Go "long on women" for profits, BofA Merrill says (Reuters)

WASHINGTON (Reuters) – U.S. recession wounds are healing faster for women than for men, so there is money to be made for companies that cater to women, economists at Bank of America-Merrill Lynch said on Tuesday.

The unemployment rate for women is almost two full percentage points lower than the rate for men, and women dominate fields such as healthcare that are expected to see the biggest job growth in the next eight years.

Women also earned the majority of bachelor’s degrees in the last decade, giving them a better shot at high-paying jobs.

“Yes, women make the bulk of household spending decisions as it is,” economists Neil Dutta and Ethan Harris wrote in a note to clients. “But their increasing earnings potential means stronger purchasing power relative to men.

“This secular ‘long-on-women’ theme should bode well for companies that cater specifically to women.”

Job losses in the latest recession were concentrated in male-dominated sectors such as construction and manufacturing, and economists think many of those jobs may be gone for good.

The labor force participation rate, a measure of how many working-age people hold jobs or are looking for one, was just 70.9 percent for men last month, matching the lowest on Labor Department records going back to 1948. Since the start of the recession in December 2007, the rate has dropped 2.1 percentage points.

Women traditionally have a much lower participation rate, largely because they are more likely to stay at home to raise children. The rate stood at 58.5 percent in November, down just 0.9 percentage point since the recession began and only slightly below an all-time high of 60.3 percent set in 2000.

There are still some giant hurdles for women to overcome in the workplace, starting with wage parity. According to the Census Bureau, the median income of women is two-thirds that of men, Dutta and Harris pointed out.

The gap is narrowing, however. Over the last five years, the real median income for women has risen at roughly a 1 percent annualized rate, while for men it has fallen at a 1.5 percent pace, they said.

“In our view, it makes sense to take advantage of this demographic shift,” the economists wrote.

“Women are better educated, more likely to live on their own, have better job opportunities, and will enjoy a stronger earnings potential relative to men.”

(Reporting by Emily Kaiser; Editing by Andrea Ricci)

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Posted by on Dec 24 2010. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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