Bad news for the job market: The reason why women are leaving the workforce at an alarming rate in Trump’s economy

There has been a concerning trend over the past year, American women are dropping out of the workforce at an alarming rate. According to Bureau of Labor Statistics data, between January and August roughly 455,000 women abandoned the US workforce, an amount second only to the pandemic since the government began record keeping in 1948.

The participation rate for women is now down to 77.7%. The consequences of this won’t just be felt in current economic growth, but also potential future growth warned Diane Swonk, chief economist at KPMG, speaking to CNN.

“You want an economy that has as many people who want to have their hat in the ring working and their talents as possible,” Swonk told the news outlet. “It’s not a zero-sum game. It’s not men or women. We need everybody. We need all hands on deck.”

Work conditions that came out of the pandemic helped create surge in female labor participation

The pandemic saw a massive number of women abandon the US workforce, with the rate for prime working-aged women, those between the ages of 25 and 54, diving in one month more than three percent to just 73.5%. What was dubbed the “she-recession” was shocking in that normally these percentages move by only tenths of a percentage point over years.

The economic crisis that ensued saw female-dominated industries getting hit the hardest in most cases. In the wake of the pandemic, higher costs of childcare and shortages made it difficult for mothers especially to return to the workforce.

However, last year, the participation rate of women in the US workforce finally grew above the level that had been reached in 2000, peaking at 78.4%. This was thanks to expanded hybrid and work-from-home arrangements employers had put into place during the pandemic that continued as well as a hiring surge.

What’s behind the alarming drop of women in US workforce

Companies these days though have begun calling workers back to the office. On top of that the problem of expensive childcare is still present and getting worse. Furthermore, the immigration crackdown by the Trump administration is only exacerbating the situation more.

“Women with children under five are driving the outflow from the labor force,” explained Swonk. Even more importantly, “we’re seeing is women with a [bachelor’s degree] or higher and with children under five are leaving at more than twice the pace of anyone else,” she added.

The other group of women that is dropping out of the US workforce in large numbers is Black women. Marginalized groups tend to get hit the hardest during economic slowdowns. Additionally, Black women are heavily employed in the public sector which the Trump administration has been aggressively slashing since coming to power.

This is costly for businesses, the women leaving the workforce and their children. “Historically, when women are providers for their family, their children do better off, too,” Swonk shared. “So, what we worry about is the long-term scarring due to the loss of resources for their children.”

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