- The Center for American Progress (CAP) has created a calculator to show you exactly how much money you stand to lose by taking time out from work.
- Alongside loss of salary, those leaving employment lose potential wage growth, retirement savings, and other Social Security benefits.
- A 30-year old woman on a $50,000 annual salary could lose $287,000 in total from taking two years out of work, the tool suggests.
- Those who leave employment to care for children or other relatives are traditionally women, who have already been hit badly by job losses amid the pandemic.
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A calculator developed by the Center for American Progress (CAP) shows you exactly how much money you stand to lose by quitting your job during the pandemic – something many people, particularly women, are considering as the coronavirus crisis strains their time, caring responsibilities, and mental health.
CAP originally created the tool to show parents how much money they would lose by leaving employment to focus on childcare. Leaving your job costs much more than just your annual salary because of additional benefits that have to be forgone, the calculator shows.
For example, a 30-year old woman on a $50,000 annual salary who has been working full-time for eight years stands to lose $287,000 over two years by quitting her job, the tool suggests.
“The cost of this decision follows [workers] for life,” CAP said.
Fortune first reported on the tool.
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When the loss of salary is combined with the lack of potential wage growth and lost retirement savings, a person who leaves the workforce can forgo up to four times their annual salary each year, CAP's research showed.
A 30-year old woman on a $50,000 annual salary who has been working full-time for eight years would lose $100,000 in wages if she took two years out of work. But she would lose a further $100,000 in potential wage growth and $87,000 in retirement savings and Social Security benefits, the tool shows, putting the total loss for those two years out at $287,000.
Those who leave employment to care for children or other relatives are traditionally women, who have already been hit badly by job losses amid the pandemic.
During the economic downturn that started in February 2020, American women have lost jobs at a higher rate than men for the first time since 1964, and the proportion of women in employment has fallen to the lowest level since 1986.
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"Working women are at the intersection of the two largest economic shocks of 2020," Michael Madowitz, one of the creators of the calculator, wrote in an October article for CAP co-authored by Diana Boesch.
Women of color in particular are overrepresented in the occupations that have suffered the most job losses, the authors added.
"Whether it's the push of job loss, the pull of care at home, or both, US policy failures in 2020 risk a lost generation of women's careers," Boesch and Madowitz wrote.
In late December, the US House of Representatives passed a bill to increase the $600 stimulus checks to $2,000 in a vote with a roughly two-thirds majority, but the Senate has blocked the larger checks four times.
Unemployment continues to affect millions of Americans, as the economy suffers through waves of lockdowns while COVID-19 cases rise.
"It's darkest before the dawn, and we're likely to lose ground again before we actually are able to fully reopen the economy with herd immunity and a vaccine," Diane Swonk, the chief economist at Grant Thornton, told Insider's Ben Winck and Juliana Kaplan.