It is well known that, since the 2008–09 financial crisis, U.S. labor force participation has steadily declined for both men and women. In fact, a recent report from the U.S. Federal Reserve forecasts that it will plunge to 61 percent by 2022, the lowest level in 30 years. Beneath the top-line number lies an even more ominous trend. Female participation in the American work force has been steadily declining since well before 2008. In fact, that figure has been falling since 2000, despite the fact that female participation among other OECD nations has steadily risen.
Although American women enjoyed the sixth highest rate of labor force participation out of 22 OECD countries in 1990, by 2010 the ranking had plummeted to 17. There are several reasons for what the report calls the “stunning reversal.” For one, the United States is the only OECD country without universal paid maternity leave. And according to a study by the International Labor Organization, the United States and New Guinea are the only two countries out of 170 for which data were available that do not provide cash benefits of any kind to women on maternity leave.
In the United States, under the 1993 passage of the Family and Medical Leave Act, workers can take up to 12 weeks of unpaid temporary or medical leave (which includes childbirth, often called “disability leave”). The cap on leave has remained the same since then, yet between 1990 and 2010, other OECD countries actually expanded coverage for new families, including through more generous paid leave and subsidized child care. Over the same period, female labor force participation rose in the other OECD countries and declined in the United States.
The decline represents a significant loss of productivity. Heidi Shierholz, the chief economist for the U.S. Department of Labor, has estimated that if American women between the ages of 25 and 54 participated in the labor force at the same rate as in Canada or Germany, which have paid leave and other pro-family policies, at least five million more women would be in the more than $500 billion of additional economic activity per year in the United States.
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