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The Truth About The Labor Participation Rate For Women 

Jean Chatzky  |  April 27, 2021

Getting back into the workforce in a post-COVID world: Here's what's really going on with the labor participation rate for women.

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This Week In Your Wallet: Let’s Hear It For The Moms

During normal times, I often dig into our Mailbag and find a missive from a reader or listener who is thinking of taking some time off from work or stepping out of the workforce entirely.  She (sometimes she and her partner) are weighing the cost of care for kids vs. her take-home pay, and the numbers are just too close for comfort… Or, she’s looking at the bills likely to one day roll in for care for her parents, and, again, the calculus doesn’t seem to work out in her favor.  

During these non-normal times, these questions are showing up even more often. I shouldn’t be surprised.  Since the start of the pandemic (when there were slightly more women in the workforce than men) the labor participation rate for women has fallen to levels we haven’t seen since 1988. But to the moms and dads who are asking these questions, I want to say: Wait. Let’s take a moment. Let’s explore the true cost of the decision to step out beyond those take-home-pay-to-cost-of-care comparisons. Let’s dig a little deeper to consider alternative solutions.

Figuring out the answer to those questions provided the launchpad for a special week of content my team and I will be launching in anticipation of Mother’s Day.  I’m excited to share all of this new reporting with you — particularly the stuff I learned myself talking to experts about how the rules for A) managing your finances in limited time, B) talking about your money with the most important people in your lives and C) getting your crucial documents in order have all changed in this surreal year. Note: Since we’re dropping this content on a daily basis, you have to sign up to get it. PS: Please spread the word (and this link!) with any moms you know and love. 

And now to the rest of the news of the week….

Scams to Spam

A little more than a month ago,  I got a notice in the mail from my state telling me that my unemployment claim had been denied.  The problem with that? I never filed one.  

Was it a mistake? A glitch? Had someone, somewhere gotten their wires crossed?  Actually it was a scam  — one so prevalent during the pandemic that the BBB took the time to issue a report about what it looks like and how to shut it down.  In my case, I went onto the website of the New York Department of Labor (where you would typically file a claim) and typed the words  “unemployment fraud” into the search bar.  Immediately, a page popped up with a button labeled “report fraud.” I did.  And now I’m sharing the story with you.  

Here’s the thing: Many of us have officially hit the point in the calendar year where — like second graders who can’t help staring out the window when they should be paying attention to the geography lesson — we just want to be outside. Spring fever coupled with pandemic fatigue would be enough on its own. Now throw in a little bit of the freedom you may be feeling once you’re fully vaxxed and —yup — your eyes are nowhere near the ball.

Judging from the recent spate of headlines about the continuing rise of scams during COVID, that’s potentially a big problem.  There are Amazon robocall scams (reporting a fraudulent charge on your credit card) and COVID vaccine scams (where you’re asked to take a survey for which you’ll receive a monetary reward). There are hiring scams (where the job listings aren’t real) and scams targeting seniors. There are even, on the heels of Mackenzie Scott’s largesse — scams that appear to be giving away billions to good causes. Scamsters, as The New York Times wrote, are “preying on the vulnerable in her name.” 

Ugh. Try to keep these rules in mind: Do not give out any personal information over the phone, via email or online unless you initiated the interaction yourself.  If someone reaches out to you — in any way, shape or form — and attempts to solicit your financial or personal details, end the conversation. Then, if and only if you’re 100% sure it’s legit and you want to continue the dialogue, call them back yourself at the published address of the business (for example, the one on the back of your credit card).   

When It’s Time to Change

You’ve got to rearrange. Who you are and what you want to be. Sha-na-na-na-na-na-na-na-na.  Sha-na-na-na-na. Apologies for the Brady Bunch earworm — It got stuck in my head and I couldn’t resist sharing.  

My point is that change is hard. Few people know that better than Wharton Professor Katy Milkman, co-director of The Behavior Change for Good Initiative and author of the new book How To Change: The Science of Getting From Where You Are To Where You Want To Be.  She has, over the years, studied the topic of saving money extensively.  So though I hope you’ll be digging into the whole tome (as I will), I asked her for a few savings tips to share just with you.  She responded with three:

Tip  1: Getting people to save more money is really, really hard. Research shows that inviting people to make smaller, more frequent savings contributions is more effective than encouraging them to make larger, less frequent ones, even when they amount to the same commitment (like saving $5 a day as opposed to $1,825 a year). So, breaking down your savings goals into bite-size pieces can be helpful.

Tip 2: To get ourselves to save without raiding our stores, there are also soft restrictions we can self-impose, such as using a piggy bank, and hard restrictions, such as putting our money in a locked savings account. (My favorite twist on this advice: Move your money to a savings account in a different bank, with a higher interest rate and no ATM card.)

And Tip 3: In one study, Katy and her collaborators found that when encouraging people to start saving for retirement, it was helpful to invite people to begin on dates labeled as “fresh starts.” They tested inviting people to save after an upcoming birthday or at the start of spring and found that these kinds of invitations increased savings substantially more than invitations to start saving at an unlabeled future date.  

Next week, I’ll share another one of Katy’s tricks the use of what she calls “cash commitment devices.” Sounds intriguing, no?

Have a great week!

Jean

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