Women's Earnings Will Recover Faster From Recession Than Men's, BofA Says

Women’s earnings will recover faster than men’s as the U.S. economy rebounds, which means companies that market to females may perform well, according to a Bank of America Corp. research note to clients.

Since women make the majority of household purchasing decisions and will have increasing earnings potential in the future, investors should consider companies such as New York- based AnnTaylor Stores Corp. and Lululemon Athletica Inc. based in Vancouver, said the note issued yesterday by Bank of America Merrill Lynch economists Neil Dutta and Ethan S. Harris in New York.

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

Women will rebound from the U.S. recession before men because females didn’t lose as many jobs as males did during the recession, the report said. Some of the industries most affected by the economy, such as manufacturing and construction, had more male than female workers. The unemployment rate for women, 8.9 percent, compared with 10.6 percent for men, is the widest it’s ever been, the report said. The overall unemployment rate was 9.8 percent in November.

Females make up the majority of the workforce in 9 of the 10 occupations that the U.S. Bureau of Labor Statistics predicts will add the most jobs over the next 8 years, the note said.

“There’s a gradual shift to a service economy, industries like healthcare and education, which are traditionally dominated by women,” said Harris in a telephone interview today.

More Education

More women are also graduating from college, with more than 50 percent of the bachelor’s degrees in the last decade awarded to women, according to the report. Additional education generally means higher earnings, Harris said.

There’s still a gender wage gap because of discrimination and interrupted work lives for children, according to Harris. Women working at least 35 hours a week in the first quarter of 2010 received 79 percent of the wages earned by men, according to the Labor Department.

The gap is narrowing, with the real median income for women rising at about a 1 percent annualized rate compared with contraction of 1.5 percent for men over the past five years, the note said.

To contact the reporter on this story: Alexis Leondis in New York aleondis@bloomberg.net.

To contact the editor responsible for this story: Rick Levinson at rlevinson2@bloomberg.net.

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