Why Are The Women Holding Back?
Retail worker back on the job in the post-pandemic recovery. (Photo by Chris Hondros/Getty Images) Getty Images  Last years lockdowns and quarantines put a lot of people out of work, women disproportionately. Though it is fashionable in the extreme these days to see any disparate effect as a sign of bias, in this case matters were less dramatic. Women bore the brunt of the job losses because services suffered most from the lockdowns and women dominate employment in those sectors. Now the post-pandemic recovery is disproportionately benefiting services and womens employment prospects. Yet many women who were working before the pandemic seem reluctant to seize the opportunity. They have remained outside the workforce, neither working nor seeking paid positions. Their decision reflects a rather subtle and insightful calculation, but whatever the reasons, the pattern is worrisome, for the longer a person remains outside the workforce, the more difficulty she (or he) will have finding a job when it becomes necessary. Job destruction was the overwhelming economic fact of 2020. Before the pandemic struck, employment in this country touched records. Unemployment in February of that year stood at slightly less than 3.5% of the workforce, a figure not seen in decades. Men were in slightly worse shape than women, who saw unemployment at 3.4%. By April, the lockdowns and quarantines had put over 25 million Americans out of work, over 13 million women and about 12 million men. The impact on the service sector and those who it employs led in this devastation. Almost half of all the job losses occurred in leisure and hospitality, as well as in retail. The recovery has reversed much of this 2020 pattern. Since those April lows, the economy has created almost 15 million jobs. Unemployment has dropped to 5.9% of the whole workforce, still far from the way things were before the pandemic but still a powerful improvement. As the service sectors have come back, women have gained jobs faster than men. Their unemployment rate has fallen to 5.5% of their numbers in the workforce, while the mens rate stands at 5.9%. But still some 2.6 million women who worked in February of 2020 not only have failed to go back to their jobs, but they are no longer even seeking work. The picture is troubling and contributes to income inequality, as most of the women who have dropped out of the workforce come from lower end of the income distribution. Probably the most upbeat view offered to explain this reluctance to work rests on the improved job and income prospects of the partners of those who have opted out. Much academic and public research on work decisions notes that the better the job and income prospects of one member in a couple, the more likely the other member, usually the one with less earning power, will give up paid work altogether, at least for a time. This effect is more pronounced among women, but it is increasingly evident among men as well. Well documented as this kind of behavior is, it can do only little to explain what is happening today, since job and income prospects for partners were very good before the pandemic hit and still women participated in paid work then at a greater rate than they do now. More likely, the decision made by so many women to drop out has to do with the extra unemployment money on offer from the two Covid relief bills. Some economists and policy analysts have argued that these extra payments are reason why unemployment rates generally have not fallen farther. The Biden White House has disputed this claim but then hinted at some acceptance by deciding to end the extra unemployment benefits in September. Whatever the general effect, the extra payments might have a special persuasive power among many women, especially those at the low end of the income distribution. Because women are typically the primary providers of childcare in a family and the only provider if they are a single mom, they always assess the pay benefits of work against the cost of childcare. At the lower end of the wage scale, this is often a close calculation. For these women, the added unemployment benefit offers a double incentive to stay home. It both pays them for not working and by doing so saves them child-care expenses. That consideration can overwhelm even a reasonably good wage. Two other considerations may have tipped this calculation still further against work. Though wages have risen, so has inflation raised the cost of living, including the cost of childcare, leaving the real return to work less attractive than it might otherwise seem. Further, there is the movement in several states and even in Washington to eliminate contingent work. Those proposing these moves no doubt earnestly want more benefits for workers, but the legislative pressure and efforts by business to get ahead of the trend have also eliminated the kinds of flexible hours offered by this kind of employment and so have made the tradeoff between work and childcare still less likely to recommend work, again especially for women at the lower end of the income distribution. Labor Department figures certainly point to these combined effects. They show that mothers of young children who have nothing more than a high school diploma have been most likely to drop out of the workforce. This groups work participation rate has fallen 8 full percentage points since the pandemic began. Though this group constitutes only some 12.5% of all working women, its shortfall in participation amounts to almost one-third of the entire number of women who have decided against paid work during this time. Perhaps if the inflation is transitory, as Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen have asserted, a continued rise in wages will begin to pay a higher real return to work and tip this critical calculation enough to bring these women back into the labor force. Perhaps the end of the extra unemployment benefits will create enough of an imperative at lower income levels to overwhelm the calculations women are presently making. If not, the lack of womens participation will become something more durable. If it lasts for long enough, it could become permanent, since it is hard to find an employer when the record shows long stretches out of work and besides, the longer people stay out of work, the more their skills lose applicability.