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Sunday, October 17, 2010 12:32 PM

Reluctant Breadwinners, Downsized Housing; Demographic Pendulum in Motion

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Because of losses in construction and manufacturing, unemployment has taken its toll on more men than women. Please consider More Wives Head for Work

Angela Patterson is working as an insurance agent in New York while her husband looks for construction jobs in North Carolina. Diana Gomez had been staying home to care for an ill daughter. When her husband lost his job, she became an administrative assistant in a dentist's office. Michelle, a social worker and mother of three young children in Baltimore, who asked that her last name not be used, switched from part-time to full-time work when her husband was laid off last year. She kept to that schedule after he found work earlier this year—at two-thirds his former salary.

They are the reluctant breadwinners: Women who wanted to stay home until their income suddenly became critical to the well-being of their families. In some cases they are increasing their hours to keep the bills paid. Others are taking up employment for the first time as their husbands struggle to find work. With the anemic recovery keeping the job outlook uncertain, the accelerated gender shift is likely to stick, creating new challenges for U.S. families.

In a study published this September in the journal Family Relations, researchers Marybeth J. Mattingly and Kristin E. Smith of the University of New Hampshire found that wives were more likely to enter the job market or increase their hours when their husbands were out of work between May 2007 and May 2008 than when their husbands were out of work amid prosperity four years earlier. These women were also three times more likely to enter the labor force than women whose husbands were working and 51 percent more likely to increase their hours. Smith says difficult times may push women to take jobs they wouldn't consider when the economy is strong. "They have to work," she says. "As families lose their primary breadwinner, they're making ends meet with a lower-earning spouse."

By now, the impact of the recession on the American male is well chronicled: Men accounted for more than 71 percent of the job losses as sectors like manufacturing and construction were crushed. Even when job losses spread to traditionally female-friendly areas like retail and education, women continued to fare better. The latest unemployment figures stand at 9.8 percent for men 20 or over and 8 percent for their female counterparts, with women making up 47 percent of the total labor force.

The recession has accelerated a trend that first became apparent years ago—wives entering the workforce to boost family earnings. The difference now is that what might have been viewed as optional income has become critical. As Manpower (MAN) Chief Executive Officer Jeffrey A. Joerres points out, "the reality is that Joe is not finding a job anytime soon."
Daily Femme Chimes In

Ashleigh, writing for The Daily Femme takes issue with the story in her commentary Are we “reluctant breadwinners”?
Am I the only one who feels like this is a decidedly outdated sentiment? Sure, there are plenty of women who would prefer to stay home and care for their families, and far be it from me to judge them. But the assertion that women going back to work will create “new challenges” seems a little stale. Women have been working outside the home for some time now, and any challenge (real or imagined) that this creates is certainly not new.

The Bloomberg article has a very “’50s” feel to it, alluding that many women are essentially being forced to work outside the home because they have no choice and that this spells disaster for American families. But it at least outlines one of the biggest issues of gender inequality in today’s workforce: men continue to be paid more. The Bureau of Labor Statistics reports women’s median weekly earnings were 83 percent of men’s in the second quarter of 2010. This gap persists despite the fact that women earn 60 percent of all bachelor’s and master’s degrees. The gap also reflects the fact that many of the sectors that attract women generally pay less than the sectors traditionally dominated by men.

This article has some legitimate information, but really the only question I had after reading it was, “why is this news?”. Why should it be deemed breaking information that women are working to support their families?
Changing Social Trends The Real Story

While admittedly the BusinessWeek story does have that "50's feel", Ashleigh misses the point. The point is families are being disrupted by changing social trends, whether the story has a "50's feel" or not.

Here are some more examples of pertinent changing social trends.

Student Debt

Tens of thousands of students graduate from college each year without a job, deep in debt, and many of them are doubling up households or moving back home. This disrupts family formation with impacts on housing and demand for goods and services.

Boomers did not graduate from college deep in debt. Tuition was $250 a semester when I started at the University of Illinois, and about $400 a semester the final semester.

Walmart Greeters

Take a look at the average age and sex of the greeters at Walmart. Are those people, mostly women, in those jobs because they want to, or because they have to?

Jobs are so few that grandparents compete against their kids and grandkids for those jobs!

If you were an employer, who would you hire to fill those positions: someone in their 30's or 40's raising a family in need of expensive health care coverage, or someone past retirement age on Medicare?

That women dominate such jobs offers one of the reasons women make less. Another reason is some women have disrupted their careers to raise families.

How many women engineers are there compared to men? Geologists? Physicians? Social Workers? Construction workers? Comparing degrees is not a valid way of determining whether or not women are underpaid relative to men.

Deflationary Impact of Trends

As boomers head towards retirement, and students deep in debt cannot find jobs that will allow them to quickly pay down that debt, all kinds of unfavorable demographic trends are playing out.

Importantly, the downsizing of boomer lifestyles will put pressure on high end housing for a long time.

Trends in Housing

I was in North Carolina these past two week, staying in a beach house owned by a person on my blog who posts under the name "Black Swan". Thanks Swan!

Swan developed and sold many properties on Topsail Island. I met another developer on the Island, and both of them are downsizing the sizes of the units they are building and intending to build. While not "breaking news", it certainly is another piece of the puzzle.

Smaller homes means less lumber, less granite, less drywall, less bathrooms, less furniture, less everything.

Needs of Downsizing Boomers

Aging boomers will be dependent on their children to look after them, yet the children do not really want their parents moving back in.

Taking those factors into consideration, "Black Swan" has plans to put two smaller homes on one parcel, say a 1200-1500 square foot home as well as separate 500 square foot home on the same lot.

Demographic Pendulum in Motion

Few understand the deflationary impacts of the entire gamut of trends that is playing out, or the stress these trends place on families.

It is futile to fight changing social trends, but that has not stopped the Fed with reckless proposals on top of reckless proposals. Please see Inflation Targeting Proposal an Exercise in Blazing Stupidity; Fed Fools Itself for more details.

As I stated in June of 2008, we are now on the back side of peak consumption and Peak Credit. Regardless of what Bernanke of the Fed does, the demographic pendulum is in motion. There is no going back.

Mike "Mish" Shedlock
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