Women and the Middle-Aged Taking Brunt of Covid Employment Losses

The Wall Street Journal provides a recap of how the workforce has changed as a result of Covid. Even though this week’s jobless claim figures were better than expected and unemployment has fallen to 6.9%, nearly half of its recent peak, those figures mask underlying erosion in employment. Headline unemployment is calculated based on the number actively seeking work. As the subhead to the Journal story explains, “Nearly four million Americans have stopped working or looking for jobs.” It adds:

The labor-force participation rate, or the share of Americans 16 years and over working or seeking work, was 61.7% in October, down from 63.4% in February. Though up from April’s trough, that is near its lowest since the 1970s, when far fewer women were in the workforce.

The supply of workers and their productivity are the building blocks of economic growth. A smaller labor force leaves fewer workers to build machines and clean tables, restraining the economy’s long-term prospects.

The Journal further describes that women and those over 55 have taken the biggest hits, and decline results from three sometimes overlapping factors. First, business closures/job reductions are skewed toward fields where women are over-represented, like retail, hospitality, and personal services. Second, many prime age women have had to stop working to care for children due to school closures. Third, older workers typically often it difficult to land a job again if they lose one in a recession. Again from the Journal:

For those of you old enough to remember, the 1980-1981 downturn was ugly, the worst since the Great Depression, and the economy had been limping for the past six-seven previous years due to stagflation. Weaker labor protection almost certainly plays a big role in lower levels of employment among over-55 year old workers, particularly given that older people are generally more robust than then. Individuals in union jobs would not have to retire until they were ready to, and seniority-based pay scales would encourage them to work until 60 or later. Union contracts were de facto standard setters, including for white collar jobs. It would have been unusual back then for a solid employee to be pushed out before retirement age unless a business was in trouble.

Keep in mind that this picture of Covid job losses is very different from the job loss pattern after the Financial Crisis, where men suffered due to the loss of construction jobs. From the Economic Policy Institute in 2014:

While many strides have been made in the women’s equality movement, job growth among women and men in the aftermath of the Great Recession is not one. The solid lines in the figure below show job loss during and after the Great Recession by gender. Men lost far more jobs than women did in the Great Recession—over 6.0 million jobs, or 8.5 percent of their total December 2007 employment, compared to women who lost 2.7 million jobs, or 3.5 percent. Since the economy started regaining jobs, however, the gender dynamic in job growth has reversed—between February 2010 and the June 2014, men gained 5.5 million while women gained 3.6 million jobs.

How did men both lose and then gain more jobs than women? A lot can be explained by the industries men and women were in at the time of the Great Recession—men were in industries that would sustain the most dramatic job loss while women were concentrated in industries with less job loss. The industries with the largest overall job losses—manufacturing and construction—also employed a very large share of men. Meanwhile, the industries that employed the greatest shares of women in 2007—health care and state and local government—were not as hard-hit. However, men have gained more jobs than women because they’ve had stronger job growth within almost every industry. Women experienced a smaller share of net gains between 2007 and 2014 in 10 out of the 16 major industries: manufacturing, whole sale trade, retail trade, professional and business and health care to name a few.

Economists hope that the afflicted sectors will bounce back this time too and women will show disproportionate job gains. But one broad area is likely to be slow to recover: business travel. Big companies have discovered what a time and money sink a lot of it is. Boondoggles like the conference business and in-person training sessions may never go back to the old normal. The Journal notes:

Nonetheless, some economists see three reasons the pandemic’s depressing effect on the labor force could linger. First, it appears to have sped up some baby boomers’ decision to retire, shrinking the number of productive workers in the economy prematurely. Second, it is forcing some parents of young children, in particular women, to reduce their hours or stop working altogether, which could make a comeback harder. Third, it is falling particularly heavily on workers with less education and skills. These workers often struggle to find well-paying work and many drop out of the workforce…

This recession appears to be speeding up retirements. In the third quarter of this year, about 3.2 million more baby boomers said they were out of the labor force due to retirement than in the same period a year earlier, according to Pew Research. From 2011 through 2019, the number of retired baby boomers rose at a rate of about two million annually.

