Building on Employment and Wage Gains for Working-Class Women Requires Ongoing Federal Investments

Thanks to the historically strong labor market recovery of the past two years, working-class women—defined here as those without four-year college, or bachelor’s, degrees—have experienced significant improvements in both employment and wage growth. However, long-standing economic inequities remain a challenge. The labor market turnaround was not a certainty, particularly given that working-class women had the sharpest drop in employment during the recent recession, largely because of their overrepresentation in the front-line jobs that bore the brunt of the COVID-19 pandemic. In spring 2020, 1 in 5 jobs held by working-class women vanished in a matter of weeks,¹ a toll more severe than that experienced by both women with four-year college degrees and men with or without four-year college degrees.

Among many sobering revelations, the pandemic laid bare the persistent and uneven burdens and structural inequalities that all women face in the labor market. However, two factors weighing especially heavily on working-class women—occupational segregation and caregiving responsibilities—are long-standing obstacles hindering this group’s economic advancement.²

Analyzing data from the U.S. Bureau of Labor Statistics’ Current Population Survey and other sources, this report examines the status of working-class women in the labor market and describes barriers that they continue to face.

Among the findings from this analysis are:

• Employment rates for working-class women of “prime working age”³ continue to rebound from pandemic lows. For working-class women under age 40, employment rates are back to pre-pandemic levels.
• Over the past two years, working-class women have experienced faster wage growth than most men with similar educational attainment, as well as women and men with four-year college degrees.
• Notwithstanding these trends, it remains the case that working-class women are less attached to the labor force than other women and men. If working-class women of prime working age had labor force participation rates comparable to those of women with four-year college degrees, there would have been 5.3 million more women in the labor market in 2022.
• Occupational segregation, which affects working-class women to a greater extent, undermines job quality and weakens this group’s labor force attachment.
• Caregiving responsibilities are also associated with weaker labor force attachment for working- class women: More than 1 in 3 working-class mothers (34.6 percent) were either out of the labor force or working part time because of child care or family responsibilities in 2022.

The Biden administration’s once-in-a-generation economic investments, along with proposed expanded investments in the care economy, represent critical opportunities to address these barriers and expand employment outcomes for working-class women.

In his recent State of the Union address, President Joe Biden recounted the progress made over the past two years in “building an economy where no one is left behind.”⁸ Indeed, the U.S. economy has experienced a robust and broad-based recovery from the pandemic-related recession, owing to policymakers’ aggressive, targeted response, including the American Rescue Plan. Real output fully recovered by the third quarter of 2021,⁹ and employment recovered to pre-pandemic levels by September 2022, just 30 months after pandemic stay-at-home orders took effect in the United States.¹⁰ The speed of the recovery becomes apparent when one considers that following the Great Recession, it took two-and-a-half times as long—76 months—for employment to reach its pre-recession peak.¹¹ Women, who were harder hit by pandemic-related job losses, saw their employment recover to pre-pandemic levels by January 2023.¹² As CAP has documented in prior work, employment of working-class women fell further and was slower to recover than employment among women with greater educational attainment and for men overall, largely because of the overrepresentation of working-class women in sectors that were hardest hit by the pandemic—especially retail, hospitality, child care, and elder care. This pattern is known as occupational segregation.¹³

Over the past two years, working-class women of prime working age—those ages 25 to 54—have seen substantial improvement in their employment rates from pandemic lows. For working-class women under age 40, the employment-to-population (EPOP) ratio of 66.5 percent during 2022 was identical to the ratio for 2019, the last full year prior to the pandemic, marking a full recovery after hitting a low of 61.1 percent in 2020.¹⁴ In comparison, working-class women ages 40 to 54 had an EPOP ratio of 66.6 percent in 2022. Although this was below the 2019 level of 68 percent, it nonetheless represents a dramatic improvement from the 2020 low of 62.9 percent.¹⁵

