The battle for gender equality has been central to the news in 2020, with the gender pay gap in the foreground. The latest data shows that women earn an average of $ 0.82 for every $ 1 earned by men. What you don’t often hear mentioned is sex richness difference. The reality is that even with increased wages, the overall financial health of a majority of women still does not compare to that of their male counterparts. Here’s a closer look at the gender wealth gap, how the current pandemic has widened the gap, and what you can do to change that trend.
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What is the gender wealth gap?
While the gender pay gap focuses on the pay differentials between men and women, the gender wealth gap represents a larger financial problem. According to Ellevest CEO and Co-Founder Sallie Krawcheck, “The gender wealth gap is what a woman has and what she keeps. Wealth simply refers to assets minus responsibilities.” In other words, the gender wealth gap is the difference in overall net worth between men and women.
The numbers are staggering. According to a 2017 report by Closing the Women’s Wealth Gap, American women own only $ 0.32 for every dollar a man owns. This amount is even lower for black and Latin women – mere pennies for every dollar held by white men and women.
Income is certainly a determining factor when looking at the gender wealth gap. Other factors to consider include:
- Pension saving
- Company ownership
- Credit card debt
- Student loan debt
- Other loans or debts
The report uncovered alarming reasons behind the gender wealth gap. Some of these reasons include:
- The burdens of caregiving faced by women
- Occupational segregation
- Women have less financial knowledge than men
- Women are more likely to be refused a mortgage
- Large numbers of low-income women and women of color trapped in a cycle of debt
Although women are more likely to repay their debts, the system is designed to favor men.
Speaking of debt, just look at the student debt crisis in America. An updated 2018 report from the American Association of University Women shows that women account for almost two-thirds of student debt in the United States. It is difficult to build wealth when your focus is on paying down debt.
Krawcheck and Ellevest have done their part to help women build wealth. The company offers professional and financial support, banking and investment products, as well as an advanced investment algorithm specially designed for women. Ellevest’s algorithm takes into account wage gaps, longer lifespans and other factors that women face specifically. A 2020 scientific study found that, on average, women live 7.8% longer than men. This means that women need to set aside more money than traditional retirement calculations represent so that they don’t run out.
The impact of the pandemic on the gender wealth gap
The pandemic has also played a significant role in widening the wealth gap. “The pandemic is hitting women’s wages, women are losing their jobs more than men and gender roles are being reinforced even more than before,” Krawcheck said.
Recently, software company Qualtrics partnered with theBoardlist to survey 1,000 American adults on the effects of the pandemic on their careers. Here’s what the investigation found:
- 34% of men working from home (with children) were promoted while working remotely, compared to only 9% of women in the same situation.
- 57% of men consider working from home during the pandemic to be a positive experience. Only 29% of women have had a positive experience working remotely.
- Women are being forced out of the workforce due to the COVID-19 pandemic. In September 2020 alone, 865,000 women left the U.S. workforce, four times the number of men who left.
How you can fight to close the gender wealth gap
Just because there is a gender wealth gap doesn’t mean you can’t do anything to change it. Here are three things you can do to help close the gender wealth gap.
Increase your notoriety
To close the gender wealth gap, we all need to become more aware of the gender biases that surround us, including our own. A large majority of Americans grew up with defined gender roles that included men as breadwinners and women as caretakers of the household and children. This is no longer the reality for many, but these roles are further strengthened.
Many women left the workforce in 2020 due to fewer childcare options and distance-schooled children from their homes. Women working from home are expected to follow their careers while taking care of children and housework.
“Share the wealth,” Krawcheck says. Men should take responsibility for taking care of as many daily household chores as possible. Selflessness will go a long way in writing new definitions of gender roles.
Talk to kids the same way about money, regardless of gender
Families have traditionally approached discussions about money with boys with a mindset of abundance, strength and power. Girls, on the other hand, receive counseling from a situation of scarcity and weakness.
Did you know that there is even a gap between the male-female allowances? According to data collected by BusyKid.com, boys earn an average of $ 13.80 per week, while girls receive an average of only $ 6.71.
Parents have a significant influence on how a child grows when thinking about finances. It’s time to start paying more attention to the messages we send to children about gender equality. Not just by our words, but also by our actions. The way we teach girls about money should be like the message we send to boys.
Hold employers accountable
Employers play a major role in maintaining the disparity between men and women in the workplace. “During the pandemic, men received three times as many promotions as women,” says Krawchek.
It is vital for companies to understand their pay gap and check for existing biases. Krawcheck says, “If you haven’t measured your gap yet, you have one.”
Do your part to make sure your employer and other businesses are doing their best to close the gap and provide a level playing field for women.
Bonus action: contact your legislators
Closing the gender wealth gap is no small task. There are still laws that stand in the way of gender and racial equality. Now is the time to speak up and express yourself. Learn about the laws in place that widen the gender wealth gap, including loan and tax laws. Contact your elected officials and tell them how you feel.