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Women's labor force participation set back three years due to COVID-19

Women's labor force participation set back three years due to COVID-19
© Ethel's Club

COVID-19 has set the U.S. back three years in terms of the number of women participating in the labor force. As a gender economist, this reversal concerns me because it concerns our collective economic recovery and stability as a nation. 

The alarm bells were already sounding by the time the August jobs report came out, which showed that women were 66 percent of those who had left the labor force since the beginning of the coronavirus pandemic. For reference, women made up 47 percent of the labor force pre-COVID, signifying a 19-point gender gap in the share of pandemic-related job losses.    

The situation only worsened with the release of the September jobs report. Between August and September, women dropped out of the labor force at four times the rate of men: 865,000 women versus 216,000 men either stopped working or stopped looking for work. Of the 865,000 women who left the labor force, 37 percent are Latina, 7 percent are Black, and 56 percent are white.

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This drop sets us back three years, to Q3 2017, in terms of the number of women participating in the labor force. We are now staring straight in the face of an economic crisis and must take swift action. 

Women’s labor force participation matters to everyone — regardless of gender. Since 1970, women have added $2 trillion to the U.S. economy by increasing their paid labor force participation. This increase has spurred “major economic growth” in recent decades. 

And there are still hundreds of billions of dollars on the table. If we increase the share of prime-working aged women in the labor force to rates equal that of our Canadian or German peers, we could generate an additional $600 billion in economic activity and boost GDP by 3.5 percent. Or, we could go a step further and fully close the gender gap in labor force participation to expand our economy by $789 billion

For the more than 40 percent of U.S. households with children headed by a breadwinner mom, these percentage point changes in labor force participation determine their level of economic well-being and safety. (Nevermind the compounded inequity these households face due to the gender pay gap, which sees breadwinner moms earning 66 cents on the dollar of their male breadwinner peers.)  

Mothers of color and the households they support experience much worse. 51 percent of all Black households with minor children rely on breadwinner moms for their economic security. Moreover, Black breadwinner moms face the largest gender pay gap of any women in the U.S. They earn a mere 44 cents for every dollar earned by white breadwinner dads, and the median household income for Black sole breadwinner moms is $30,000.

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Despite the dimming reality, it’s not too late to intervene. In fact, we must do so to reverse the trend of women’s declining labor force participation. This is our opportunity to construct an inclusive (i.e. not K-shaped) economic recovery and lay the foundation for future economic prosperity for all. Here’s what should happen.  

At a high level, policy creation must undergo structural reform. That is, we need to apply the intersectional gender lens to crafting policy. It starts with disaggregating data by gender and race/ethnicity so we can better understand what’s happening in our country. 

The aggregate unemployment rate may have dropped to 7.9 percent last month — down from its 14.7 percent peak in April — but what about Black women’s unemployment rate, which still sits in a double-digit territory (around 11.1 percent). And what about Latina’s unemployment rate (11 percent) which ticked up a half percentage point from August? It’s time we start integrating these intersectional insights into decision-making to improve the efficiency and efficacy of public policy. 

More acutely, we need provisions to pull women back into the labor force and keep them there. An investment in women’s labor force participation is an investment in our economic recovery. Due to the 153 percent increase in unpaid labor for women during the pandemic, some of the most beneficial provisions include immediately expanding access to childcare, paid sick leave, and paid caregiver leave

Long term, we need to a.) ensure professional opportunities for women aren’t stunted by inequitable people decisions (i.e. inequitable rates of promotion or biased performance reviews); and b.) ensure women are provided equitable access to skills training for the digital economy. Avenues to future-proof the workforce include expanding partnerships between local colleges and businesses, implementing apprenticeship programs, reforming access to higher education and skills-based degree programs, and removing barriers for women in tech

Ultimately, we hold the power to decide the shape of our economic recovery, so which shape will it be?

Katica Roy is the CEO and founder of Pipeline, a company that leverages artificial intelligence to identify and drive economic gains through gender equity.