The Current State of Women’s Economic Well-Being is in Jeopardy
By Julie Kohler, Stephanie Odiase, and Jessica Forden
In less than a year, the U.S. erased more than 30 years of women’s employment gains.
The COVID-19 pandemic triggered an economic crisis that has been disastrous for women. Women’s rates of paid employment have plummeted. As of June 2021, there were still 3.4 million women who had lost jobs since February 2020 and had not found new employment. Despite overall growth, women’s labor force participation rates remain at their lowest level since 1988.
The economic crisis has exacerbated longstanding racial, gender, and class inequities. Black and Latinx women have disproportionately suffered job losses, which have been concentrated in the hard-hit service, hospitality, and retail sectors. As of June 2021, unemployment rates among Black, Latinx, and Asian American women were at 8.5, 7.9, and 5.3%, respectively — 1 to 1.6 times those of white men.
Women workers who are caregivers to young children have been pushed out of the paid labor force as a result of pandemic-induced school and child care closures — and have been slow to return to the labor force. During the pandemic, women were three times more likely than men to be not working as a result of child care challenges.
The potential short- and long-term consequences of this crisis, which has been popularly termed a “she-cession,” are dire. During the pandemic, women were more likely than men not to have enough to eat, and Black, Latinx, and Asian American women were more likely to be behind on rent or mortgage payments, putting them at higher risk for housing instability. Thirteen percent of women of color have lost health care coverage since the pandemic began, a rate that was nearly twice as high as the 7% of white men, white women, and men of color who each similarly lost coverage.
Even women who are returning or will eventually return to the workforce are vulnerable to career setbacks, lower pay, and decreased Social Security or retirement income. A 2018 report by the Institute for Women’s Policy Research found that an employment gap of a year leads to a 39% decrease in women’s annual earnings — a figure that rises to 65% for a gap of four years or more. Recent analyses from the Center for American Progress estimated that a typical American woman earning a median wage before the pandemic could lose $250,000 in lifetime earnings if she returns to work in 2022 and $600,000 if she does not return to work until 2024.
This is why women’s employment is critical to the economy.
In less than a year, the U.S. erased more than 30 more years of women’s employment gains. And yet the conditions for the current women’s employment crisis were set long before the pandemic hit U.S. shores.
Economic opportunity and security in the U.S. have long been segregated along race and gender lines. In 2018, women were 36 times more likely to live in poverty than men, with Black, Latinx, and Indigenous women experiencing poverty rates that were two to three times as high as those of non-Hispanic white men. U.S. women’s labor force participation rates for Black and white women had been on a slow decline since 2000 — a trend that distinguishes the U.S. from most other wealthy, industrialized nations.
Women’s declining rates of labor force participation were already having a negative macroeconomic impact before the pandemic. S&P Global estimated that if U.S. women’s rates of workforce participation had kept pace with those of Norway, the standard-bearer, the U.S. economy would have been $1.6 trillion larger by 2017 than it was — an amount that equates to an extra $5,000 for every adult and child in the U.S.
After the pandemic, the situation will be even more dire. The speed and strength of any economic recovery are tied to how well the U.S. addresses the employment crisis among women. In March 2021, Federal Reserve Board Governor Lael Brainard warned of potential “scarring effects” for household incomes and growth unless the declines in women’s labor force participation are reversed soon. Brainard’s concern is well justified: from 1979 to 2016, women’s paid work drove 91% of income gains experienced by middle-class families.
A recession that has driven millions of women out of the paid labor force creates vulnerabilities in our entire economic system, making any economic recovery slower and less equitable, and thus the resulting economy less robust.
This is a modified excerpt from “Women’s Work: Key Policies and Paradigms for an Inclusive Post-Pandemic Economy” by Julie Kohler, Stephanie Odiase, and Jessica Forden. This is part 1 of 4 in a series of blog posts about our report that addresses women’s labor participation, the structural social-political and economic factors that hold women back, and the path forward. Read the next part here.