Recession as a Boost for Gender Equality?

We are currently in the grip of one of the worst recessions in modern history.   The U.S. economy has shed 6 million jobs since the beginning of the recession.  The unemployment rate hit 9.4% in May as 345,000 jobs disappeared, marking the 17th straight month of job loss.  But one interesting feature is how the job losses are spread across gender lines.  Male unemployment rose to 10.5% in May, compared to 8% for women.  According to the Bureau of Labor Statistics, 82% of the job losses have fallen on men, as male-dominated economic sectors like construction and manufacturing contract faster than female-dominated ones like health care and education.  This will only get worse, as Princeton economist Alan Blinder estimates that between 28 and 42 million more jobs in the U.S. are at risk of outsourcing, once again disproportionately held by men.  What this implies is that women are poised to surpass men for the first time on the nation’s payrolls, which is a remarkable milestone on the journey that started with WWII, when women came out of their homes and joined the labor force to take the places of men who left to fight. 

Behavioral economists Brad Barber and Terrance Odean found in a 2001 study that out of all factors that contribute to overconfidence in investing in financial markets, the most important is the gender “male”.   The current crisis has largely been brought on by unregulated Wall Street men.  Hopefully that is set to change as women take charge.  The U.S. already has more women graduating college every year than men, and if current trends continue, will soon have three female graduates for every two male graduates.

So does the “he-cession”, as some economists and bloggers have been referring to the current crisis, mean that we can stop worrying about the status of women in the workplace?  Far from it.  President Obama’s Lilly Ledbetter Fairpay Act is only one step forward in addressing the fact that women still earn 76 cents on the same job that pays men a dollar.  While it relaxes the statute of limitations on pay discrimination lawsuits, it doesn’t provide a guarantee for equal pay.  But there is some good news here too:  pay inequality is the highest among the eldest demographics and steadily goes down when we look at younger employees.  So the new generation is much more strongly committed to rectifying this wrong than the previous one.

There is hope on the political front as well.  89 years after the 19th Amendment granted women the right to vote, we still have only 17 female senators and 74 female representatives.  However, for the first time the U.S. voters came really close to electing a woman as their president.  While the electoral outcome was historic in a different way, the country was blessed with a first lady with impressive credentials with a background in law, public policy and management.  The house has a woman as the speaker for the first time in its history.  Voters in Iceland and Lithuania, two European countries also hit hard by the crisis, elected women they judged to be best able to rebuild their economies as their first female prime minister and president respectively.  So bad times also have good effects; they force us to introspect and evolve, often for the better. 

-Ranajoy Ray-Chaudhuri, Professor of Economics at St. Mary's College of Maryland

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