Why female stay-home professionals lose out financially in the long term

When a couple has one or more children, the parents often decide to live on a single income so one parent can stay home and care for the kids. The move isn’t surprising considering the fact that the cost of childcare can exceed 95% of a single parent’s income. What’s more, young children can certainly benefit from having a parent’s care and attention during their early years. However, many couples don’t realize there are hidden long-term financial implications that can have a financial impact on their family for decades when a parent leaves the workplace for an extended period of time.

The stay-at-home burden 

In the overwhelming majority of cases, it’s female professionals who bear the brunt of the decision to have one parent stay home to care for the children. Stay-at-home moms outnumber stay-at-home dads by nearly four to one. The gap became even more pronounced during the pandemic. For example, the shuttering of schools and daycares throughout California forced many women to stay home to care for young children or to supervise virtual learning for older children who would otherwise attend school. As of April 2020, about 2 million women dropped out of the workforce due to the COVID-19 pandemic, as opposed to 1.6 million men.

The barriers to re-entering the workforce

The women who opt — or have been forced by circumstances — to stay home to care for children often find it difficult or even impossible to re-enter the workplace. Companies may be hesitant to hire women who haven’t kept up with the industry. Some bosses may worry about hiring mothers who may need to take a break at a later date in order to care for children or other family members. It could take much longer than anticipated for a woman who has taken a break from work to get back into her chosen industry.

The challenges of advancing a career

Additionally, women who are able to restart their careers after taking a break to care for children may find it difficult to advance in their careers. They may have to restart their careers with a lower-level job than the one they originally held. They could be passed over for managerial positions if a boss worries that a working mother may not be able to devote her full time and efforts to the company. This perpetuates the wage gap as statistics clearly show that a mother’s income can decline by as much as 40% after a child or two. It’s no wonder researchers have called the downward income trend the “motherhood penalty,” and it’s certain to impact a family’s long-term financial goals as a couple struggles to put money aside for retirement, buy a house, deal with unexpected medical expenses, and save up for a child’s college expenses.

The lack of women in many industries also impacts women’s ability to shatter the glass ceiling and become all they can be. At present, women hold fewer than 50% of managerial positions in California. Fewer than 33% of CEO positions and STEM-related jobs are held by women. While the Golden State has long led the way in empowering working mothers to return to the workplace, there is a long way to go to achieve workplace equality and the COVID-19 pandemic has certainly set female professionals back as a decrease in the number of daycares throughout the state puts a strain on women who may want to return to work but can’t.

The overlooked costs 

At the same time, mothers who put their careers on pause aren’t the only ones who lose out. Diversity in the workplace benefits companies of all sizes and industries. It can boost a company’s reputation, increase its customer base, improves profitability, lower turnover, and enable teams to solve problems as teammates from different walks of life approach the problem from various angles to find the best solution. Mothers, in particular, have an amazing ability to multitask, possess superior emotional skills that come in handy when working with colleagues or managing a team, and have the persistence needed to overcome even the most difficult problems. Moreover, statistics show a clear connection between higher female labor force participation and higher median wages for men and women alike. A mother’s inability to return to work in a timely manner can impact not only her future earnings but also her spouse’s.

Helping women return to the workplace

Women Back to Work is the only returner organization nationwide that helps women get back into the tech industry. Our mission is dedicated to creating pathways and matching companies with women who have taken a career break and are now ready to return to the labor force.