The Pandemic’s Toll on Minority Women in the Labor Force

Introduction

After a sudden and severe contraction in economic activity last year, economic recovery is well underway, with real GDP now exceeding its pre-pandemic level. The economic recovery has led to strong overall demand for labor. However, the employment recovery is lagging the rebound in real GDP. According to the Bureau of Labor Statistics, as of August, national payroll employment is down 5.3 million jobs compared to before the pandemic, despite a record number of job openings. Many individuals who were employed prior to the pandemic have left the labor force altogether. The labor force, which counts the employed plus the unemployed actively looking for work, is down 2.9 million from its pre-pandemic level.

Labor force recovery is occurring at different paces for subsets of the population. Overall, since the pandemic began, the number of women participating in the labor force is down more than the number of men participating in the labor force. Among Black and Hispanic populations, this gender disparity is especially large. This post examines the disparities in labor force participation between men and women of color, both nationally and within the Fifth District.

Gender Disparity in Labor Force Participation

Women have tended to have lower labor force participation rates than men, regardless of economic conditions. In the five years prior to the pandemic, women’s labor force participation rates had been rising. During that time, the labor market was very strong, and the unemployment rate reached a 50-year low, bringing more women (and men) into the labor market. Then the pandemic took its toll, causing female labor force participation to drop to mid-1980s levels.

As shown in the chart below, the total adult labor force dropped 4.4 percent at the beginning of the pandemic (February 2020 to April 2020). The number of men in the labor force dropped 4.1 percent, and the number of women in the labor force dropped 4.8 percent.

Labor force participation has been gradually recovering for both men and women. As of August, the numbers of men and women in the labor force were still down 1.5 percent and 2.2 percent, respectively, from February 2020 levels.

Note: Labor force data are presented for civilian individuals over age 20 in all charts.

The Intersection of Race, Ethnicity, and Gender

People of color in the labor force were especially hard hit by the pandemic. From February to April 2020, the Black labor force and Hispanic labor force fell 6.5 percent and 6.2 percent, respectively, compared to 4.2 percent for whites. Despite these sharp declines in 2020, the Black labor force and Hispanic labor force have recovered more than the white labor force in 2021. (See chart below.) As of August, the white labor force remains 2.1 percent below February 2020 levels, compared to 1.2 percent for Blacks and 0.6 percent for Hispanics.

Note: Throughout this post, white and Black population categories also include Hispanic individuals who identify as either race.

However, when we layer in gender, we see significant disparity between Black and Hispanic men and women — men are entering the labor force more rapidly. Since February 2020, the labor force for Black men is up 0.1 percent, whereas the labor force for Black women remains down 2.4 percent. Likewise, the labor force for Hispanic men is up 1.6 percent, while the labor force for Hispanic women is down 3.5 percent. Black and Hispanic men may be choosing to participate in the labor force based on the availability of jobs with relatively high wages, especially in the transportation, warehousing, and construction industries. In the longer term, the growth in Black and Hispanic male labor force is partly attributable to demographic factors, such as the strong representation of Generation Z Black and Hispanic individuals relative to older generations.

Explanation for Women of Color

Nationally, Black and Hispanic women are not sharing in the recovery of labor force participation. This sluggish recovery is both a consequence of industry employment trends and caregiving responsibilities. The effect of child care responsibilities on women’s labor force decisions has been well-documented and discussed, so here we focus on how COVID-19 and the subsequent recession have affected industries where Black and Hispanic women were more likely to hold jobs prior to the recession.

Both nationally and within the Fifth District, Black and Hispanic women were more likely to work in the accommodation and food services, education, and health services sectors, as seen in the table below. The intensity of job losses in these sectors, coupled with the prevalence of Black and Hispanic women working in these sectors, likely contributed to their large drop in labor force participation at the onset of the pandemic.

Source: U.S. Census Bureau American Community Survey Public Use Microdata Set, 2015-2019 5-Year Estimates

Note: These statistics are based on employed civilian individuals over age 20.

Although we do not have estimates of monthly, seasonally adjusted labor force data by race, ethnicity, and gender at the state level, we can look at demographics and state payroll employment by industry to infer minority women’s participation in the labor market.

The Fifth District is home to a relatively large number of Black individuals and a relatively small number of Hispanic individuals. Black residents of all ages account for 22.6 percent of the Fifth District population, compared to 12.3 percent of the national population. On the other hand, only 7.1 percent of Fifth District residents identify as Hispanic, compared to 16.9 percent at the national level. Because of these differences, we can expect labor force participation trends among Black individuals to be more pronounced in overall Fifth District trends, and Hispanic labor force participation trends to be more muted.

As shown in the chart below, employment in the accommodation and food services, education, and health services sectors has yet to return to pre-pandemic levels nationally and within most Fifth District states. Compared to the nation, Fifth District states tend to be doing worse in job recovery across these industries. The notable exceptions are the educational services sector in the District of Columbia and South Carolina, where employment now exceeds February 2020 levels.

Note: The figures in this chart only reflect employment trends for privately owned establishments. Government-employed individuals working in these sectors, to include those working in public education, are not represented.

Relatively low employment in these industries may be partly due to Black and Hispanic women’s reluctance to return to the labor force. Essential workers, especially those in education and health care, have experienced burnout resulting from constantly shifting workplace polices, prolonged exposure to health risks, and high stress customer interactions. While states begin to mandate vaccines for employees, we may see Black and Hispanic women’s labor force participation remain low, as vaccination rates among Black and Hispanic populations lag those within the white population.

Conclusion

Labor force participation took a hit during the pandemic, with disparities emerging between men and women, particularly within racial and ethnic subgroups. On average, Black and Hispanic women experienced a larger decline in labor force participation than Black and Hispanic men nationally. This is largely because Black and Hispanic women are overrepresented in hard-hit sectors and bear a larger share of household responsibilities relative to Black or Hispanic men. While labor force participation continues to recover, women of color have the largest strides to make.

Encouraging women to rejoin the labor force is essential as firms aim to return to pre-pandemic employment levels, but there are challenges, including finding child care, increasing vaccine comfort, and reducing skills mismatches and job preferences. As a result of the pandemic, employers have a chance to reassess company culture, increase workplace flexibility, and invest in infrastructure to support child care needs and hybrid working models: a significant benefit to women.