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.

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