President Obama’s Gender Gap

President Obama faces an important gender gap in a key labor market indicator – the unemployment rate.  The unemployment rate in July for women age 25 to 54 was 7.4% while the unemployment rate for men of the same age group was 7.0%.  It is more troubling that the unemployment rate for women age 25 to 54 has increased by 1.2% in the President’s first 42 months in office, while it has dropped by 0.6% for men age 25 to 54.  (Note: I use the unemployment rate for this age group because younger workers may drop out of the labor force to attend school and older workers may drop out of the labor force to retire.)

Over the past 30 years the average unemployment rate for men has been slightly lower than for women (age 25 to 54).  Moreover the annual jobless rate for women has exceeded the men’s rate by more than 0.4% (the current gap) only three times in the past three decades.

The following chart compares unemployment rates for women for President Obama and the previous five presidents who were seeking re-election, 42 months into their first term.  The current unemployment rate of 7.4% for prime working age women is one percentage point higher than the rate for any other first term incumbent.

The increase in the unemployment rate of 1.2% is also unusually high compared to previous presidents seeking re-election.  The only president who held office during a larger increase in women’s unemployment was George Herbert Walker Bush; the unemployment rate for women age 25 to 54 increased by 1.8% from January 1989 to July 1992.

The reason for the poor labor market outcomes for women in the past three and a half years is worthy of more study.  The composition of employment by sector doesn’t explain the gender gap.  Over one million construction sector jobs have been lost since January 2009 and only about one in eight of these jobs were held by women.  In contrast, women hold about four out of five jobs in the health care sector, where employment has increased by 925,000 in the past 42 months.  Much has been made, by some observers, about the decline in government employment since January 2009.  Government employment has dropped by 625,000 in the past 42 months, but 43% of these jobs were held by men.  Finally, government employment is about 16.5% of total employment, or about 0.2% higher than when President Bill Clinton said “the era of big government is over.”  The modest decline in public sector employment over the past few years is simply not large enough to explain the increasing unemployment rate of women.

There will be three more monthly labor reports that will be released by the BLS before election day.  However, it is almost certain that when voters go to the polls the unemployment rate for women will be higher than for men and substantially higher than it was on Inauguration Day.  That could mitigate some of the gender gap Mr. Obama enjoyed in 2008.

56.5% of the Job Losses Since 2009 Occurred for Women

Last month the Romney campaign cited Bureau of Labor Statistics (BLS) data to report that 92% of all job losses since President Obama took office in January of 2009 were suffered by women.  The media reaction to the Romney campaign’s claim was mixed, but most analysts did not question the accuracy of the underlying data.  Some analysts opined that it was expected that most of the job losses in the past three years occurred for women because government employment has contracted slightly since January 2009.  My blog post from April showed that 95% of the jobs eliminated at the U.S. Postal Service were held by women.  The problem with all of these analyses is that they are based on faulty data.

The BLS announced on its website yesterday that:

Estimates of women employees in the U.S. Postal Service and some related series from the Current Employment Statistics survey were temporarily removed from the BLS data-retrieval system on May 14, 2012. BLS staff discovered data-processing errors that occurred during the November 2009–April 2012 period and resulted in an incorrect ratio of women employees to all employees. Correcting these errors will increase the number of women employees but does not affect total employment levels. Series of women employees were removed for the U.S. Postal Service, federal government, government, service-providing, and total nonfarm.

Although I am not sure about how the BLS discovered their error, I believe I have an explanation.  Alan Robinson of the Direct Communications Group (@CEP_Observer) didn’t believe the numbers in my April blog post (three weeks ago) about women’s job losses at the US Postal Service.  After I sent him the data I used and a link to the BLS website, Alan still didn’t believe the data.  His inquiries to the BLS caused their economists and statisticians to take a closer look at the data, which uncovered the apparent errors.

