Shrinking female workforce could hurt growth
“WOMEN ARE LOOKING AT THE REALITIES OF WHAT THEY ARE GIVING UP BY GOING INTO THE WORKFORCE.”
ERICA EHM
OTTAWA — Krystyna Recoskie, expecting her third child in July, says she’s done with full-time employment.
The 37-year-old wants to spend more time with her kids, so she’s cut back her hours to a couple of shifts a week as a cardiac sonographer at the Children’s Hospital of Eastern Ontario in Ottawa.
“Some people want to be at work, but I want to be there to pick up my kid from the bus stop,” she said. “I just wish that some moms wouldn’t judge me and think that I am throwing away my career.”
The choices of women like Recoskie may spell trouble for Canada and other economies with aging workforces. In recent decades they’ve been supported by women who broke social barriers to join the labour market. Now, the longterm economic growth trend in Canada will slow because female participation in the workforce has probably crested, argues Peter Jarrett, an economist with the Organization for Economic Co-operation and Development.
“We have been living off the fact that steadily more young women were entering” the labour force, said Jarrett, who covers Canada for the Paris-based OECD. “That process looks very much to me like it’s over,” he said, calling the trend “disconcerting.”
The percentage of women ages 25 to 54 who are working or looking for work — the so-called participation rate — was 81.8 per cent in April, down from 82.9 per cent as recently as December 2012, Statistics Canada says.
While that share had risen from 52 per cent in 1976 when the agency’s records began, it has been little changed for about a decade. Female participation remains below the 90.3 per cent level for men in the same age group, Statistics Canada figures show. It also remains above the 73.9 per cent rate for U.S. women in the same age group.
Younger women are thinking differently about their career paths than earlier generations did, Carleton University economist Frances Woolley said. The pursuit of higher education and a desire to balance work and family, as well as changes in the way women and men divide household work, may be affecting how much younger women want to be in the paid workforce.
“Women’s and men’s attitudes to the labour market are in many ways formed in their 20s and early 30s,” Woolley said. “The younger cohort has a different attitude toward work than their mothers.
“People who are 22 now, they have grown up with moms who are in the labour market,” said Woolley, 50. “They don’t see how boring and economically vulnerable it is to be a stay-at- home mom; they see the stress and the challenges of balancing two careers.”
For Erica Ehm, a former broadcaster at Canada’s MuchMusic network who now runs YummyMummyClub.ca, a website about motherhood, achieving flexibility in the work world is key.
“Women are looking at the realities of what they are giving up by going into the workforce,” said Ehm, citing issues such as commuting time and the cost of daycare, which is up 40 per cent — double the pace of inflation — in the past decade, according to Statistics Canada.
Ehm “chose to take control of my work life by being self-employed rather than having a full-time job which required me to show up at work on a strict schedule.”
She has structured her company to allow staff — mainly moms — to do a lot of work from home.
Longer parental leaves help keep women more attached to the labour market in Canada than in the U.S., where the participation rate for core-age women, those aged 25 to 54, has been declining since 2008. The leave policy, and a milder recession during the global financial crisis, means Canada’s rate will stay above U.S. levels, says Tammy Schirle, associate economics professor at Wilfrid Laurier University in Waterloo, Ont., who studies women and work.
U.S. female participation fell to 17th place in 2010 from sixth in 1990 among 22 nations studied in a paper by Francine Blau and Lawrence Kahn of Cornell University in Ithaca, New York. Canada was tied for ninth with the Netherlands. The U.S. government requires companies employing more than 50 people to offer 12 weeks of unpaid parental leave under a 1993 law. Canada expanded paid benefits that can be claimed through the national unemployment insurance program by either parent to a maximum of 104 weeks in 2010.
While female Canadian participation rates are higher than in the U.S., they have stopped growing. Years of women joining the workforce in greater numbers meant that Canada kept adding to its supply of labour, and expanding its economic potential — the amount the economy can produce without sparking inflation.
With female participation stagnating, potential growth isn’t rising as quickly, which means the economy will hit its capacity limits sooner and the Bank of Canada will need to raise interest rates more quickly to keep inflation in check. Canada’s central bank has said the potential growth will be 1.9 per cent in 2016, down from about three per cent in 2000.
The levelling off in participation by core-age female workers is exacerbating the impact of retiring baby boomers and a rise in youth unemployment since the last recession. “The economy won’t grow as quickly” as a result, the OECD’s Jarrett said. “It’s important people recognize these impacts for longterm planning.”