Women helped pull the U.S. economy out of the last recession. This time around they are falling behind.
The pandemic is disproportionately affecting women and threatening to wipe out decades of their economic progress. As the crisis drags on, some of the biggest pain points are among women of color and those with young children.
These setbacks -- characterized by some economists as the nation’s first female recession -- stand in sharp contrast to the dramatic progress women made in the expansion following the last financial crisis. The jobs, income and promotions that women lose as a result of the coronavirus could hold back economic growth and sideline an entire generation of women.
The official data are stark. The unemployment rate for Black and Hispanic adult women remains above 10%, even though it’s decreased to 7.3% for White women, according to data from the Labor Department -- which will report September employment figures Friday.
At the same time, women between the ages of 25 and 54 -- also known as prime-age -- are increasingly dropping out of the workforce, often to care for children. The participation gap between men and women in this age group is now widening after shrinking to the narrowest ever right before the virus.
Nancy Weindruch, 36, is a case in point. She left her job in communications in July to care for her two-year-old son, while her husband kept his higher-paying work as a political consultant. Earlier in the pandemic, she took advantage of a government program that provided paid leave but that has since expired. She hopes the situation is temporary.
“I’m determined to return to the workforce,” said Weindruch, even if that means “starting a few steps behind.”
Economists say it’s going to be difficult for women like Weindruch to return, and there could be long-lasting consequences not just for women but the entire economy.
“When you hear Fed officials worry about ‘permanent scarring,’ that is permanent scarring,” said Julia Coronado, president of MacroPolicy Perspectives LLC.
Federal Reserve Chair Jerome Powell has commented repeatedly about how women and minorities have been among the hardest hit economically by the virus.
Wage Gap
Millennial women, many of whom have children, were “blazing trails” before the pandemic and are now falling behind, which is a “painful setback,” Coronado said.
The female recession could slow the recovery, according to some economists and policy analysts. The wage gap will likely be more than 2 percentage points wider after a pandemic recession, instead of shrinking like it would during a normal downturn, according to Northwestern University economics professor Matthias Doepke, who co-authored a recent study on the topic.
As many as tens of millions of women may never return to the labor force, even after a vaccine is found, said Center for American Progress senior policy analyst Rasheed Malik. Altogether, McKinsey & Co. expects global gross domestic product could be $1 trillion less in 2030 than it would be without a gender unemployment gap.
Women Voters
There are political consequences too, as women represent one of the biggest voting blocs in question this election. Support for paid leave and similar policies is rising, particularly among Republicans.
Roughly 72% of female voters polled in late March by the University of Maryland’s Program for Public Consultation were in favor of some type of paid leave, up from 64% earlier in the month. The increase in support among men and women for such a policy was driven by a 10-percentage-point rise among Republicans.