The BLS is assigned an incredibly difficult task, and generally produces extremely reliable and valuable data.  This time they made a mistake, and are working to correct the problem.  Until the establishment employment data for women are updated, our best information on the gender composition of job losses comes from the household survey, also administered by the BLS and the Census Bureau.  The household survey shows that the fraction of the adult population that was employed:

• Declined from 66.2% to 64.3% for men, between January 2009 and April 2012
• Declined from 55.3% to 53.0% for women, between January 2009 and April 2012

Women comprise about 52% of the working age (civilian) population.  The 2.3% decline in employment relative to population for women means that 2.89 million fewer women were employed in April 2012 than would have occurred if the employment to population ratio for women had remained steady since January 2009.  Similarly, there are 2.24 million fewer men employed in April 2012 than would have occurred if the employment to population ratio for men had remained constant since January 2009.

The calculations above indicate that the best estimate is that 56.5% of the relative employment declines since January 2009 were suffered by women.  Next month the BLS will post updated data on the gender composition of employment based on the establishment survey.  There are many reasons why the household and establishment survey data will look somewhat different, but it is likely that the revised establishment numbers will mirror the household data and show that the majority (but far less than 92%) of the jobs lost since January 2009 were jobs held by women.

Women, Job Losses, and the Postal Service (Warning this post was based on data that the BLS now considers inaccurate)

This post, originally dated April 24th, is subject to revision once the BLS corrects its data series on the employment of women. See my updated post.

Last year President Obama told NBC’s Ann Curry ”a lot of businesses have learned to become a lot more efficient with a lot fewer workers.”  The President gave examples of airport kiosks and ATM machines as technological changes that lowered the demand for certain types of clerical and sales jobs.  The President could have added that many of these jobs were previously held by women and are unlikely to return even after the economy recovers.  That may be one reason why the unemployment rate for women has increased from 7.0% to 8.1%, while it has fallen by 0.3% for men since January 2009.

Although economics textbooks often describe technological change that replaces factory workers (and jobs traditionally held by men)  more recent advances in information technology have reduced the demand for some clerical and sales jobs traditionally held by women.   There may be no better example of this phenomenon than the United States Postal Service where more than one in three women lost their jobs in the past three years.  The number of USPS employees has fallen by 116,500 (15.6%) in the past three years.  Nearly all (more than 96%) of the job losses have been due to a decrease in the number of jobs held by women.  The following chart illustrates the average employment by gender and calendar year, for the past five years, at the USPS.

Women’s employment declined by 112,300 while men’s employment dropped by 4,200 from 2008 to 2011.

The next chart illustrates the fraction of USPS jobs held by women in each of the last five calendar years.

The fraction of USPS jobs held by women peaked in 2007 but has now fallen below one third for the first time since 1980.

The information technology revolution, and the recession, did not just lower demand for post office employees; over the past three years employment at bookstores fell by more than 30% and in the courier and messenger industry by almost 9%.

The dramatic change at the United States Postal Service since 2009 is but one example of how advances in information technology can permanently reduce the demand for some clerical and sales positions traditionally held by women.  Although polls indicate that President Obama enjoys a comfortable lead over Mitt Romney among women that may well depend on what happens to the gender gap in job creation between now and November.  As more Americans use the internet to communicate, shop, gather information, and find entertainment it is likely that employment will continue to decline at many retailers and service providers even if the economy strengthens.

Men’s Pay is More Unequal than Women’s Pay

The latest BLS data from the Current Population Survey again shows that full-time pay is more unequal among men than women.  A common measure of inequality is the ratio of full-time earnings of a worker just included in the top 10% of the pay distribution to the earnings of a worker just in the bottom 10% of full-time workers.  Using this ratio to measure inequality, the BLS data show that:

• Inequality is higher for more educated workers
• Inequality is higher for men than women

In the first quarter of 2012, the ratio of top 10% earnings to bottom 10% earnings was:

• 4.52 for men and 3.68 for women with a graduate degree
• 4.59 for men and 3.94 for women with a bachelor’s degree
• 3.78 for men and 3.30 for women with a high school diploma

Facts about Women’s Job Losses

The Romney Presidential campaign has correctly observed that men’s job losses tended to occur earlier in the 2008-2009 recession while women have lost more jobs than men since January 2009. The employment of women in the private sector fell by about 252,000 from January/February 2009 to January/February 2012 (BLS establishment survey). There are, however, substantial differences in the magnitude of job losses and gains by industry. For example, women’s employment in the health care industry increased by almost one half million and by 224,000 in temporary help agencies. In all other private sector industries women’s employment fell by 975,000 over the past three years.

