Women Hurt Worse by Economic Downturn?

In this bad economy, people are getting used to certain truths. Among them, gas prices are up, economic growth is down, and unemployment is on the rise. According to the newest statistics released by the U.S. Department of Labor (DOL) for June 2008, the unemployment rate, which had been declining in recent months, held steady at 5.5% nationwide, while the economy as a whole lost 62,000 non-farm jobs, particularly in construction, manufacturing, and employment services. The financial sector, in light of continued multi-billion dollar write-downs of bad debt, has been increasingly vulnerable to another round of layoffs.

Rising unemployment and inflation are hitting hard across all sectors, and white-collar professionals in real estate and finance are far from immune. However, are women in the workforce being disproportionately affected by this economic downturn? That’s the thesis of an article in yesterday’s New York Times, entitled “Poor Economy Slows Women in the Workplace.”

The article notes that the trend of women increasing their representation in the workforce since the 1960s has been reversing in the last decade, and will likely continue to accelerate in the future, as the economy sheds jobs at an alarming rate. Indeed, according to DOL statistics, this is the first time that the percentage of women at work has fallen.

According to a Congressional study due out Tuesday, the root cause of this is not women opting out of their jobs to raise children, as previously thought, but the impacts of the economic downturn. As Heather Boushey, a senior economist at the Joint Economic Committee of Congress, explained in the article, “When we saw women starting to drop out in the early part of this decade, we thought it was the motherhood movement, women staying home to raise their kids. We did not think it was the economy, but when we looked into it, we realized that it was.”

This article emphasizes the struggle of women working in manufacturing and low wage jobs, many of whom had participated in welfare to work programs in the 1990s, only to lose their jobs recently when their employers cut payrolls in an effort to counteract falling profits. However, the same concerns affect professional women with advanced degrees and hefty private sector paychecks, and the data shows that the job loss is consistent among women who are married and unmarried, with children or without, and across the economic and educational strata.

The percentage of women employed from the ages of 25 to 54, peaked at 74.9 percent in early 2000. In June 2008, it was 72.7 percent, “a seemingly small decline, but those 2.2 percentage points erase more than 12 years of gains for women.” If the growth had continued at the previous rate, then 4 million unemployed women would still be working. Additionally, median pay has fallen in recent years, to $14.84 an hour in 2007 down from $15.04 in 2004, according to a study by the Economic Policy Institute.

The same DOL data shows that, since 1975, unemployment among female heads of household has been growing, and now outstrips unemployment for women overall. This is bad news for single mothers whose income provides the only source of support for their families.

However, the verdict is split on whether women are suffering more from unemployment during this period of economic crisis. In a recent speech at the 2008 Business and Professional Women’s Leadership Summit, U.S. Secretary of Labor Elaine Chao noted than women have slightly lower unemployment rates than men overall, and attributed this to the increasing numbers of women who pursue advanced degrees.

Another Bureau of Labor and Statistics Household survey found that, in the last year, American women have gained 912,000 jobs while American men have lost 268,000. A blogger at the Shamanic Economist attributes this disparity to several interesting factors, including arguing that:

• The wage disparity works against men in tough economic times, as employers trim the higher paying employees first, and would rather employ people who can be paid less (read 70 cents on the dollar) for the same work.

• Construction sector has taken a big hit, and most jobs here are held by men. Similarly, nursing as a profession has been on the rise, adding more jobs for women.

• Demographic trends: Many women of retirement age have never held jobs, while the new generation of women in the workforce has always expected to work, so there are fewer women seeking jobs that are unable to find them.

• Finally, veterans coming back from the wars in Afghanistan and Iraq (mostly male) have a hard time finding civilian jobs due to injuries and post-traumatic stress disorders.

While some of these factors might be a logical stretch, and have not been conclusively demonstrated to have a significant macroeconomic effect, they are at least food for thought. So, what do you think? Are women being hurt more or less than men by the current economic downturn, in terms of unemployment? Do you think companies are more likely to let go female employees, such as those on flex-time or out on maternity leave, or do you think they fear discrimination lawsuits and so shy away from doing so? We want to hear your thoughts.