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Snapshot for July 27, 2005.

Single mothers continue to face tough job market

It has been widely recognized that the strong labor market of the latter 1990s was a critically important complement to welfare reform.  The success of welfare reform was in large part predicated on low-income single mothers spending more time in the paid labor market, and in the words of welfare expert Rebecca Blank, the program “got lucky” (see http://www.brookings.edu/comm/transcripts/20010220.htm). At the same time that policy changes were pushing single mothers into the job market, the unemployment rate was headed for its lowest level in 30 years.  Thus, the demand for low-wage labor expanded more than quickly enough to meet the increased supply (which explains why these workers’ wages rose as well).

As shown in the chart, however, employment of single parents has fallen markedly in recent years.  In fact, their employment is down much more than that of married parents, suggesting that single mothers are facing a particularly challenging job market. 

The chart plots the share of both types of parents employed in the first quarter of each year, from 2000 through the current year (using the same quarter each year controls for any seasonal factors).  Labor economists typically use employment rates as a measure of demand for different groups of workers.  As might be expected, the employment rates of both groups fell from 2001 through 2003 during the recession and jobless recovery.  But while the employment rate for married parents’ began to recover over the past year, the rate for single mothers remained depressed.  By the first quarter of 2005, their employment rate was down 3.3 percentage points, compared to a decline of just one point for married parents.

As Congress contemplates reauthorization of the welfare reforms enacted in the 1990s, it needs to be mindful that the low-wage labor market of today is a far cry from that of the latter 1990s.  Work-based welfare reform is unlikely to be quite as “lucky” in today’s economy.

Source: EPI analysis of Current Population Survey data.  Programming support by Danielle Gao.

Today’s Snapshot was written by EPI economist Jared Bernstein.