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National NOW Times >> Spring 2002 >> Article

Current Economic Downturn Hurts Women

by Monica Martinez, Field Organizer

The events of September 11 accelerated an already sinking U.S. economy and a rising unemployment rate. Women, already at a disadvantage due to the wage gap and the ongoing struggle for equal opportunities, are sure to suffer the brunt of this drastic blow.

With the 5.8 percent unemployment rate in December 2001 the highest in nearly a decade, the strong U.S. labor market of only a year ago is quickly becoming history. Over the last year, the number of unemployed persons increased by 2.6 million and the unemployment rate rose by 1.8 percentage points. While some analysts believe economic recovery is in sight, the downturn has already left its mark on many workers.

NOW Activists call for an economic stimulus plan to help low-wage and laid-off workers, not just big business. Women represent the majority of employees in industries hit hardest by the slump. And according to the AFL-CIO, the statistics may underestimate the real unemployment rate because workers in industries such as hospitality are often not formally laid off—instead their hours are cut back to next to nothing.

Once unemployed, women tend to be affected more severely. Unemployment insurance in most states is not available to part-time workers, and women make up more than two-thirds of the part-time work force. The Bureau of Labor Statistics reports that the number of people working part time despite their preference for full-time work rose over the last year, from 3.2 to 4.3 million.

According to the Institute for Women's Policy Research (IWPR), only 34 percent of unemployed women in 2000 were eligible to receive unemployment benefits, compared with 40 percent of unemployed men. Also, women's average unemployment benefits were just $194 a week, while men's average weekly benefits were $241.

Unemployment among women can also be particularly devastating to families, because single women are more likely than single men to be working parents. According to the IWPR, the unemployment rate for female heads of households, which has steadily increased since March 2001, is an astonishing 8.3 percent. Because women make up 60 percent of low-wage workers living from paycheck to paycheck, many women and their families will be unable to weather the hard times ahead without assistance.

The economic downturn comes at a particularly tough time for former welfare recipients, many of whom are women who depended on the service industry as a source of entry-level jobs. The 60-month time limit imposed by the welfare "reform" law of 1996 is set to expire for many aid recipients, and job opportunities are becoming more scarce.

While welfare caseloads declined dramatically since 1996 and former recipients are earning an average of $7 per hour, for most families the move off the welfare rolls has not automatically translated to moving out of poverty and into economic stability. According to the Economic Policy Institute, former welfare recipients and their families experience high rates of hardship.NOW Activists call for an economic stimulus plan to help low-wage and laid-off workers, not just big business.

This recession will present particular challenges to former welfare recipients who entered the workforce, but then were not able to pull themselves out of poverty. For those who become victims of this recession, a weakened, inadequate safety net will be the only protection.

Perhaps most alarming is the Bush administration's failure to design an economic stimulus package that will provide enough of a cash influx to revitalize the stagnant U.S. economy. The recently-renamed economic "security" package the president is trying to push through Congress is replete with tax breaks for corporations and the wealthy that many economists agree will have little short-term effect on the economy.

Instead, Bush's plan will only further deplete the almost non-existent budget surplus, while giving little to low-income workers and the unemployed, people who are most likely to spend the money quickly and send it back into the economy.

NOW has called for a stimulus plan that will include increased spending and tax rebates for low- and moderate-income individuals. Analysts believe these measures would result in more immediate cash inflows to the economy.

Women would be especially hurt by proposals that further erode the budget surplus. Without the anticipated surplus, Social Security and Medicare will be in jeopardy, and so will the well-being of many aging and elderly women who depend on them.

"The economic expansion that recently ended did little to improve the economic outlook of moderate and low-income families, particularly those headed by women," said Olga Vives, NOW's Action Vice President. "And now, many women face cutbacks, lay-offs and a ticking welfare clock. Our elected officials and representatives must work to help these women out of poverty and into the middle class."

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