilities. It is also defined as the money spent on loved ones from their first breath to their last. The care economy is typically broken down into four different categories. These are infant and child care, household management, non-home long-term care, and home-based care. It's estimated that caregivers provide almost a trillion dollars of free labor every year. Yes, that's a trillion with a T. 

Further complicating the issue, caretaking is an incredibly unpredictable task. While the caretaking needs of children are fairly easy to foresee and gradually decrease over the years, caretaking for the elderly or ill is much less predictable. You can't always plan ahead or schedule in advance when it comes to caring for your aging parents. Being unable to anticipate what their needs will be on a daily basis creates a lot of uncertainty and makes it difficult to keep a regular 9-to-5 type of job. For those in the "sandwich generation," this is compounded by the difficulties of caring for children and aging parents at the same time.

The Boston Consulting Group estimates that by 2030, the U.S. will lose $290 billion per year in GDP (Gross Domestic Product, or a measure of economic activity) if the care economy is not addressed. One of the most prominent issues in the care economy is balancing the cost of hiring well-qualified people and providing the services at an affordable price. The best, most educated people don't come cheap, nor should they. However, this leads to the services they provide being too expensive for the average American family to afford. 

In addition to all that, a staggering 96.5% of childcare and 86% of home healthcare businesses are owned by women. Women of color own half of those childcare businesses. Women and minorities are less likely to have the money to start a business on their own and will need a loan to get these businesses off the ground. The issue here is women and people of color are less likely to be approved for a small business loan. If approved, they often have higher interest rates than their male counterparts.

Without getting too far into the weeds here, the government could make a significant impact by stepping in and helping alleviate this issue. By providing subsidies and assistance for businesses that offer caretaking services, they will be able to keep their prices affordable. This, in turn, will allow more women to return to the workforce and keep caretaking jobs attractive to well-qualified people. 

Women are disproportionately affected by the lack of a care economy in the country. Women start most care economy businesses but are less likely to be approved for loans. Without government subsidies, care economy businesses can't hire qualified people and provide affordable services.

Mothers in the workplace

Women with young children (under the age of 5) are returning to the workforce at an unprecedented rate. As of June 2023, 70.4% of mothers with young children were working. This is a more than a 10% increase since 1990. Almost 2% of that increase has been post-pandemic. While that might not sound like a lot, it's significant in terms of workforce participation. This comes at a cost. Since there are next to zero government programs for working families, the cost of full-time childcare can take a considerable amount of their monthly income. According to the Department of Health and Human Services (HHS), childcare is considered "affordable" if it costs 7% or less of the family's monthly income. However, parents are spending 10%-15% (sometimes more) of their income on childcare. This is by definition unaffordable. 

Maternity, unpaid, and paid leaves

The U.S. does not mandate paid maternity leave, so if your employer is one of the 76% of private sector businesses that don't offer it, you're stuck with unpaid leave. Only 27% of people working in the private sector have access to paid maternity leave, and 90% have access to unpaid leave. Yes, this means that 10% of the population has no access to any leave if they have a baby. Due to a lack of requirements for employers to provide paid maternity leave, many mothers (and fathers) are forced to go back to work within weeks of having a new baby. 

This is disproportionately impacting women as they are more likely to take on the role of primary caregiver in opposite-sex relationships. Women spend more time on average per day with young children than men do. Up to 80% of caregivers, paid and unpaid, are women. Even in heterosexual couples where both people work full-time, women spend 40% more time on caregiving tasks than their male counterparts. This includes those who care for children, the elderly, people with disabilities, and sick family members. On average, women lose about $295,000 of income over time, due to being a caregiver. Women's lifetime earning potential is lowered by 15% on average as a result of being a caretaker. Keep in mind these numbers are conservative, so it may be significantly more for some families.  

How this impacts women

As of 2022, women still only earn $0.82 for every dollar a man makes doing the same work. The level of education doesn't change this number either. Even college-educated women make less than their male peers. Why is this still an issue? A contributing factor (but not the only one) is motherhood. Between the cost of quality childcare and lack of paid leave, many women who want to continue working must hit pause on their careers to raise their children. 

While the current economy makes it increasingly difficult to support a family on a single income, working mothers experience some other benefits (in addition to the extra money in the bank). Women who work part-time or full-time report having better health and less depression than those who stay home full-time. In the same study, women who work part-time were found to be just as involved in their children's lives as stay-at-home moms. They're more likely to provide learning opportunities at home. They're also more sensitive to their children than those who stay at home or work full-time. Overall, everyone benefits from mothers working in some capacity. So why does the country, culture, and economy make it so difficult for them?

Motherhood penalty and fatherhood premium

This goes even deeper than you might think. Traditional gender roles continue to keep Americans in a chokehold. When a woman has a family, her company or boss often sees this as a hindrance or a negative thing. However, the opposite is true for men. This phenomenon is known as the motherhood penalty and the fatherhood premium. The motherhood penalty refers to an inherent bias against hiring mothers. Whether the hiring party is even aware of this, mothers have a harder time finding well-paying jobs as they are perceived as being less committed and capable. Employers are more likely to trust women who become mothers after they are hired, but changing companies can be difficult. 

On the other hand, fathers earn more than mothers and men or women without children. This can really be boiled down to a very American mindset: capitalism. While this is undoubtedly an issue worldwide, compared to other similarly developed countries, America doesn't score very well on the gender equality index. In 2023, America was #43 out of 146 on the list of most gender-equitable countries. Combine this with capitalism, and you get the fatherhood pay premium. Fathers are more likely to get bonuses, make more money, and have an easier time getting new jobs than women (with or without children) or men without children. This further increases the gender pay gap. This pay discrepancy also compounds the number of children a family has. A woman with three or more children is severely disadvantaged, whereas men with the same amount of children are more likely to earn even more money.  

Balancing work and home life

Ok, so we've established that childcare responsibilities disproportionately impact women. Women are far more likely to be considered the primary caretakers. Thus, they're more likely to have to put their careers on the back burner for their children. The idea of "balancing" work and home life has been around for quite some time, but what does that even mean? More importantly, when was the last time a man was asked how he balances work and home? Probably never. As shown earlier in this article, women bear the bulk of domestic responsibilities as well as childcare duties. This can lead to women becoming burned out rapidly trying to handle all their work and manage the household. Guilt, feelings of inadequacy, and feeling overwhelmed can set in quickly under these circumstances. How can we make this better?

The first step is to get some help. If both parents work full-time, household responsibilities should be split down the middle. Write down a list of all the daily, weekly, monthly, and yearly household tasks that need to be done and delegate. This is not novel information but bears repeating. Men are just as capable as women at childcare, laundry, cleaning, cooking, and so on. Just because you are a woman doesn't mean it's your sole responsibility to handle these tasks. Find affordable solutions to outsource some of these tasks so you both have more time to spend with your children and relax. 

The second step is to make a list and be kind to yourself. Take your half of the household responsibilities list and break it down into a manageable schedule for yourself. Don't forget to schedule time to relax; you deserve it. Don't put yourself down if you fall behind or miss a daily task. If your house is a little dusty this week, so be it. Just take it one step at a time and give yourself grace. Take time to focus on things you love and enjoy, whether that's hiking, crafting, gaming, or just sitting in silence. Be sure to prioritize your mental health, hobbies, and interests too. 

Disclaimer: There is little research done on non-binary people in this area. For this article, the focus is on heterosexual, cisgender couples. This is not to be discriminatory or non-inclusive, but simply because it's difficult to find information on these topics for LGBTQ+ people in the United States.