Today’s labor market numbers from the Bureau of Labor Statistics showed that the slowdown in the labor market indeed continued. Employers hired an additional 130,000 workers in August, boosted in large part by temporary hiring from the federal government for the 2020 Census.
Private-sector jobs expanded by only 96,000, continuing the trend of much slower job growth that has characterized the labor market since the second half of 2018. As a result, total monthly job growth so far in 2019 averaged 158,000 compared to a monthly average of 223,000 in 2018.
The continued slowing labor market is worrisome for those who are particularly vulnerable to a downturn in jobs, but who also face greater pressures to work because they have fewer savings that can buffer an economic shock. This is the case, for example, for older women.
Older women’s savings are much lower than they are for men as they approach retirement. Among near-retirees, those aged from 55 to 69 years and who are not yet retired from 2010 to 2016, single women had median total wealth, including the wealth held in DB pensions, of $98,684 (in 2016 dollars) compared to $153,483 for single men – a gap of $54,799 dollars.
Importantly, single women had a median wealth-to-income ratio of 289% compared to single men’s 428% during that same period. The wealth gap by gender does not follow from lower incomes.
These aggregate numbers mask crucial variations among women and men. Women who were never married had the lowest median wealth with from 2010 to 2016 with $74,057, followed by divorced women with $101,899 and widowed women with $109,368 during those years (see figure below).
While single women always have less wealth than single men, regardless of their marital status near retirement, widowhood and never having been married show the largest gender gaps.
These differences by marital status ultimately translate into a higher chance of poverty for women at older ages. Poverty goes up as people get older and this particularly impacts women.
In 2014, 14.9% of women 80 years old and older were poor, while only 7.9% of men were. And a lot of older retirees have incomes just above the poverty line.
Among women, 24.1% had incomes of less than 125% of the poverty line in 2014, compared to only 13.5% of men fell. Singlehood makes a bad situation worse for women, while only divorce appears to lower men’s wealth (see figure above).
Women then face more pressures to stay in the labor market at older ages to offset their lower wealth. Yet the employment to population ratio for women 55 to 64 years old and older is a lot lower than that for men.
The average employed share for women from 55 to 64 years over the past six months – to control for seasonal fluctuations – was 57.6% compared to 69.9% for men.
The weakening labor market is already making it harder for older women to work. Their six-month average employment-to-population ratio reached a high of 58.3% in April 2019 and has declined since then.
At the same time, the employment-to-population ratio for men 55 to 64 has continued to go up. As is often the case, a softening labor market impacts more vulnerable populations more than others.
When older women decide to work, they also earn a lot less than men. The median weekly earnings for women 55 years to 64 years old working full-time was $869 between March and June 2019, compared to $1,158 for men at the same time.
Those wages have fallen for both men and women since the end of 2018, when they stood at $1,191 for older men and at $895 for older women.
Employment opportunities for older workers are eroding amid a weakening labor market and they do so faster for older women than for older men.
Since current near-retirees have often less wealth for a secure retirement than previous generations, for instance, due to higher levels of debt, they now depend more on working longer to make up for those shortfalls. Older workers, alongside other vulnerable population groups like African-Americans, need to see a return to a much stronger labor market to regain real economic security.