Women in the Workforce

December 9, 2011

The recent Labor Department jobs numbers were encouraging on a number of levels.  We saw the unemployment figure fall to 8.6% and companies add 120,000 jobs last month (according to a separate employer survey).  Yet, buried beneath that sunny figure (and unearthed by many commentators in the hours after the numbers were released) was the finding that 315,000  people had dropped out of the labor force.

Even less recognized was the fact that nearly all of those who left the workforce were female.   Why?  Catherine Rampbell at The New York Times explains:

"During the recession, which technically lasted from December 2007 to June 2009, some men dropped out of the labor force, and many times more women joined it. Many of these new female workers were probably stepping up as breadwinners when their husbands were laid off. During the recovery, which extends from June 2009 to the present, both men and women have dropped out of the labor force, but many more women have dropped out than men. Probably female dropouts have exceeded male dropouts lately because state and local government layoffs have disproportionately hit women. And as those women are laid off, they may become too discouraged by the sorry job market to even apply for new positions."

Men bore the brunt of the layoffs from 2008 to roughly January of 2010, so much so that by October of 2009 women made up 49.9% of the American workforce (the highest share ever).  For the first time ever, more women earned doctoral degrees in 2009 than men, after having also gained a majority of the bachelor's and master's degrees granted.

Then something strange happened.  Starting in the first few months of 2010, male employment rates picked right back up, while female hiring remained largely stagnant.  As Jordan Weissmann noted in The Atlantic, "Men have regained about a third of the jobs they shed in the recession. Women have only regained about one in five." Public sector employment figures likely explain the bulk of this trend.  Women make up about three-quarters of the workforce in the health care and education sectors.

Those sectors stayed strong in the first years of the recession, and the Bureau of Labor Statistics (BLS) projects relatively strong jobs growth between now and 2018.  What BLS hasn't necessarily accounted for is the shrinking of public sector budgets in the coming years, which would (and is) disproportionately affecting these very sectors.  In fact, just last month, state and local governments shed 16,000 jobs.

As the Great Recession stretches on in years, this apparently two-track recovery in employment is worrying.  We will need to keep an eye on employment figures in the coming months to see whether this gender gap persists, especially with the critical role that women play in spurring entrepreneurship.