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Environmental Social Governance (ESG)

Home is where our heart is: our great potential after this crisis

By AMP Capital

Crisis draws out the truest representation of a person’s character, and the same can be said for national spirit and collective consciousness. For all of the progress we celebrate and public support we witness for gender equality, COVID-19 has forced us to realise what we first saw with such clarity in the world wars: households are the backbone to our nation, and women keep them running. The difference between now and then? We have a huge opportunity to use that knowledge and not let history repeat itself.

There is a great deal of opportunity in a crisis to see the world with perfect vision. In advanced economies, where distraction is in the fabric of our infrastructure, we rarely have that chance. We have normalised a bombardment of information, we pick up our phones on average 58 times a day1  (often without purpose) and while search engines give us the guise of control, we’re effectively wading through masses of marketing trying to capture our eyeballs2 .

Those opportunities came for Australia during the world wars, when we saw with clarity that a functioning home front is just as important as the frontline for our people. Australian women managed the consequences of these battles for households nationwide – raising children alone, taking on family and financial responsibilities, working around resource shortages, and dealing with trauma and anxiety. The role of women as the nation’s carers is widely regarded as critical to the wartime efforts3.

We also realised an obvious truth during the wars as women upped their workforce participation: it makes good economic sense to have a gender diverse national workforce. The wars are often credited as the impetus to opening the workforce, and “man’s work,” to women. In all, 200,000 women joined the workforce during WWII alone, increasing female workforce participation by 31 per cent between 1939 and 1943, and forever transforming the role of women in Australian society4. Though we’ve got a long way to go for equality in representation and pay, we’ve seen progress ever since in workforce numbers.

Now, with a national crisis on our hands, we again have the clarity of vision and priority that existential threat can bring. The household is again holding its rightful mantle as our backbone, and is at the centre of Australia’s success story in controlling COVID-19 so far. Without most of the nation being able to work from home, be schooled from home and cared for at home, we would not have been able to follow physical distancing protocols. In short: we are reminded our fundamental protections in life, when push comes to shove, are in our households.

The pandemic has also served to compound and spotlight a gender divide we haven’t successfully tackled since the world wars. While we’ve had progress on gender representation in the workforce, the progress on the home front is nowhere near as significant. Now, women are carrying the “triple load” of working, running a household, and worrying about both5. It’s important to note here that the prevalence of domestic violence in Australia means some women are also facing these challenges with compromised personal safety, which further exacerbates rates of anxiety and post-traumatic stress disorder6.

In Australia, women spend 64.4% of their average working hours each week on unpaid work compared to 36.1% for men. Though figures aren’t conclusive for this period, it’s fair to assume this is a huge improvement on the war and post war period, and there are studies7  which cite generational change is manifesting (albeit slowly). Still, based on evidence that women take on the bulk of care (including childcare) responsibilities, including with dual-income couples, it’s likely that women have been largely responsible for home schooling and care of any dependents during COVID-198. Throughout this period, women have also felt increased personal and professional pressure - a national poll has found that women remain one of the groups most concerned about COVID-19 in Australia, as they manage their increased unpaid care responsibilities at home with their paid responsibilities at work.9

Just as we saw equal workforce participation as an opportunity for Australia, we have a chance now to see equality at home in a similar light, at a time when the inequality is blatant. It is here where we should better understand the economic potential of the household. It can be conflated with leisure, with rest, with ‘softer’ elements of human life – but it’s far from it. As it is defined by economists, ‘household production,’ or unpaid care work, increases the productivity of the individual. Think of the acts that get a person ready and able to work and participate in society – washing clothes, preparing food – the home is a staging area for that. As a consequence, care work substantively contributes to economic activity of the individual and the country as a whole. The monetary value of unpaid care work in Australia has been estimated to be $650.1 billion, the equivalent to 50.6% of GDP (though it is not included in GDP calculations).10

With an appreciation that the role of the household is inextricably linked to the health of our nation, we can move forward with structures and policies that support its proper functioning. An example recognised by many workplaces as an enabler to productivity is flexible working, which is sympathetic to the needs of a household. WGEA data indicates 70% of workplaces have a formal policy in place to support flexible work – but at the moment, they’re mostly used by women.11  With a glass half full approach to these realities, we can see the potential at our fingertips.

Striving for equality is fundamentally the right thing to do. What we are being reminded again now is it’s also of enormous benefit to our economy and to our people. Surely, it shouldn’t take another crisis for us to strike the right balance, and understand the untapped economic potential there is in supporting stronger and fairer household dynamics, just as the nation needs it most.

  • Economics & Markets
  • Equities
  • Equity
  • Growth
  • Listed
  • Opinion
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Important notes

While every care has been taken in the preparation of this article, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455)  (AMP Capital) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided and must not be provided to any other person or entity without the express written consent of AMP Capital.

 

This article is not intended for distribution or use in any jurisdiction where it would be contrary to applicable laws, regulations or directives and does not constitute a recommendation, offer, solicitation or invitation to invest.

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