Working-class women, especially those under age 40, have also experienced healthy wage gains during the recovery.¹⁶ In many cases, a tight labor market, including high rates of job vacancies, has created opportunities for working-class women to trade up to better-paying positions, driving historically large improvements in wages for those at the lower end of the wage distribution, many of whom are women with less educational attainment.¹⁷ From the fourth quarter of 2020 to the fourth quarter of 2022, nominal growth in earnings for full-time, working-class women largely outpaced wage growth for their male counterparts and for women and men with four-year college degrees. Women with a high school diploma saw earnings at the median grow 13.4 percent (compared with 8.6 percent for similarly educated men), and women with some college or an associate degree experienced 9.2 percent growth (compared with 7.4 percent for similarly educated men). Only among women without high school diplomas was earnings growth slower than that of their male counterparts (12.1 percent vs. 16.4 percent). It is also notable that during this period, earnings for most working-class women grew faster than the earnings of individuals with bachelor’s degrees, whether women (11.2 percent) or men (7.3 percent).¹⁸

As much as the tight labor market has supported wage growth, the level and persistence of vacancies in the industries where large numbers of working-class women are employed—including the retail, leisure and hospitality, and care sectors—raise concerns about the sustainability of the economic expansion.¹⁹ Employers need workers to meet growing demand, expand operations, and contribute to economic growth.

Notwithstanding the recovery of employment rates among working-class women of prime working age, the absolute number of working-class women employed in the United States is markedly lower than it was prior to the start of the pandemic. In April 2023, the total number of employed working-class women of all ages was 4.3 percent below its pre-pandemic level, translating to 1.5 million fewer working-class women on the job than in February 2020.²⁰ By contrast, employment of women with four-year college degrees increased by 1.6 million (5.3 percent) over the same period.²¹ The disparity in women’s employment growth by educational attainment mirrors a similar pattern among men. Compared with the February 2020 level, employment of working-class men is close to flat (a decline of 87,000 positions), compared with a gain of 1.9 million (6.6 percent) for men with four-year college degrees.²²

These employment shifts can be primarily, though not entirely, attributed to broad demographic changes crucial for policymakers to understand. Specifically, women’s increased attainment of four-year college degrees in recent years has unfolded against a background of population aging such that as older women—who are less likely to hold four-year college degrees²³—exit the workforce, whether due to planned retirement or because of health concerns or disability—they are “backfilled” with new labor force entrants who are far more likely to have a bachelor’s degree. Moreover, as older women left the workforce in greater numbers during the COVID-19 pandemic, this backfilling accelerated. As a result, a larger share of women of prime working age hold four-year college degrees. As recently as 2017, 40 percent of women of prime working age had a four-year college degree. By 2022, that share had leaped to 45 percent.²⁴

Not only are there more women with four-year college degrees in the prime working age population, but these women have also tended to have stronger labor force attachment than women without bachelor’s degrees, as measured by labor force participation rates—84.7 percent vs. 69.6 percent in 2022—and employment-to-population ratios—83 percent vs. 66.6 percent in 2022.²⁵ Women with four-year college degrees make up an even higher share of employment than their population would suggest, representing 51 percent of the employment of women of prime working age in 2022. This marks the first time that women with four-year college degrees outnumbered those without four-year college degrees among prime working age employed women.

These population-level changes—societal aging and women’s gains in educational attainment—account for 86 percent of the drop in the number of prime working age women without four-year college degrees in the labor force since before the start of the pandemic.²⁶ The remainder can be explained by lingering reductions in labor force participation since the pandemic, principally seen among working-class women over age 40. These labor force estimates are further complicated by the decennial census population revisions, which others have backcast to find that a more significant gap since the pandemic was closed than published numbers suggest.²⁷

The CAP analysis comports with the continued high rates of job vacancies in sectors that disproportionately employ working-class women. In March 2023, employers reported 9.6 million job openings on a seasonally adjusted basis.²⁸ Half of these openings were in sectors that prior to the pandemic employed large numbers of women without four-year degrees: retail (717,000 open positions); health care and social assistance (1.6 million); leisure and hospitality (1.5 million); and state and local government (922,000).²⁹

