There’s a chilling trend emerging in the job market: Women are dropping out of the US labor force at some of the highest levels in history.
An estimated 455,000 women left the workforce between January and August this year, a period when the overall labor force has held relatively steady, Bureau of Labor Statistics data shows.
Only the pandemic saw a larger exodus for that period, according to BLS records that go back to 1948.
Economists are sounding the alarm: The losses, if continued, not only stand to erase the historic gains made by women in recent years but also risk stifling US economic growth.
“It’s diminishing both current and potential growth in the economy,” said Diane Swonk, chief economist at KPMG. “You want an economy that has as many people who want to have their hat in the ring working and their talents as possible. It’s not a zero-sum game. It’s not men or women. We need everybody. We need all hands on deck.”
In the years leading up to the pandemic, the labor force participation rate for prime working-aged women (25-54 years old) rose faster than that of their male counterparts.
There were some key reasons behind that shift: Fast-growing industries such as health care and caregiving were predominantly female; educational attainment for women rose substantially; and women made greater inroads into traditionally male-dominated fields such as construction, agriculture, and repair and maintenance.
Then came the pandemic, which put 21.9 million people out of work, 55% of whom were female. The participation rate for prime working-aged women plunged by more than 3 percentage points to 73.5% in just one month. (Labor force participation rates typically move very modestly, nudging up or down by just tenths of a percentage point over the span of years.)
But as the economy recovered in the following months, the rebound was sluggish for women — so much so that the period was dubbed a “she-cession” as female workers suffered higher rates of unemployment and worse employment outcomes than men.
The pandemic battered female-dominated industries; rising costs and worker shortages in the child care sector hampered moms’ abilities to return to work; and women, who usually take on caregiving responsibilities, stayed home to tend to aging parents and relatives.
“Post-pandemic, we finally saw women come back en masse, and part of that was due to hybrid and work-from-home (arrangements), and it enabled women to work in ways where they could rejoin the labor force,” Swonk said.
Women’s prime-age participation rate hit an all-time high last year of 78.4%. However, in recent months, participation has been hovering at around 77.7%.
“We had finally, after decades, gotten past the peak that we hit in 2000. It took a hiring frenzy and hybrid work to get us back up again and exceed that level, which is stunning and a bit of a sad commentary, because we lag other major developed economies,” Swonk said.
The factors behind the falloff are multifaceted and several are systemic in nature.
There’s the biggie: Child care and early education costs continue to rise. Some operators within that industry are in “grim, financial binds,” University of California-Berkeley researchers have found. Low funding and poor pay has contributed to worker shortages (now further exacerbated by immigration reductions) as well as “child care deserts.” The cost burden is pushed instead to families, who often find the prospects too pricey.
“Women with children under five are driving the outflow from the labor force; and that’s important, because what we’re seeing is women with a [bachelor’s degree] or higher and with children under five are leaving at more than twice the pace of anyone else,” Swonk said. “A lot of very highly skilled, highly trained, highly educated workers are now just leaving the labor force entirely.”
The disruptions due to a lack of child care come at a significant financial cost to businesses, she added.
Also, when women take breaks from the workforce, not only are their lifetime earnings disrupted, but the negative financial impacts can be generational, she said.
“Historically, when women are providers for their family, their children do better off, too; so, what we worry about is the long-term scarring due to the loss of resources for their children,” she said.
Elsewhere, return-to-office mandates have stripped away flexible working arrangements for some employees. The rise of AI coupled with a slow-churn, anemic labor market has put the squeeze on white-collar and customer-facing industries.
The second-largest cohort leaving the labor force is Black women, Swonk said.
“When the economy gets weaker, you tend to see marginalized groups get hit harder,” she said. “The slowdown in demand and supply in workers is happening in tandem, but it’s harder for groups that don’t have a cushion of wealth or the same means as other groups.”
And then there’s been the federal-level policy shifts: President Donald Trump has taken actions such as slashing the ranks of the US public sector (where women, particularly Black women, are heavily employed) and rolling back equal opportunity and diversity, equity and inclusion-related efforts.
“The attack on public sector employment by the administration is playing out with regard to where women are positioned in the workforce,” said Michelle Holder, associate professor of economics at John Jay College at City University in New York. “There also have been policy proposals by the administration either overtly, or not so subtly, encouraging women to leave the labor force and concentrate on home and hearth.”
The White House, in response to a CNN query, highlighted recent efforts to support women such as creating investment accounts for newborns and increasing the Child Tax Credit, the Employer-Provided Child Care Credit, and the Dependent Care Assistance Plan.
“President Trump has a proven record of building an economy that benefits all Americans, including women, and he is implementing the same economic agenda that produced historically low unemployment rates in his first term,” Taylor Rogers, a White House spokeswoman, wrote in an emailed statement. “President Trump is fostering a dynamic economy that creates opportunities for all Americans, including his Working Families Tax Cuts bill that is unleashing economic growth, lowering costs, providing flexibility for families, and promoting generational success.”
For women who left the labor force this year, their experiences are heavily nuanced, CNN’s interviews with more than two dozen women show.
Some decisions came easy: Workplaces became discriminatory, toxic, inflexible, sexist, or ageist; or life, health or family proved far more important.
A female executive with two young children eventually burnt out after juggling home life and her C-suite responsibilities.
A former Army JAG and longtime federal lawyer ultimately couldn’t pass up the US government’s second “fork in the road” offer because her ailing father’s condition worsened.
Other decisions were not easy: The dream jobs landed after years of climbing the ladder abruptly disappeared because of broader macroeconomic matters, loss of funding or an unexpected family development.
A first-time mother left the job she loved because the cost for three-day-a-week child care surpassed that of the monthly mortgage.
“I put everything I had into that job; I gave them everything, and I feel like I’m the most experienced and the most competent that I have ever been,” said Katharine Ransom-DiCerbo, 35, who left her role at a nonprofit organization earlier this year. “But my mental and my physical health broke down to the point where I could not go back.”
“Maybe we have been put in positions where the demands of work have become so large that we are not able to take care of ourselves, our families or grow our families,” she added.
Source: edition.cnn.com
