On Friday, the Labor Department reported that the American economy added 113,000 jobs and the unemployment rate had fallen to 6.6 percent.
While this sounds like good news, initial analysis interpreted the data otherwise. The jobs news was bad because the increase was much lower than expected, while the unemployment news was bad because it doesn’t capture the underlying changes in the nature of unemployment.
What’s really going on in the job market, especially the job market for women?
Well, as usual with economic data, especially data related to jobs, there are two sides to every data point.
Take the unemployment data first. After peaking at 10 percent in October 2009, the unemployment rate has fallen rather steadily to 6.6 percent in January, putting it at its lowest rate since October 2008. The unemployment rate for women shows a similar trend. It peaked at 9.0 percent in November 2010 and has now fallen to 6.4 percent.
However, the unemployment rate can be pretty misleading in a weak economy for one key reason — a person who doesn’t have a job is considered unemployed only if that person is still looking for a job.
The unemployment rate doesn’t reflect “discouraged workers” — people who want a job and are available to work and have actually looked for work in the past year, but who have given up looking in the past month because they don’t think any jobs are available or they don’t qualify for the ones that are. Because they’re no longer “actively seeking work,” they’re no longer considered out of work even though they aren’t working. And they’re no longer in the labor force because they’re no longer considered unemployed.
Taking into account all of the people who aren’t working changes the picture. Economist Heidi Shierholz at the Economic Policy Institute estimates that the unemployment rate would be 9.9 percent instead of 6.6 percent if what she calls “missing workers” were included in the official unemployment rate.
Furthermore, what you see in the jobs picture depends upon where you stand. If you’re a woman, the news in January was pretty grim. Yes, the economy did create 113,000 jobs last month. But, all of those gains and more went to men, who added 164,000 jobs. Taking the men out of the picture shows that women actually lost 51,000 jobs in January, according to calculations from the National Women’s Law Center (NWLC).
As Joan Entmacher, vice president for Family Economic Security at the National Women’s Law Center, said in a news release, “Today’s jobs figures are especially worrisome for women who lost 51,000 net jobs in January, including 30,000 public sector jobs.”
Now, the question is, why are women doing so poorly in the job market? Women are losing jobs for three main reasons.
First, the government workforce is shrinking.
The government had 30,000 fewer workers in January than in December. This was particularly devastating news for women. Even though women make up only about half of government workers, they accounted for the entire decline in government employment in January.
The NWLC paints a very bleak picture for women working in public service. The fact that the government workforce is shrinking is well known, with more than 17,000 federal workers deciding to retire in January.
What’s less well known, however, is that women are bearing the full brunt of the overall trend towards a smaller public sector. According to the NWLC, women account for not just January’s job losses but for all of the 51,000 total public sector job losses in the past four months.
Whereas some might see the reduction in government jobs as an overdue shrinking of the public sector, women are also facing troubling job losses in the private sector. This development is the second reason why women aren’t doing so well in the job market. Women tend work in areas — retail is one of these — where the private sector is scaling back.
For example, women lost about 5,000 jobs in the retail trade sector in January, which is the second largest private employer for women, according to official government data. About 7.7 million women work in retail stores like Target, Sam’s Club, Best Buy, Sears, J.C. Penney and Nordstrom. These retailers have all cut back over the past few months.
If you’re thinking that retail stores always cut back on their workforce in January following the Christmas shopping season, think again. In seven of the past 10 years — including the immediately preceding four — more people were working in retail stores in January than in December. It’s 2014 that’s the aberration with its reduced retail workforce following the holidays.
Third, women aren’t reaping big gains in the areas where jobs are growing.
With 48,000 jobs added in December, it’s good news that the construction sector is finally showing long overdue signs of a turnaround. But it’s not such good news for women, who got just 3,000 of those jobs. Moreover, since women account for just one out of eight construction workers, growth in this area isn’t a major growth area for women.
It’s also good news that manufacturing employment expanded — for men. For women, there were actually 1,000 fewer women working in manufacturing in January than in December. Employment in professional and business services tells the same story. While men gained 50,000 jobs in this area last month, women lost 14,000 jobs here at the same time
The jobs news isn’t all bad. Despite the weak employment growth and the loss of jobs in many areas, keep in mind that the unemployment rate fell in January.
Hmmm. There doesn’t seem to be much cheering about that news. I’m not surprised.
After all, if job losses increase as the unemployment rate falls, why should we cheer?