By DAVID MOON, Moon Capital Management, LLC
April 6, 2014
This is some new stuff I’m adding to see if this package works.
The racial differences in the US employment markets is well-discussed and well-known. Caucasian unemployment is currently 5.8 percent, while 12 percent of African Americans are out work. Among black teens, unemployment is 38 percent.
Those relationships are as troublesome as they are familiar.
Just as troublesome—but more subtle—are the changes in the gender employment trends in the past few years.
The recovery following the recession of 2008 has been a man’s recovery.
58.6 percent of the adult population (not the self-identified labor force) is currently employed. That is, 41.4 percent of adult Americans are retired, intentionally unemployed, looking for work or hiding from bill collectors.
In 2006, before the recession, 63.4 percent of adults were employed.
But look at the changes by sex.
The percentage of adult males in the US with jobs has fallen from 70.1 percent in December 2006 to 63.5 percent, after reaching a low of 62.1 percent in 2012.
The drop in female employment as a percentage of the population was never as drastic (from 57.4 percent in 2006 to 53.6 percent today,) but there has been practically no recovery in female employment.
Men have tended to leave, then reenter the workforce in approximate parallel with changes in GDP. As the economy has grown in the past two years, however, unemployed women have tended to remain unemployed.
Economists at Pantheon Macroeconomics believe this is because women represent a disproportionate share of employment in government and small business—two areas hit hardest by the recession and slowest to improve.
Women comprise more than 70 percent of all social workers, teachers and many other government employees.
Even since the recovery began in earnest, female employment as a percent of the total female population has continued to decline.
Beginning our analysis before the recession is no more promising. From 2006 to 2013 the number of adult women in the US increased by 9 million people, but female employment only increased 600,000.
At least two factors continue to present headwinds to female employment: increased overall productivity (which affects both males and females) and state/local government finances.
Since 2006 business productivity per employed worker has increased 27 percent, from $94,900 to $120,300. Businesses are doing more with fewer people. With capacity utilization still well below pre-recession levels, it is difficult to see that trend changing soon.
Since December 2010, private sector employment has increased 6.2 percent, from 107.8 million to 114.52 million people, but public sector employment has declined 3 percent. This category includes the teaching and other government jobs that are dominated by women.
Will the government and teaching jobs return?
It is going to be hard. Consider Knoxville, for example. From 2006 to 2013 total General Fund revenues increased 8.2 percent. Because of the rising costs of health insurance and retirement benefits, total payroll costs increased 19 percent, despite a decline in the number of employees.
The City of Knoxville is not about to embark on a hiring spree, and neither are any other municipalities.
David Moon is president of Moon Capital Management, a
Knoxville-based investment management firm. This article
originally appeared in the News Sentinel (Knoxville, TN).