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The hidden economic plight of US working-class women

Reuters/Brian Snyder
The American dream is increasingly out of reach for working-class women.
By Gwynn Guilford, Allison Schrager
Published Last updated This article is more than 2 years old.

Long and feeble though the US economic recovery has been, good times would seem to finally be here.The economy grew at the zippy clip of 4.1% last quarter. And just-published employment data show that only 3.9% of the American workforce is unemployed, suggesting there are jobs aplenty.

But for some Americans, things have gotten markedly worse in the last decade or so. Consider the changing fortunes of women without a college or associate’s degree in their prime working years (what economists define as the ages 25 to 54). A striking one-third of women in this group have dropped out of the US workforce, meaning that they’re neither working nor looking for work. This helps explain why the official unemployment rate is so low; since people count as “unemployed” only if they’re actively searching for a job, these women are hidden from that data.

What’s more disquieting still is that they used to be in much better shape.

Taken as a whole, labor force participation for women between ages 25 and 54—so-called “prime-age women”—dipped slightly in the years after the Great Recession. But for the last year or so, the participation rate has been about where it was in 2006,  a little over 75%.

The recovery has been far less kind to women without a college degree. These days, the share of less-educated women who’ve dropped out of the labor force is up nearly 4 percentage points from 12 years ago. Men of the same background have experienced a similar change, although that shift has been slightly less pronounced.

For women between the ages of 45 and 54 without a college degree, this trend—as well as the less dramatic increase among men of the same background—has been much more acute.

That’s particularly concerning because of how critical those mid-life years are to a person’s future financial well-being. A time when employees should be at or nearing their career peak, the stretch of life from one’s late 40s and early 50s are when workers should be commanding wages that reflect their skill and experience.

It’s unclear why this group is struggling to keep a foothold in America’s longest-ever expansion. However, even for those who do have jobs, things haven’t exactly been peachy.

Take, for example, wages. In 2006, the typical, employed prime-age women without a degree brought home $562 (in 2018 dollars). Her median weekly wage is now $546. And again, among the group aged 45-54, the drop has been even sharper, falling from the equivalent of $600 a week to just $560.

More than most, women from this group have been buffeted by technological advances—including changes far more dramatic than the robot invasion of assembly lines that tends to grab headlines. Sure, manufacturing has taken a hit. Back in 2006, it accounted for around 5.6% of the jobs held by employed prime-age women without a degree, compared with 4.2% now.

But that decrease is slight compared to the bloodbath of office and administrative jobs in the wake of digitization and outsourcing. Twelve years ago, nearly a fifth of employed women from this group worked in administrative jobs. Now only 14.9% do. Similarly, the rise of online retailers likely helps explain why only 7.8% of this demographic currently works in sales, down from 9% in 2006 (the -1.1 percentage point change in the chart below is due to rounding).

Once again, this trend is even more intense among degree-less women in that critical age group, between 45 and 54.

Of course, economies are constantly evolving. As some jobs have disappeared, others have opened up. A rising share of employed women without degrees now earn their living in industries like transport and personal care, with median wages for these jobs between $400 to $460 a week. Meanwhile, the remaining jobs in shrinking occupations pay more: Median administrative pay is a comparatively more generous $630 a week.

In other words, yesteryear’s secretaries and sales clerks may have had to shift to driving Uber and doing nails—jobs where they’re making much less. If, that is, they’ve managed to stay in the workforce at all.

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