The Labor Force
Participation Rate for Men in 1950 was 87% and for Women was 33%. The
participation rate for Men steadily declined from 87% to 76% over the next 70
years. The participation rate for Women
rose from 33% to 60% over the same 70 years.
The Labor Force
Participation Rate for Men and Women has been quite different over the past 70
years. Prior to 1940, 30% of Women
worked because they were poor or single or just wanted to work. The Great
Depression had taught most US citizens to be more careful with their money.
In 1940, women started
to take factory jobs in defense industries. In 1941, women took even more of
these jobs, because the men were entering the military to fight in World War
II. The war ended in 1945 and the men came home, got married and had kids. Many women became housewives and mothers.
They worked in offices, as teachers and nurses and had other jobs.
In the 1950s and
1960s, you could finish high school and get a job in a factory, get married,
buy a house and start a family, but many of those who did this were in for a
rude awakening later. By 1980 you needed
a trade school or college background to do that.
The Women’s Movement
started in the 1960s and was the indoctrination campaign designed to get women
riled up about going to work. This was needed, because the US federal
government was increasing government spending and didn’t want to have to pay
off their debt. Instead they decided to debase the currency and have the
citizens pay it off with “inflation”. Unions were strong, productivity was weak
and taxes were high. Voters were ignorant and politicians were not motivated to
correct their mistakes.
The Vietnam War
brought men back into the US Military from 1965 to 1975.
In 1970, more women
went to work because household incomes were not keeping up with inflation. By
1970, the participation rate for Men was 80% and for Women was 50%.
In 1980, high
inflation and low productivity convinced US voters to elect Ronald Reagan, who
cut regulations and lowered taxes. At the time, US electronics companies were
about to introduce the PC and revamp telecommunications. This created
economically viable projects that would drive the US economy from the 1980s
through 2000.
In 1990, computers
were being used to increase productivity and reduce costs. Men were typing
their own letters and Secretaries became Clerks and Analysts. Inflation had
settled back to 4%, but living costs had already risen. See article below:
Labor
Force Participation Rate is a Tale of Two Genders,
Labor Force
Participation Rate: Men (Percent, Seasonally Adjusted) – The participation rate
for Men in 1950 was 87%. By 1985 it was 76%.
Many
observers will be focused on tomorrow’s jobs numbers as they wonder aloud if,
when or even how much the
Federal
Reserve will raise interest rates. My own best guess is that short of another
blowout number — 250,000 or more jobs added — the Fed will likely wait until
December, if only to avoid any appearance of trying to tilt the election.
Tomorrow,
I will be looking specifically at the labor force participation rate. It has
seen some modest recovery from the lows of last year in recent months, and that
could be a sign of the end of a secular cycle. Or it could just be ordinary
noise in a volatile data series.
Over
the years, I have written about an interesting aspect of the employment data:
what I call NILF (I’m typing carefully here), or not in the labor force. It
describes those workers who have dropped out of the labor pool.
The
impact of people leaving the labor force tends to lower the official
unemployment rate. When the denominator is smaller and the numerator remains
unchanged, all else being equal, the outcome is a higher percentage of employed
and a lower percentage of unemployed.
This
isn’t necessarily a sign of economic health. No wonder certain politicians love
to focus on this data point as proof that the U.S. is on the wrong track.
Why
leave the labor force? It’s more than mere economics — demographics play a
large role, along with wages, technology and globalization. It could be that
the type of work you do no longer exists, and it isn’t worth taking a much
lower-paying job. Much of the time, people leave the labor force for things
like going back to school, having kids, retiring or going on disability. And, of course, mortality is
constantly taking people out of the labor market.
But
there is an unusual confluence of forces at this particular moment that makes
tomorrow’s nonfarm payroll number more interesting than usual. So let’s take a
closer look at the number I find most interesting.
The
labor force participation rate since World War II tells a muddled tale. For
sure, cultural changes are reflected in its rise and fall. However, the total
rate obscures the full story.
To
unpack some of the details, we must break the rate into two parts: men and women in
the workforce. A good conceptual starting point is Rosie the Riveter: Women went to work in great numbers
during World War II, including in traditional male jobs such as heavy manufacturing. Perhaps that helped change views on
women in the workplace. But it wasn’t until the 1960s that women began entering
the work force in great enough numbers to raise their participation rate. You
can surely credit the rise of feminism and improved
contraception as factors, but there are no doubt many others.
As
the chart below shows, participation rates for women in the early 1950s were
less than 35 percent. But beginning in the mid-1950s, it climbed, passing 40
percent by 1966, 50 percent by 1978 and more than 55 percent by 1986.
Participation rates for women plateaued at 60 percent in the late 1990s and
since fallen slightly to a little less than 57 percent.
Big Gains, Then Blah - Labor force
participation rate of women, age 16 and older – In 1950, the participation rate
for Women was 33%. By 2003 the rate had risen to 60%.
Source:
U.S. Bureau of Labor Statistics via Federal Reserve Bank of St. Louis
Men’s
participation rate tells a very different story, as you can see from the next
chart. It is noteworthy that since it peaked in 1949 at 87 percent, the labor
force participation rate for men has been falling ever since. Keep this chart
in mind when you hear pundits talk about angry male voters. The forces behind
this have been building for a long, long time.
Source:
U.S. Bureau of Labor Statistics via Federal Reserve Bank of St. Louis
There
have been five notable periods when the rate of men leaving the labor force
has accelerated. Each time was marked by a significant
recession. The rate today for men hovers at about 69 percent, a 70-year low,
and only some 12 percentage points higher than women.
Which
leads to one observation: Maybe we’re getting closer to some kind of economic
and social parity between the sexes. That range, or maybe somewhere
in the middle, reflects a form of workplace gender balance. Is this narrowing
difference reaching its end point? Does the male-female participation gap
reflect anything other than women leaving the work force to have children? I
have not seen hard data on that, but perhaps fresh numbers might help us
determine what has driven the trends of gender participation rates.
One
final observation: It looks like women’s participation rates have found
equilibrium. Let’s hope that the same can be said of men.
1.
A quick primer on how the participation rate is calculated: Unemployment is a
percentage, meaning it is actually a fraction. Total number of people in the
labor pool divided by total number of employed equals employment rate. Subtract
the percent employed from 100 to get the unemployment rate.
Originally: A Job-Market Tale in Two Charts - See charts in original article at:
Norb Leahy, Dunwoody
GA Tea Party Leader
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