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Gains Made in Equality of Incomes in Downturn

Sabrina Tavernise,
Monday, 10 Oct 2011 | 11:41 AM ET

The recession was bad for everyone, but women experienced at least one silver lining: Their median earnings edged a bit closer to men’s.

Terry Vine | Blend Images | Getty Images

The progress was bittersweet, however. It happened not because women earned more, but because men earned less, according to an analysis of new Census Bureau data.

Median earnings for men, adjusted for inflation, fell by $2,433 — or 6.0 percent — from 2007 to 2010, according to the analysis, by the American Human Development Project, a social research organization. Women’s earnings, meanwhile, fell by just $253 in the same period, a drop of 0.9 percent.

For men, it was another sad chapter in the painful tale of the recession, which officially ended in June 2009 and battered them more ferociously than it did women. For women, whose economic fortunes have been on a slow but steady rise relative to men’s since the 1970s, it was a small, if unsatisfying, victory.

“The recession was devastating for men,” said Kristen Lewis, co-director of the project, which is part of the New York-based Social Science Research Council. Women, on the other hand, “have come through it with no significant change in their buying power,” she said.

Some of the recession’s steepest declines were in industries that tend to be dominated by men. Earnings in construction, for example, fell by 5 percent, the analysis found. Meanwhile, median earnings in health care and technical occupations, popular among women, increased by 3 percent.

Median earnings for men were also dragged down by workers who lost jobs or had their hours cut back. (The statistic included any worker ages 25 to 64 who had been working full or part time at any point in the years measured.)

“When you have unemployment go from 5 percent to 10 percent, people are going to have lower annual earnings because they are working less,” said Betsey Stevenson, assistant professor of business and public policy at the Wharton School at the University of Pennsylvania.

Women And Business - A CNBC Special Report
Women And Business - A CNBC Special Report

The construction industry shed a whopping 1.4 million male workers during the recession, the analysis found. On the other hand, the service sector, which includes some of the lowest-paying jobs, like waitress and housekeeper, added jobs for both men and women. Earnings in the sector declined by 6 percent for men, as they took lower-paying jobs, but stayed flat for women.

Women did not have as far to fall, said Sarah Burd-Sharps, who is co-director of the American Human Development Project with Ms. Lewis. Women are heavily represented at the bottom of the earnings ladder and have lower salaries than men across all occupations. A typical woman in the service sector earned $14,792 last year, compared with $21,104 for a typical man.

But the gap is shrinking. The high-paying fields of management, business and finance gained 376,000 women during the recession, while shedding 119,000 men, according to the study. Women’s earnings in those occupations stayed flat, while men’s salaries dropped 3 percent.

This year of budget cuts does not bode well for women, who are heavily represented in local government jobs, like teaching, Professor Stevenson said.

Even so, in recent months, there has been an uptick in women’s earnings, she said. In early 2010, women’s median weekly earnings were 79 cents for every dollar earned by men. By the second quarter of this year they were at 83 cents. That was all the more surprising because female unemployment, lower than men’s through much of the recession, has now started to rise.

“What you see in these earnings is another step towards financial equality,” Professor Stevenson said.