Labor-force participation among workers aged 55 and over logged in at 38.7% in October, down from 40.3% in February…

Unlike previous recessions, this one is making it especially difficult for parents, women in particular, to work because of school closures and the loss of child care. Participation has fallen much more for prime-age women than men, and even more among those who are parents. Among mothers in this group with children under 13 years old, it plunged 3.4 percentage points between February and October, while dropping 1.4 for prime-age fathers, according to analysis by economists from the Federal Reserve Bank of Dallas. That compares with a 1.2 percentage-point decline among prime-age adults without younger children.

Some seven million adults said they weren’t working because they were home caring for children who weren’t in school or day care, according to recent U.S. Census survey data conducted in late October and early November, up from around six million in May. (Pre-pandemic data isn’t available.)

It’s not as if these two groups, women and near-retirees, are the only ones hurting. Restaurants and bars skew to younger workers by virtue of having most employees on their feet all day. But proportionately, other groups so far have recovered more lost ground than these two. And like it or not, the US is effectively betting on vaccines as its way out of Covid. That means probable business restrictions, including shelters at home, as infections rise above the point where hospitals can manage them, and after that, a wobbly recovery unless and until the vaccines prove their safety and efficacy sufficiently in the field so that the enough of the public is willing to take them to reduce Covid infections to a tolerably low level.

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  1. PlutoniumKun

    I think the Covid recession will have a unique pattern of impact on employment, and it won’t be pretty. The immediate impact on women, especially non-college educated women employees, has been seen in Europe and Japan too. But I think men will catch up, as construction job losses are often a lagging indicator (especially in a world where there is a surplus of cash floating around, this will keep projects that are already started on site to completion). I haven’t been in touch with my architect contacts in a while, but a few months ago they were reporting a really bad job situation – architecture jobs are always the first to go when the construction industry goes into contraction, it often takes a year or two for other jobs to follow.

    It has to be said that one irony of Covid and its impact on the economy is that it is favouring what were once seen as low skilled ‘physical’ jobs that usually go to men – warehouse pickers, delivery drivers, bike couriers, etc, as opposed to the more ‘female’ jobs such as retail service workers, etc. It’s like we are going back to the 19th Century. Maybe raw muscle power isn’t as outdated as we think.

    1. redleg

      Water supply and treatment projects are a lot like architecture work in terms of being barometers.
      I’m seeing municipalities delaying or canceling water projects. Only the large Agricultural projects are getting passed around, which means fewer consulting opportunities for small firms. Part of this could be related to the upper Midwest having only one dry year in the last seven.
      Remediation and maintenance work still going, so it’s not yet like 2007-8. A bottom- up stimulus is desperately needed or even that sector is going to fail.

      1. rd

        If a significant stimulus bill (including funding local and state governments) is not passed in the next two weeks, I think Q1 2021 is going to be an employment bloodbath. State and local governments will be laying off workers, projects will get cancelled or postponed, the hospitality/tourism sector will get doubly crushed by rising covid cases and lack of cash in people’s pockets. Urban transportation systems are likely to have services dramatically slashed, so people with jobs may not be able to get to them.

        We can choose to be a Third World country if that is our national objective.

        The good news with all of that is the “radical left” won’t have to continue to call for defunding the police because it is likely that police budgets will be cut along with everybody else’s budgets by the conservatives.

        1. not a real person

          Wealth and resources apparently can be printed into existence.

          According to Science, we can overcome death if we’re willing to spend enough money on research and development to perfect the Singularity.

  2. taunger

    Nice analysis, but doesn’t this explanation of robustness conflict with the conditions behind depths of despair?

    “Weaker labor protection almost certainly plays a big role in lower levels of employment among over-55 year old workers, particularly given that older people are generally more robust than then.”

