There are more single women in the workforce than ever, and that’s having a profound effect on the US economy.
Working women contribute more than $7 trillion to America’s economy. By 2030, 45% of working women aged 25 to 44 in the United States will be single. That will be the largest share in history, according to research by Morgan Stanley (MS), using data from the Bureau of Labor Statistics.
In 2018, single women made up 41% of working women in that age range.
Women have always tended to be the principal shoppers in American households, and single women outspend married women, the Morgan Stanley research says.
Some sectors in particular could benefit from this demographic shift.
Apparel and footwear, personal care, food and luxury and electric vehicles are most likely to get a boost from more spending by single women, according to Morgan Stanley.
In the apparel segment, brands like Lululemon Athletica (LULU) and Nike (NKE) are well positioned, even as an aging population weighs down the sector.
Singles, especially women, spend more on personal care than their married friends. Morgan Stanley says Sephora-parent LVMH (LVMHF) and Ulta Beauty (ULTA) could benefit.
America’s departure from the traditional family model also means more business for fast-casual restaurants like Chipotle Mexican Grill (CMG) and Starbucks (SBUX).
Finally, Morgan Stanley expects more women will buy more cars in the future than they do now. At the moment men represent a bigger group of buyers, but over time, the male-female split of auto buyers will even out, which could give car sales a big boost. The bank’s top pick in the segment is Tesla (TSLA).
But single working women don’t just buy lipsticks, cars and yoga pants.
“Low-income households, which are more likely to be headed by women, spend 82% of their budget on basic needs like housing, food, transportation, health care and clothing,” said Lauren Bauer, fellow in economic studies at the Brookings Institution.
In comparison, middle income households only spend 78% of their budget on basic needs, according to a report from The Hamilton Project at the Brookings Institution. While housing accounts for the lion’s share of spending in all income groups, it eats up nearly half the budget for low-income households. Food and transportation are the next two biggest items.
The proportion of single women in the workforce is likely to grow as more women get bachelor’s degrees, marry later and wait until they’re older to have children. About 80% of single women between the ages of 25 and 54 are working or seeking employment, Bauer said.
And as the workforce changes, corporations will have to rethink how they can support employees. One of the biggest barriers that remains for female workers is access to childcare.
“We have to talk about releasing the pressure on the household,” said Pam Jeffords, partner and diversity & inclusion leader at PwC. And this means for employers to think about care — both for children and parents — as a condition for employment rather than a benefit.
“Organizations need to stop assuming that there’s one kind of traditional family unit that needs one kind of support,” Jeffords said.