Private Sector Job Losses Highest in Retail Trade

The following table presents information on selected private sector industries where women’s employment has fallen disproportionately over the past three years.

Selected Private Sector Industries with Substantial Declines in Women’s Employment January/February 2009 to January/February 2012
Industry	Employment Change	% Change in Employment
Retail Trade	-260,000	-3.51%
Telecommunications	-87,000	-23.1%
Publishing	-56,000	-14.5%
Real Estate	-48,000	-6.45%
Apparel Manufacturing	-22,000	-18.1%
Air Transportation	-16,000	-8.76%

Some of the jobs lost by women in the past three years, such as those in real estate, retail trade and air transportation are likely to return as the economy recovers. The steep percentage declines in employment in industries adversely affected by international trade and technological change are less likely to be reversed in an economic recovery.

Going Postal

The BLS data also indicates that women’s employment in the public sector declined by about 448,000 over the past three years. The following table shows that while there were small declines in state government and a modest increase in most of the federal sector, women’s employment at the U.S. Postal Service dropped sharply, by almost 35%, in just three years. Over 96% of the jobs lost at the USPS were held by women; while almost 35% of all women at the USPS lost their jobs the employment of men fell by less than 1% in the past three years.

Declines in Women’s Employment in the Public Sector January/February 2009 to January/February 2012
Industry	Employment Change	% Change in Employment
U.S. Postal Service	-109,000	-34.9%
All Other Federal Government	+51,000	+5.46%
State Government	-12,000	-0.43%
Local Government Education	-204,000	-3.33%
Other Local Government	-174,000	-5.68%

Much of the decline in public sector employment has been at the local government level. Women’s employment in public education fell by about 204,000 over three years, but this was a smaller percentage decline than in the rest of local government.

Conclusion

Women have lost more jobs than men over the past three years despite the fact that almost 80% of health care workers are women and almost half a million health care jobs for women were added over the past three years. Women have lost over 200,000 jobs in public education, but job cuts in local government have been larger (in percentage terms) outside of education where the majority of workers are men. In the past three years women have lost jobs disproportionately in retail trade, where men’s employment increased by a quarter million, and in telecommunications, publishing and real estate. The biggest gender gap in job losses, by far, is at the U.S. Postal Service where over 96% of job losses were suffered by women.

Technical Note: Employment figures compare the average of seasonally unadjusted data in January and February 2012 to the corresponding average in January and February of 2009.

Discriminating Oscar Voters

Hollywood seems more politically correct than most industries, so it surprises me that the Academy of Motion Pictures Arts and Sciences still segregates acting awards for men and women.  Oscar voters are capable of evaluating acting performances in comedies and dramas, even though the films had different screenplays and directors, but apparently are unable to compare the acting performances of men and women.  I am not sure what other industry could plausibly make the claim that the job performances of men and women could not be fairly compared.

In addition to gender segregation of awards, there is a noticeable age difference in Best Actor and Best Actress winners.  In the history of the Oscars the average Best Actor winner is more than eight years older than the average Best Actress winner.  Adrien Brody is the youngest man to win an Oscar for Best Actor; he won for The Pianist 22 days before his 30^th birthday in 2003, and is the only man under 30 to win the award.  In contrast, 29 of 84 Best Actress Oscars were awarded to women under the age of 30.  Jodie Foster and Luise Rainer won two Best Actress Oscars before they turned 30.