Increasing the labor force engagement of working-class women could make a substantial difference not only for women’s economic security but also for the economy as a whole, by easing hiring challenges. For example, if prime working age women without four-year college degrees had labor force participation rates comparable to those of their counterparts with bachelor’s degrees, there would have been 5.3 million more women in the labor market in 2022.³⁰ Even with recent declines, working-class women make up about one-quarter of the total labor force,³¹ and finding ways to support the entry or reentry of women without four-year college degrees to the labor market should be a policy priority. Moreover, to the extent that future economic growth hinges on the labor market engagement of these women, it is important to understand the obstacles they face in getting back to and staying in work and to implement policies to address these barriers.

One of the many labor market obstacles facing working-class women is that they experience occupational segregation to a significantly greater degree than women with four-year college degrees.³³ Occupational segregation—defined as a clustering or overrepresentation of a group in a narrow range of jobs³⁴—has many causes, including gender-based steering into certain occupations and outright discrimination in hiring. Working-class women, and working-class men, are much less likely to work in gender-integrated fields than women and men with higher educational attainment.³⁵ Occupational segregation hurts women’s economic security because occupational crowding, combined with the historical devaluation of “women’s work,” rooted in sexism and racism, drives down wages and overall job quality in occupations that are dominated by women.³⁶

Occupational segregation, attendant low wages, and poor job quality undermine labor force attachment for many working-class women. Typical markers of job quality—living wages, health and retirement benefits, job protections, paid leave, control over working hours, and having a voice at work—do more than enhance workers’ financial well-being. They also support the balance between work and life outside work. This is especially salient for women, who shoulder greater family responsibilities than do men.³⁷ Conversely, poor-quality jobs—which working-class women are more likely to hold, in part because of occupational segregation—offer little to keep workers attached. For instance, workers with care responsibilities may find employment incompatible with a work schedule that is constantly in flux or a job that pays too little to afford the cost of child care. Such dynamics explain research findings that those in the lowest-quality occupations leave the labor force at rates roughly 3.5 times to 4 times higher than those with high-quality jobs.³⁸

Just as working-class women were overrepresented in the industries hardest hit by the pandemic, working-class women are overrepresented in the industries and occupations where employment continues to lag and where vacancies are high and poor-quality jobs are numerous—namely, retail; restaurants; and social assistance, including jobs in child care and elder care. Although challenging, dismantling entrenched patterns of occupational segregation is worthwhile, as it can help improve job quality for working-class women. Such improvements not only address equity concerns and lift women’s economic security but also enhance economic growth by improving working-class women’s labor force attachment and productivity.

Another factor affecting many women’s labor force attachment is caregiving responsibilities, which fall much harder on women than men. Mothers both with or without bachelor’s degrees who have minor children at home are eight times more likely to be working part time or to be out of the labor force entirely due to caregiving responsibilities than are fathers with minor children at home. Caregiving responsibilities affect women throughout the course of their lives, whether they are caring for young children, an adult family member, grandchildren, or an elderly parent or loved one.

The impact of caregiving is greater on working-class women than on women with four-year college degrees. Among prime working age women with minor children at home, more than one-third of working class women (34.6 percent) were either out of the labor force or working part time because of child care or family reasons in 2022, compared with fewer than one-fourth of women with four-year college degrees (24.1 percent).³⁹ Moreover, the gap between women with and without a four-year college degree has doubled over the past five years, from 5.3 percentage points to 10.5 percentage points. Over this period, the effect of caregiving on working-class women’s employment grew slightly while falling for women with bachelor’s degrees.

