In recent decades no group has benefited more from job creation than women. The percentage of women working has grown substantially and the number of women working full-time is growing. Nearly 60 percent of women who worked at some time in calendar year 2003 worked full time and year round, compared with 41 percent in 1970.
But despite the gains of recent decades, nearly forty percent of adult women are not employed, and when the economy slumps, so does the employment of women. About 2.3 million women experienced job displacement between January 2001 and December 2003.
And women still lag behind men in pay. From 1979 to 2004, women’s earnings as a percent of men’s increased by 18 percentage points from 62 to 80 percent.
The best way of boosting the employment and pay of women is by creating an even stronger job market.
When the job market weakens, who gets hurts the most? African-Americans. Recessions and economic downturns take a terrible toll on African-American households: the unemployment rate for African-Americans rises sharply faster than the unemployment rate for white Americans. In September of 2007 the “official unemployment rate” for African—Americas was 8.1 percent, significantly higher than the national average of 4.7 percent. But the official unemployment rate only tells part of the story. Because of a weak labor market, many African-Americans have dropped out of the labor force. Today, only 58 percent of adults African-Americans are employed.
And it’s not just the unemployment figures. During weak job markets, the income gap between African Americans and whites increases.
In July of 2006, the Economic Policy Institute looked at how the income gap between African-Americans and whites closed between 1995 and 2000 when the job market was still strong. Here’s what it found:
In 1995, the median income of African-American families was 60.9% of that of white families (in 2004 dollars: $31,966 versus $52,492). By 2000, when the unemployment rate fell to 4.0%, the ratio was 63.5% (still a very large income gap: $36,939 versus $58,167 in 2004 dollars), the highest level on record, going back to 1947.
But EPI found that after 2001 the racial gap widened again as a result of the recession and the jobless recovery that followed. EPI’s analysis shows that if the unemployment rate had remained at 4.0% instead of rising, the “African-American/white income ratio would have been 63.9%, even larger than the 2000 record, and significantly higher than the 62.0% that actually occurred in 2004.” EPI’s report concluded that, “unless the very favorable labor market conditions of the latter 1990s return and are maintained, racial income gaps are likely to widen further.”
Despite the job gains of recent years, Hispanics still have a higher unemployment rate than the national average. In September of 2007, the Bureau of Labor Statistics reported an unemployment rate of 5.7 percent for Hispanics—a full percentage point more than the national average. More than a third of adult Hispanics (34.7 percent) are not working.
During times of recession or slower growth, Hispanics tend to fare worse than the general population and employment and income take longer to recover. Second-generation Latinos—U.S. -born children of an immigrant parent—experience high job losses. In most recessions Hispanic unemployment has fallen hardest on low-skilled immigrants. Young people, in particular, are hit hard by hard times. The heaviest job losses for Hispanics occurs in so far are concentrated in manufacturing and the retail trade, which together account for 40 percent of all Hispanic unemployment. The second generation, Latinos of Mexican origins and women have been hardest hit overall.
Many Hispanic families are often ill-prepared to deal with a weak job market. Despite gains in recent decades most Hispanic families have minimal levels of household savings and other assets, and many workers and their families are not eligible for unemployment insurance and food stamps. Out of 1.26 million unemployed Latinos in December 2001, only 40 percent are were receiving UI benefits.
Employment and pay of Hispanic workers, more than other groups, would benefit from a long, sustained improvement in the nation’s job market.
In September of 2007, the official unemployment rate of young people, ages 16-19, was 16.0 percent—more than three times higher than the national average. But the problem of youth joblessness extends far beyond the officially unemployed. Only about one-third of young adults in this age group are employed at any given time. Various studies have found that up to one-half of youth unemployment ends in labor force withdrawal.
During times of weak labor markets, many young people give up the search for work and leave the labor force. Even worse, there is a hard-core group of young people, particularly minority youth, who experience long spells of unemployment. In recent months, the unemployment rate of African-American youth between the ages of 16 and 19 has hovered around 30 percent.
Male teenagers not in school, in particular, suffer prolonged periods of unemployment, much of it not measured by official unemployment rates. Studies indicate that a shortage of attractive jobs is the major reason for long-term youth unemployment.
Despite significant improvements in the health and longevity of older Americans, the employment and labor force participation rates of older Americans has declined significantly in the past fifty years. Older Americans, whether voluntarily or involuntarily, are leaving the workforce at earlier ages. In 1950, workers over the age of 55 comprised 17 percent of the workforce, but by 2000 that figure had fallen to just 13 percent. The drop-off has been most pronounced in men. The overall labor force participation rate of individuals over 55 fell by ten percentage points between 1950 and 2000-- despite a sharp increase in the employment and labor force participation of women over the age of 55.
Most of that drop occurred before 1995. While there has been a slight increase in the labor force participation and employment of older Americans in the past two decades, there are still millions of older Americans who—while still capable of working and desiring employment—finds themselves shut out of the workplace. Men in recent years have been retiring at an average age of 62, women at the age of 60. Some are victims of involuntary retirement; others retire because of societal expectations or lack of attractive job options.
Whatever the reason they left the labor force, unemployed older Americans represent a terrible loss of valuable human capital. A stronger labor market, one in which workers are in higher demand and work schedules are more flexible, could tap into that reserve of human capital.
