The numbers don’t add up. The U.S. has lost a net of 3.9 million jobs since the start of the pandemic. Women held 2.3 million, or 58.2%, of those jobs. American families depend on women for their economic security. So how are they surviving when millions of women are out of work as a result of the pandemic?
Over the past five decades, the share of breadwinning moms has increased by 166%. Today, women are the breadwinners in 40% of U.S. households with children, and 71% of families in our country rely on moms’ earnings for their well-being.
The dependence on moms’ wages increases for Black households. Since 1982, more than 51% of all Black households with children under the age of 18 have been headed by breadwinner moms. Within this 51%, 37 percentage points represent households where the mom is the sole breadwinner.
Despite an optimistic November jobs report, the adult women’s labor force participation rate remains blunted at 57.5%—well below pre-pandemic levels. In fact, it’s worse than pre-pandemic levels. Our economy is operating the way it did more than three decades ago in terms of labor market equity. Where are all the women workers? If not in the formal labor force, could they be hiding in the informal labor market?
The pandemic and the informal workforce
Emerging studies suggest women retreated to the informal workforce during the pandemic. When they were pushed out of the formal workforce, “disguised employment” opportunities presented a viable margin of survival for women and the millions of children who depend on women for their economic health.
Airbnb, for instance, released research in May showing how female hosts have earned more than $1 billion on the platform since the start of the pandemic. The study also revealed higher percentages of female hosts compared to male hosts who use the platform to “make ends meet,” and “stay in their home.”
Airbnb is one of many informal avenues women can pursue to secure their economic livelihoods. In their book, Making Ends Meet, authors Kathryn Edin and Laura Lein interviewed nearly 350 low-income mothers and found that all except one rely on informal work—such as cleaning homes, nannying, performing yard work, and collecting recyclables—to scrape by. And in many cases, they’re barely scraping by.
Poverty levels skew female. This was true before the pandemic and it is true now. Of all female-headed households, more than one-third live in poverty. That’s more than double the rate of male-headed households and nearly six times the rate of married-couple households living in poverty. Women are also twice as likely as men to live in poverty during retirement.
Persistent hardship marks the presence of informal employment
The pandemic aggravated the economic distress of households across the country. Despite COVID-era relief packages, millions of Americans are still wading in economically precarious waters. While 35% of men say their financial situation has improved in the past year, only 25% of women agree. The most recent estimates show that at least 10 million children have a family member who, owing to the pandemic, is not receiving a formal paycheck. Perhaps that explains why 6% of children in white households, 17% of children in Black households, and 16% of children in Latino households have gone to bed hungry in the past week because they can’t afford food.
It’s this type of hardship and poverty that signals the prevalence of an informal economy.
Structure of the informal labor force limits research opportunities—and economic growth
The nature of informal work makes it challenging to represent quantitatively—given our current population sampling tools, at least. However, the corroborating evidence cited above suggests many Americans, especially women, may have turned to informal work during the pandemic. Without more robust data collection, the informal labor force will continue to be a blind spot. And that’s a problem not only for women but also for the economy at large.
The costs of such data deserts stretch into trillions of dollars. Inadequate information about how the economy is working for half of the population—women—robs us of the $3.4 trillion opportunity of gender equity in the US.
As it stands, potentially millions of women and their households are invisible to public policy officials. That means resource allocation fails to account for the unique experiences of informal laborers, who are disproportionately women. Failure to account for these individuals produces negative externalities that ricochet throughout the economy. Those who need the most help don’t receive it; the tax base shrinks; consumer spending drops, and dependence on social welfare programs grows. We must not only improve data collection to capture the informal labor force in the U.S., but we must also use that information to inform policy decisions that incentivize people into formal employment.
The $3.4 trillion economic opportunity of gender equity
Women are 51% of the population. It doesn’t make economic sense to ignore them. Since 1970, women have added $2 trillion to the U.S. economy by increasing their participation in the paid labor force—and there’s still room to grow. If we closed the gender gap in formal labor force participation, we could expand our economy by another $789 billion. And if we closed the gender pay gap (something that won’t transpire under informal working conditions), we could amend $512 billion to that estimate.
Overall, achieving gender equity across all domains of life—at work, in politics, and on the homefront—represents a $3.4 trillion economic opportunity in the U.S. The economy needs women and women need access to formal labor market opportunities to support themselves, their households, and their communities.
Katica Roy is the CEO and founder of Pipeline Equity.