Caregiving responsibilities weigh heavier on working-class women than on women with four-year college degrees, which explains much of the disparity in labor force participation rates between these two groups. Working-class women are more likely to be without benefits such as paid leave, access to telework, or scheduling control that helps workers balance their care responsibilities with work.⁴⁰ They also earn less, on average, than women with four-year college degrees, meaning they are more likely to struggle with affording care for children or other family members⁴¹ or may be more likely to live in an area with too few care options. Given their lower average wages and benefits, working-class women experience steeper trade-offs when faced with the high cost of paying for someone outside the household to provide care. Women with higher wage rates are better able to support their families and pay for care; the math for lower-income households is much more difficult to balance, leading many to reduce the hours they work or stop working so that they can provide unpaid care themselves. Working-class women with less access to workplace flexibility may have little option but to leave their jobs entirely.⁴²

Addressing job quality factors that support caregiving and access to affordable care will translate into expanded labor market opportunities for working-class women, improving their economic security, increasing labor force attachment, and boosting the economy overall.

Achieving and sustaining an inclusive economy means further supporting the employment prospects of working-class women, many of whom are still waiting to join or rejoin the job market. This will require tackling the long-standing problem of occupational segregation, boosting job quality, and helping women balance work and caregiving responsibilities, among other priorities.⁴³ Fortunately, there are immediate opportunities to make progress on these fronts, thanks to recently passed legislation.

Addressing occupational segregation and boosting job quality

Landmark legislation signed into law by President Biden in 2021 and 2022 can create historic opportunities for working-class women to gain access to millions of new, high-quality jobs with stable career prospects, while dismantling long-standing patterns of occupational segregation. Together, the CHIPS and Science Act, the Infrastructure Investment and Jobs Act (IIJA), and the Inflation Reduction Act will invest more than $1.6 trillion to create hundreds of thousands of well-paying jobs in the construction, manufacturing, semiconductor, transportation, water, broadband, and clean energy sectors.⁴⁴ Importantly, most of these jobs do not require a four-year college degree.⁴⁵

However, women historically have been grossly underrepresented in the sectors described above: Women make up 18 percent of the infrastructure workforce,⁴⁶ 25 percent of the energy workforce,⁴⁷ and less than 25 percent of the semiconductor workforce,⁴⁸ despite making up roughly half of the overall labor force in 2022.⁴⁹ Many occupations within these sectors lack racial and ethnic diversity, with Black and Latino or Hispanic workers either underrepresented or overly concentrated in lower-paying jobs.⁵⁰ Looking at employment disparities along occupational lines paints an even more dire picture; for example, women hold just 4.2 percent of jobs in construction and extractive occupations.⁵¹ This is notable because these construction jobs are also typically subject to standards that can improve job quality and equity, such as Davis-Bacon Act prevailing wage and benefit standards or oversight by the Office of Federal Contract Compliance Programs.⁵²

If implemented strategically by federal, state, and local actors and private contractors, the CHIPS and Science Act, the IIJA, and the Inflation Reduction Act represent a “once-in-a-generation opportunity” to break down stubborn patterns of occupational segregation, by expanding pathways into good jobs for working-class women and other underrepresented individuals, especially those without four-year college degrees.⁵³

Already, the Biden administration has taken several steps to increase the likelihood that women have access to good jobs on federally funded or federally supported projects. For example, many federal agencies have built standards around job quality, equity, and training into discretionary IIJA procurements, making it more likely that awarded projects commit to, implement, monitor, and measure these standards.⁵⁴ More recently, the U.S. Department of Commerce asked applicants for CHIPS funding “to take action to conduct outreach to and retain women in construction jobs because the United States cannot build the semiconductor workforce it needs without them.”⁵⁵ The administration also requires those seeking funding to detail their workforce development plans to address training, recruitment, and retention of underrepresented groups, address barriers to equity and steps to combat harassment and discrimination, and include a plan to ensure access to child care for construction and manufacturing workers.