    1. rd

      Over 55 were less able to work back then as an overall group, so they were less likely to be classified as employed or looking for work. We now have a group of older workers who want to work who are getting laid off and many states have weak laws to protect them

  3. Jesper

    ‘Divide and conquer’ is the first that comes to my mind when I read articles which (at least on the surface) attempts to point out the groups most hurt and therefore most worthy of help and attention. The rest is left to pull themselves up by their bootstraps?
    If the problem is structural then structural solution might be needed. Preferential treatment of preferred groups is in my opinion not likely to work.
    Once the problem has been defined then the solution might come easier. So, what kind of problem are we experiencing and can that problem be resolved by selecting who is worthy of help and leaving the rest to pull themselves up by their bootstraps?

    1. not a real person

      Egalitarianism often results in ROLE REVERSAL when they realize it is not possible to help everyone because of limited resources.

  4. Lex

    It’s never just a crisis; it’s also an opportunity. Bunch of public and privately owned corporations saw this as the opportunity to offer their near retirees generous early retirement packages, as a way to use labor to balance their books…. except cybersecurity. None of those packages was so generous as to exceed the savings of no longer having to contribute to their former employees 401k/pension accounts, and/or provide them medical/dental/eye care insurance. When you get into your early sixties, working is about the paycheck, the insurance, and especially using those last few years to put on some extra rolls of fat before that Long Stretch of relative idleness.

    I’m a little curious about how the future looks to those who took the deal.

    1. Jeremy Grimm

      I “took the deal” several years ago … but rather than a deal it seemed like an offer from the Don that I couldn’t refuse. And what retirement package do you mean — the COBRA payments I made until I qualified for Medicare — payments that cost almost half as much as my rent?

  5. Synoia

    In the Electrical Engineering discipline, there is a field names “Control Theory.”

    In Control theory, there are Governed (Controlled) system and Ungoverned systems. The pinnacle of Governed System is Rocketry which uses up to the third or fourth derivative (acceleration and rate of change of acceleration) of the rocket’s velocity to ensure the flight path is stable. The implementation of Governing, is based on feedback.

    In practice, feedback over more than 3 stages (think of them as rings) will cause control failure, because because feedback information is a little inaccurate. A prime example of this is the state of the Current US Presidential election – Chaos.

    The Economy, as it rises and crashes, has all the characteristics of an Ungoverned, or Badly-governed system.

    Control Theory and its application is engineering, management of a Complex System. Managing and Controlling Finance the economy are based on Greed, BS and Fairy Tales, combined with both greed and with little, or no, understanding of second and high order controls.

    1. Not a real person

      News on scientific developments have been sparse for the last 12 years.

      Have we figured out how to launch rockets to reach the moon yet?

  6. Jeff N

    Thank you for this. I am 48 and I’ve been told my IT job of twenty-three years is going away sometime in 2021. They’ve already hired two new younger people who, even when combined, will do my role for less money.
    My problem is that my job experience is old tech. I know a bit of current tech, but not enough that I feel comfortable responding to job postings seeking it.
    My job is going away more in a reorganizational way, like a long-term cost-cut. But if this company wasn’t under so much financial pressure from covid, maybe this reorg wouldn’t have happened.
    Selling my house (I live alone) and retiring early to a cheaper country to live a frugal existence feels like my only option at this point. But, it may make more sense to move in with my parents until their passing, as I couldn’t afford to be flying back and forth. However, living with parents=living in US=can’t afford US healthcare.

    1. Oso_in_Oakland

      Jeff N i feel you on this, i was in a similar quandary with telcom. once a two-tier wage system was allowed by our unions older employees were harnessed to old tech and all the training $ for new technologies went to the (typically) younger employees. as older technologies were replaced it was easier to surplus the older employees.
      i was old enough for SS and a pension when they finally chased me out, but so many were in your situation. sending good energy your way.

  7. not a real person

    Officers are all racist pigs.

    The money spend on them would be better spend on tuition for a young black american’s education. Defund the police and watch the engineering and math college programs at colleges around the United States become predominately composed of black americans.

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