Fahima Aziz
Hamline University
In the past fifty years, the American workforce has evolved significantly in its composition and in the participation rates. The appearance of married women as a sizeable part of the labor force, a rapid increase of racial minority population in the workplace, and an aging population, especially the baby boomers, have all attributed to the changing trends in labor market. Given the current financial crisis, which is considered the most severe since the Great Depression, and the extent and seriousness of the crisis, it is important to both analyze the short-term cyclical effects and long term effects on the labor market and its consequences on families and individuals with a gender perspective.
In December 2009 the U.S. unemployment rate was 10.0 percent, about 15.4 million people, slightly above the European one, which is 9.7 percent. The unemployment rate in some sections of the U.S. surpassed 25 percent. In December 2009, unemployment rates were 10.2 percent for adult men, 8.2 percent for adult women. For single mothers the unemployment rate stands at 13 percent. The number of long-term unemployed continues to increase, reaching 6.1 million in 2009, and four out of ten unemployed workers were jobless for 27 weeks or longer.
In the U.S., the gender unemployment gap is the most disproportionate since 1948. According to the Bureau of Labor Statistics (BLS), male unemployment rates reached 10.2 percent in December 2009, and for women, the unemployment rate hit 8.2 percent in December 2009. According to the BLS, the number of discouraged workers increased from 642,000 in December 2008 to 929,000 in December 2009. In December 2009, approximately 2.5 million workers were marginally attached to the labor force. When one includes part-time workers who were unable to find a full-time job along with discouraged workers, the job deficit exceeds 20 million in the U.S.
The current recession will exacerbate both wage differentials and poverty levels in the economy. In 2008, real median earnings for full-time, male workers declined by 1 percent from $46,846 in 2007 to 46,347 in 2008. Real median earnings of full-time female workers declined from $36,451 in 2007 to $35,745 in 2008, a decline of 1.9 percent. The poverty rate for 2008 was 13.2 percent, the highest level since 1997 and was the first statistically significant increase since 2004. Mean real U.S. household income decreased by 3.6 percent from 2007 to 2008 from $52,163 to $50,303.
I will discuss the effects of the crisis by analyzing the short-term socioeconomic effects of high unemployment, growing number of discouraged and part-time workers in the U.S. labor market. To examine the cost of being unemployed, I estimate the probability of being poor by employing a probit model using U.S. Census microdata; other explanatory variables included in the model are gender, race, marital status, education, health insurance, and unemployment compensation. The final section will offer concluding observations and policy recommendations.