Bank of America Merrill Lynch economists Neil Dutta and Ethan Harris are proposing an interesting theme for 2011: girl power.
In a new report, the New York-based analysts argue that women's earning power will recover from the recession far quicker than that of men.
For investors, the analysis suggests companies that cater to women, such as Lululemon, will be in the vanguard of the recovery. For those who take a wider view of the world than their stock portfolios, there's reason to think that the Great Recession might result in a significant narrowing of the gender wage gap.
The unemployment rate in the United States is 8.9 per cent for women and 10.6 per cent for men. The unemployment rates of the two sexes typically converge after an economic downturn because men dominate cyclical industries such as manufacturing and construction.
Messrs. Dutta and Harris predict it will take men longer to draw even with women this time because many of the manufacturing and construction jobs that were lost in the recession will never return and women make up the majority of workers in growth industries over the next decade such as health and education.
Men will gradually learn the skills to become nurses, clerks and teachers, but this will take time, Messrs. Dutta and Harris reckon. That will leave women with more purchasing power.
Women's pay in the U.S. still is two-thirds of men's for reasons ranging from discrimination to time lost at work due to child birth. But the wage gap is narrowing and Messrs. Dutta and Harris predict it will accelerate.
In five years, the real median income for women has risen roughly 1 per cent at an annualized rate, while men's median incomes have contracted at a 1.5 per cent annualized rate. Women are waiting longer to have babies and for every two men that graduate from college, three women do. This last factor is the most important because there is a direct link between education and higher incomes.
"Educated workers enjoy increasingly tighter labour markets relative to others and significantly higher levels of earnings," the Bank of America economists write. "Who are these educated workers? Mostly women."