The New York Times reported earlier this week that consumer spending, while slightly up for the holidays, wasn’t as strong as many were hoping and ended up looking pretty depressed in 2011.
Consumers’ unwillingness to open up their pocketbooks and go on credit-fuelled shopping sprees portends dismal economic growth in the near future.
They have already cut back so far that there is “little room for a big increase in spending in 2012,” as the article puts it. And it reports, “Consumer spending makes up 70 per cent of the economy, so until it ignites, general growth is likely to be sluggish.”
It’s no mistake that both the people interviewed for the article were women. There’s Sarah M. Manley from Minnesota, who has frozen crab legs she bought on discount stowed away for Valentine’s Day and now buys milk in plastic bags from the gas station instead of in cartons. There’s also Lynette Paudel of Ohio, who plans to drive her 2003 minivan until it breaks but was lucky enough to avoid being let go from her high school English teaching job. When it comes to talk of consumer spending, we might as well be talking almost exclusively about women. They oversee 80 per cent of consumer spending, totaling $3.7 trillion. As long as they continue to suffer in the recession, the rest of the economy will sputter along.
Paudel is very lucky to have kept her teaching job. Since the recovery officially began in 2009, women have actually been losing jobs. They saw 46,000 disappear, while at the same time men made some gains, getting back 1.26 million. Women’s unemployment rate has also inched up while men saw a decline. And a large part of that trend is that women were big losers in public sector layoffs, losing 374,000 jobs. A lot of those came from public education jobs — elementary and high school teachers like Paudel.
That’s not the whole story, however. Men have also been making gains in the public sector while women lost, driven by huge job losses for administrative and secretarial positions. Men are even gaining in the traditionally female-dominated retail industry.
Even those women who are still employed are likely struggling with other factors. Housing debt is a huge barrier holding consumers back. The Times article reports, “with more than one in every five borrowers still owing more than their homes are worth, many homeowners feel too pressed to spend on much more than the essentials.”
But as the Consumer Federation of America found, women were 32 per cent more likely to receive subprime mortgages than men across all product lines, even though they have similar credit profiles. Those high-cost loans, often pawned off on those who could least afford them, have led to a massive wave of foreclosures and put many homeowners underwater. And overall, women’s representation in the mortgage market has grown in recent decades — the number of single women homeowners, for example, grew by 4 million between 1994 and 2002. They’re likely to be struggling under heavy mortgage debt loads.
They also, of course, make less than their male counterparts for similar work. So while American workers’ wages have stagnated over the past three decades, women have yet to even catch up to men.
It’s likely that some of the women overseeing that 80 per cent of consumer spending aren’t going it alone. Many are making decisions for their families’ spending, and if they are unemployed hopefully they can rely on income from an employed spouse. (Although in a recent poll almost a quarter of respondents had a family member who had experienced job loss.) But if consumer spending is going to continue driving the economy, and the economic recovery, what’s happening to women in the recovery period can’t be ignored. Things have been bad and show no sign of looking up.
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This post originally appeared at NewDeal 2.0.