UAHuntsville economist addresses women’s employment outlook, stresses education

HUNTSVILLE, Ala. — The latest employment numbers for working women can best be described as a mixed bag, but a silver lining looms for women — especially if they have earned one or more college degrees, according to Dr. Wafa Orman, economist at The University of Alabama in Huntsville.

Orman said recent reports highlighting the “disappearance of women’s jobs” are not breaking news. “This is first and foremost a story about education — more than any other single factor it’s about economic inequality,” she pointed out. “I cannot overemphasize the importance of education from pre-school through college in building a skilled labor force and a strong economy for everyone — men and women. Sacrificing education is the most short-sighted thing we could possibly do.”

In fact, Orman said, women never had the huge spike in unemployment rates like men. But, she noted, that women haven’t recovered from job losses either. The recent statistics, she said, are a little more complicated.

“This is due to the nature of the recession and the different industries that men and women tend to work in. The unemployment rate for men over 16 is 8.4 percent —still higher than that for women over 16 at a rate of 7.9 percent.”

Orman said the economic bubble burst started with the housing decline of 2007. The downturn created massive construction layoffs that quickly spread to the manufacturing industry, causing the loss of hundreds of thousands of jobs in two of the most male-dominated employment fields. She said the two industries tend to be more volatile at all times, but noted manufacturing has recovered well, and the sector is experiencing a big drop in male unemployment.

“Women, on the other hand, tend to work in service professions, education, and health care,” she noted. “Women are more dramatically affected by government cutbacks, which have been severe, since the stimulus ended in 2010. They are also less volatile than the professions men work in, which means that while positions are not eliminated as easily, they don't recover as rapidly either.”

Orman said the recession has been “pretty catastrophic” on the many single women supporting children. “Almost a third of households headed by single others are living in poverty. Unemployment rates are always higher for minorities and those without college degrees, and the recession has amplified these disparities. The sad fact is that a very large proportion of single mothers are in one or both of those two categories.

“This is largely due to the fact that they started out with large disadvantages — less education, racial/ethnic discrimination, not to mention the tremendous hardships that come with trying to raise children on one's own. Even divorce rates are lower for women with college degrees.”

While most of the jobs women lost were federal, educational, state and county positions, Orman said the situation varies by state.

“A bloated public sector in California is driving the state to bankruptcy, and taxes are already among the highest in the country. States like Illinois and Rhode Island are in similar situations. No one will benefit from excessive taxes and a government that cannot pay its bills,” Orman explained. “Alabama, on the other hand, is not in that position. Public services are at a bare minimum and it shows in our abysmal education and health statistics.”

She added too, that a recession is a bad time to cut hiring of any sort, or to shed workers. “The time to trim public services if needed is when the economy is doing well. “

Orman said despite a slow economic recovery and news of abolished jobs, the vast gains working women have made over the years will not cause them to lose ground. “Not in the least. On the contrary, over the long run I am quite optimistic about women — it's men that I worry about over the 20- to 30-year horizon. More women graduate college now than men do. And, as our economy becomes more and more a ‘knowledge economy,’ we are going to see the gap in earnings between the educated and the less educated widen even further.”

In fact, Orman said, college-educated women under 30 actually earn more than comparably educated men their age. “The gap in earnings only opens up after 30, when most women have children and start working part time or shift to less demanding jobs to devote time to their families. Women may earn 77 cents on average for every dollar a man earns, but that average is a very misleading statistic,” she pointed out. “Most women work fewer hours, at less risky or unpleasant jobs. When you account for these choices, women earn 91 cents for every dollar a man earns, and for college-educated women there is almost no gap at all,” she explained.

Orman offered women some sage advice on being less vulnerable and more marketable in today's economic climate.

“Study hard. Go to school, continue on to college, and pick a major that is in demand,” she said. “Don't be afraid to study science and engineering because they are male-dominated. Don't be afraid of math and don't fall into the trap of stereotypes. Be assertive in the workplace — work hard, make sure your bosses know your worth, and ask for raises.

“Remember everyone is vulnerable in this economy, but those who add exceptional value to their firms are much less so. Remember to save money and ‘pay yourself first.’ Debt is a trap that's much too easy to fall into, and it leaves you too vulnerable to shocks,” she added.

Orman said women should celebrate the gains they have made, and provide the right educational foundation for everyone — men and women to maximize their potential. “If some women choose time with their families over higher earnings — those are choices made out of love. As a mother myself I celebrate the ability to make those choices.”

Orman is an assistant professor of economics at UAHuntsville’s College of Business Administration. She is a labor economist with research interests in human capital issues and open source software.

Orman has written and published numerous articles; the most recent entitled "Giving It Away for Free? The Nature of Job-Market Signaling by Open-Source Software Developers," published in Advances in Economic Analysis and Policy, by Berkeley Electronic Press.

She received an undergraduate degree in commerce and a master’s degree in economics from The University of Mumbai (Bombay) in Mumbai, India. Orman earned a second master’s degree and a Ph.D., in economics from The University of Arizona.

For more information:
Joyce Anderson Maples
256.824.2101
maplesj@uah.edu