In Part I of this Women-Owned Wednesday, “Becoming The Architect of Your Financial Future” blog series, we broke down the gender norms that unfortunately serve as roadblocks in women’s pursuit of financial wellness. In Part II we will delve into gender gaps you may or may not know exist.
Oh the Gaps
The already well-known pay gap took center stage over the last few years as the U.S. Women’s Soccer Team fought to rectify the staggering pay inequities between the men’s and women’s teams. In 2018, the men’s FIFA champions, France were awarded $38 million. As for the women’s champions, the US, they took home only $4 million. After a long battle, the recently negotiated contract also considers more than just the current team’s well-being. The team also thought ahead to future generations. U.S. Soccer is paying $22 million to the players in the case. They are also placing an additional $2 million into an account to support players in their “post-career goals” and charitable efforts related to women’s and girls’ soccer.
The pay gap, which was illuminated by this recent battle, also affects everyday women.
Of course, the U.S. Women’s Soccer Team is not the only one to experience this pay inequity. According to statistics from the U.S. Bureau of Labor, women annually earned 82.3% of that earned by men, with the gap being even wider for many women of color. Women are promoted less often than men, denied raises more often than men, and stop getting raises a full decade earlier than men.
I wasn’t aware of the Debt Gap, but once I was – I was blown away! Women pay half a percent more on credit cards. Pay higher rates on both small business and personal loans. When it comes to real estate, women are found to pay more in mortgages and see lower returns in real estate investments, losing out on an average of $1,600 per year.
The investing gap more than any of the other gaps is a result of cultural failure. The saying, “it takes money to make money,” is incredibly true here. Women quite simply have less to invest. We make less, spend less time in the workforce, and are spending more money due to the pink tax. And, with the financial industry being set up for men, women are less inclined to invest than men. Because of all of this, not investing in the stock market means women could be missing out on hundreds or even millions of dollars over a lifetime.
This one is big, likely the most important, and by far the least well know of these massive gaps – the Wealth Gap. The wealth gap considers a holistic measure of inequity. It accounts for things like investments, emergency savings, debt, inheritances, etc. — all of which are huge contributors to a person’s long-term financial stability. Also, the gender wealth gap is a strong indicator of future inequality. The most commonly referenced reports are a few years old, but they say for every dollar a white man owns, women own just 32 cents. Meanwhile, for Black and Latinx women – just one penny.
The Gaps Don’t Lie
The gender gaps are big, but now that we’re aware, we can only go up from here. In our third and final blog in this series, we’ll look at all the good things that happen when women have money. And, we’ll touch on a few practical tips.