Since 1967, when the Federal law was passed prohibiting discrimination in employment against workers age 40 and above, about 70% of Best Actor winners have been 40 or older compared to one third of Best Actress winners.  Actresses age 40 and above don’t win as many awards because they are much less likely to be nominated.  Since 1967 less than 40% of women’s nominations were to actresses age 40 and above compared to 65% for actors.

The age distribution of actors and actresses in the U.S. are roughly comparable (according to the American Community Survey).  In fact, actresses are slightly older than actors, on average, and men tend to be over-represented in the under 30 age group in this occupation.

The statistics cited above do not necessarily mean that members of the Academy of Motion Pictures Arts and Sciences are discriminating against actresses age 40 and above.  The Oscar nominations and awards may well be decided on merit.  It is important to recognize, however, that if a private employer displayed such dramatic gender differences in job evaluation or promotion rates by age, the Equal Employment Opportunity Commission could be expected to question the selection process.

Hollywood appears to be the bastion of liberalism, but the facts suggest otherwise.  Only four women directors have ever been nominated for an Oscar and Kathryn Bigelow (2009) is the only woman to win.  Women have their own set of acting awards, a holdover from a time that the rest of the U.S. economy has left far behind.  It would be interesting to see men and women compete for Oscars in the same categories, not just for writing, editing and directing, but for acting, as well.  I am not sure why there have been so few nominations and Oscars for actresses age 40 and above, but the differences from men are stark and deserve more scrutiny.

Women and the Economic Recovery

News media coverage of the 2008 recession and the subsequent recovery has focused on changes in total employment and movements in the overall unemployment.  Although the change in the total number of jobs is an important economic indicator, a focus on overall employment and unemployment can mask important changes in the composition of the workforce.  I look beyond changes in total employment to illustrate why the 2008 recession is unlike any in U.S. history.  Job losses in recessions previously were concentrated in traditionally male-dominated jobs.  The 2008 recession was different.  Women lost jobs in record numbers and women have seen small job gains during the recovery.  This stands in stark contrast to previous recessions and recoveries.

The following graph illustrates changes in the full-time equivalent employment (a part-time job is counted as ½ of a full-time job) of men.  Four years after total employment started to decline, men’s employment recovered and grew to 4 to 5% above the pre-recession peak in the 1970’s and 1980’s, but only about 1% above the pre-recession peak after the 1990 and 2000 recoveries.  The recovery over the past two years has been especially weak.

The U.S. labor force changed dramatically during the 1970s and 1980s.  The labor force participation rate of women increased from 43.3% to 57.5% between 1970 and 1990 but has leveled off since then.  The widespread reallocation of women’s human capital from household activities (not included in GDP) to paid market work had a profound impact on measured employment and GDP.  Employment and GDP increase, even though the same work is being done, when house cleaning and lawn care tasks are completed by paid service workers rather than by family members.

Cyclical employment fluctuations look very different for women.  The robust labor market recoveries of the 1970’s and 1980’s were fueled by the entry of women into the labor force.  Women’s employment grew by 15% between 1974 and 1978, and by 10% between 1981 and 1985, despite the deep recessions.

Job losses during recessions were largely confined to men until the 2008 downturn.  Women’s employment never fell by more than 1% in any recession prior to 2008.  In contrast, women’s employment fell by 5% between January 2008 and December 2009, and is still 4.6% below the pre-recession peak.

Future economic recoveries are unlikely to exhibit the robust employment gains that occurred during the 1970’s and 1980’s as millions of women moved from unpaid household work to jobs in the market sector.  This type of transformational change is unlikely to occur again.

The 2008 recession is unique because of the magnitude of employment losses sustained by women (although still smaller than for men) and the sluggish growth in women’s employment during the recovery.   In the past year both employment and labor force participation declined for women but increased for men.  Despite the labor market gains achieved by women over the past forty years, women face a somewhat new challenge – coping with substantial job losses in an economic downturn.