The Gordian Knot of Getting Back to Work - Alaska Permanent Capital Management

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The Gordian Knot of Getting Back to Work

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In my living memory, the women of my family have always been part of America’s labor force during their working years. 

  • My maternal grandmother received her nursing degree in 1937 and throughout her life she combined nursing with helping my grandfather run the family dairy farm. Grandpa may have been the farmer by name, but Grandma was the grease that keep things moving smoothly whether it was straightening out farmhands or stitching their injuries.  When she wasn’t on the farm, Grandma was the head night nurse at what was then Central Vermont Hospital.  Thinking back, I wonder how she found time to sleep.

  • My mother worked when I was young and placed me in the care of a woman by the name of Diana Fielder. The ceramic ornaments that Mrs. Fielder made for me still hang on my Christmas tree.  Mom took time off from full-time work when the number of boys in the King Family hit three, but she continued part-time work before returning to the full-time workforce when son #3 entered kindergarten. Mom capped her career as a special assistant to multiple Vermont education commissioners and administrator for Vermont’s State Board of Education.  The joke was that commissioners came and went, but she was a constant.  

The economic contributions of millions of women like my mother and grandmother were critical to US economic growth in the latter half of the 20th century where fully 40 percent of growth was attributable to an increase in female labor force participation.  The fact is, having women in the workforce is a defining characteristic of national wealth and the US has some work to do – if the US had a female labor force participation rate equal to Norway’s the national economy would be $1.6 trillion larger.

The 2008 Great Recession was colloquially known as the “mancession” because it affected industries where men held a higher percentage of jobs than their percentage of the workforce.  That recession was long and deep, but when jobs rebounded many long-term unemployed were eventually able to find work.  What if they hadn’t been able to return to work, not because the jobs weren’t there, but because something prevented them from returning?  What if that recession had wiped out the economic sector that allowed them to return to their previous jobs or take new ones? It’s almost impossible to conceive of this situation because what industry’s existence allows you to take a job in your chosen field? For millions of American families the answer to that question is pre-k childcare and/or the public school system. When these two industries can’t provide the services their customers need, it affects the ability of millions of Americans, disproportionately women, from participating in the labor market.

This situation is exactly what is happening right now as the COVID-19 pandemic is a perfect storm when it comes to women’s participation in the economy.

  • Women have traditionally dominated “face-to-face” and service sector jobs, both of which have been hammered as Americans avoid physical contact and cut service sector spending.

  • While men’s contributions toward childcare have increased in the past decades, women still provide the majority of child-related and household labor, and their careers are still more frequently seen as the ones to be sacrificed in the case of a lack of childcare (pre-K or not).

  • Many public schools moved to an online environment in March/April and have either stayed there, implemented hybrid learning models, or experienced intermittent outbreak-related closures. As all the parents out there know, kids don’t take care of themselves, and getting the K-6 crowd to sit for hours on end for “Zoom learning” requires adult involvement that doesn’t magically appear.

  • Because of a combination of lost wages, parents already having to be home because of school closures and fears about children catching the virus in group settings, families have been pulling their children from pre-k childcare businesses. The number of these businesses was already declining pre-COVID and remaining businesses have found their business models hammered by a drop in revenue and increased operating costs.

The implications for women, the economy and society are immense.  In September 2020, four times as many women as men dropped out of the labor force altogether (865,000 vs 216,000) and over the course of the pandemic, one in four unemployed women said they lost their employment not because they lost their job but because they lost access to childcare.  Additionally, for every woman who left or lost her job, another has cut back to part-time work.  The current estimates of lost annual wages now total between $65 billion and $180 billion dollars (or one to three times the economic value of Alaska’s annual economy).  The lost wages are just the tip of the iceberg in terms of economic effects because those wages will go unspent and untaxed depriving the economy of stimulus, businesses of revenues, and local, state, and federal governments of taxes and fees.

Parents working have always required the lucky combination of available childcare and a job.  In the COVID-19 pandemic, this combination, which we often take for granted, has become even harder to find.  Schools are either still struggling to open for in-person learning or are subject to unpredictable pandemic-related closures.  The situation in the pre-k arena is even more precarious. At the beginning of the pandemic in Alaska, just under one-quarter of surveyed childcare businesses said they were considering closing permanently due to pandemic-related challenges.  This proportion has increased by 50 percent to one third of Alaska childcare businesses in a survey conducted just last month.  This increase in likely closures comes in spite of nearly $40 million in direct aid provided by the State of Alaska and communities such as Anchorage, Juneau, Sitka, Ketchikan, Petersburg, and Gustavus.

Alaska’s families, and particularly Alaska’s mothers, face a Gordian knot of employment opportunities, in-person schooling, and pre-K childcare.  For many families, having an employment opportunity with no way to care for children could be the equivalent of no employment opportunity at all.  When Alaskans can’t take advantage of the jobs that do present themselves it reduces family income, makes the families more likely to need public assistance and slows our overall economic recovery, including slowing secondary job creation. In 2021, access to in-person learning at public schools will normalize as Alaskans are vaccinated against COVID-19. School districts face financial challenges, but they will be around later this year and the year after. However, it’s very likely that there will be fewer quality pre-K childcare options available for families which will in turn limit labor force participation (especially women’s labor force participation) and hobble Alaska’s economic recovery. The questions before Alaska include “what’s our role in helping families untangle this knot?”, “how much do we care about releasing this brake on our economic growth?”, and “what are the most effective ways for us to get all members of families who want to be working back into the workforce and in jobs that benefit all of us?”. 

Jonathan’s Takeaway:  Women’s labor force participation is a key driver of economic growth and prosperity. Alaska’s mothers and families don’t just face a lack of job opportunities; they increasingly face the risk of lack access to the services that allow them to take job opportunities.  If the questions above go unanswered, our economic growth will be slowed and will lag states that take the time to answer them.

Jonathan King is a consulting economist and Certified Professional Coach. His firm, Halcyon Consulting, is dedicated to helping clients reach their goals through accountability, integrity, and personal growth. Jonathan has 24 years of social science consulting experience including 17 years in Alaska. The comments in this blog do not necessarily represent the view of employers and clients past or present and are Jonathan’s alone. Suggested blog topics, constructive feedback, and comments are desired at askjonathan@apcm.net.

12/21/21

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