Beyond these steps, labor and workforce training incentives built into the Inflation Reduction Act will increase the likelihood that the construction jobs supported by these federal investments will be good ones with fair pay and benefits; the incentives will also spur the development of registered apprenticeship pathways into these jobs.⁵⁶ The key will be to ensure that the training programs supported by this legislation employ proven practices⁵⁷ to recruit working-class women and other underrepresented groups, such as investing in pre-apprenticeship programs and wraparound services,⁵⁸ as well as combat retention issues stemming from discrimination and harassment.⁵⁹ Also key will be the expansion of registered apprenticeships and the implementation of other policies that increase demand in the labor market for women and other underrepresented workers.⁶⁰

These actions will address gender equity, job quality, and occupational segregation by opening new pathways to good jobs. In addition, they will expand and diversify these critical workforces and help the U.S. economy deliver on national priorities of rebuilding infrastructure, advancing clean energy, and meeting advanced manufacturing goals to minimize supply chain disruptions.

Supporting family caregivers

In remarks to the World Economic Forum in 2022, Treasury Secretary Janet Yellen noted the linkages between “[t]he lagging labor force participation rate” and “factors that disincentivize work, such as inadequate paid leave and high childcare costs.”⁶¹ The pandemic proved the adage that “care is the work that makes all other work possible,”⁶² while exposing the shaky state of the national care infrastructure that has led to weaker labor force attachment for working-class women.

Enhancing working-class women’s labor force attachment will require comprehensive, sustained investments in child care to shore up the currently broken system that leaves care out of reach for low- and middle-income families across the United States. CAP emphasizes a three-pronged approach to solving the child care crisis that focuses on building supply while focusing on equity, expanding affordability, and supporting the child care workforce.⁶³ Responding to this need, President Biden proposed in his most recent budget blueprint an additional $1 billion in Child Care and Development Block Grants (beyond the $9 billion in current funding), as well as an expansion of tax credits to employers that offer child care to their employees.⁶⁴ The administration has also demonstrated its recognition of the crucial role that child care access and affordability play in the workforce through its rollout of the CHIPS and Science Act, which includes a requirement that those seeking more than $150 million in direct funding “submit a plan to provide their facility and construction workers with access to child care.”⁶⁵ These steps, combined with the efforts to provide new career pathways for working-class women described previously, hold tremendous potential to address the pressing needs of women without four-year college degrees.

Similarly, the president’s budget speaks to the needs of the millions of working-class women caring for older adults. It calls for meaningful increases in Older Americans Act funding to support family caregivers, provide respite care, and boost the paid care workforce. It also proposes $150 billion over 10 years to address waitlists for home and community-based care under Medicaid, enabling more older adults and people with disabilities to remain in their homes while also fostering greater workforce attachment among those caring for elderly or disabled family members.⁶⁶

Centering care in this way demonstrates that the Biden administration understands the challenges facing America’s economy and its workers as the nation continues to deal with the effects of the COVID-19 pandemic. Against the backdrop of an aging population, boosting labor supply will become increasingly important to the economy’s growth prospects. Using the power of public policy to address the obstacles facing those currently not participating in the labor force, policymakers can expand opportunity, boost family well-being, increase economic security, and secure long-term economic growth.

Women have benefited from the strong jobs recovery since 2020, but economic progress has been uneven along lines of educational attainment. Too many working-class women continue to be hampered by structural inequalities that interfere with their ability to obtain quality jobs, fair compensation, and equitable treatment at work.

Sustaining the economic recovery will require policymakers to think more broadly and inclusively when it comes to supporting women’s employment. Fortunately, there are effective policy levers available to tackle some of the primary obstacles hindering working-class women—occupational segregation, job quality, caregiving responsibilities, and others—all of which must be addressed to meet the challenge of building a strong and growing economy in which no one is left behind.

The author would like to thank Rose Khattar, Christian Weller, Marina Zhavoronkova, Sara Estep, Maureen Coffey, Hailey Gibbs, Jared Bass, Marcella Bombardieri, and Bela Salas-Betsch for their contributions to this report.