While there’s plenty of chat about the gender pay gap between men and women, that’s only one part of the gender wealth gap. Find out how the gender wealth gap negatively impacts women, and what we can all do to combat it.
What Is the Gender Wealth Gap?
The gender wealth gap is the difference between the overall wealth of women and that of men. According to a report by Closing the Women’s Wealth Gap, American women own just $0.32 for each $1.00 that a man owns. The numbers are far worse for women of color.
This chasm between the wealth of men and women comes from a variety of factors, including pay disparities, childcare duties that disproportionately fall to women, and a general tendency of women to not negotiate salaries and benefits.
Explaining the Gender Wealth Gap
The gender wealth gap comes from a complex network of factors, but here are a few.
Women Are Paid Less
According to the National Women’s Law Center, women who work full-time make 83% of what men make. Put another way, women make an average of $0.83 for every dollar that a man makes.
The numbers get even worse when we consider women of color. Black women make $0.64 to the $1 of White men, and Latina and Native American women make $0.57. This can add up to tens of thousands of dollars per year in reduced earnings for women and over a million dollars over the course of a career.
Women Are More Likely to Leave the Workforce
When children enter the picture, women are much more likely than men to leave the workforce, either temporarily or permanently. High childcare costs often mean it’s more cost-effective for one parent to stay home. And only 17% of the parents choosing to stay home are fathers.
Even when women only leave the workforce temporarily, it can impact their long-term earning potential. Instead of receiving raises and promotions during the years while the children are small, a woman’s earning potential can stagnate or even go backward. She may find she re-enters the workforce earning less than she did before she had children. A Goldman Sachs study showed that when women took off just one year of work in a 15-year timespan, their earnings were 39% lower than those who worked all 15 years.
Women Are Less Likely to Negotiate Their Salaries
According to the book, Women Don’t Ask by Linda Babcock and Lara Laschever, men initiate negotiations about four times more often than women. And when they do negotiate, they tend to ask for and receive about 30% less than men.
The reasons may have a great deal to do with societal conditioning. Women are more likely to undervalue their own worth and their contributions to the workforce. Plus, they may fear being seen as too aggressive or demanding—fears their male counterparts rarely share.
Women Are More Likely to Have Student Loan Debt
Women are attending college in record numbers, but they’re also taking out loans in order to do it. As of 2018, women are responsible for nearly two-thirds of the country’s student loan debt. Combine that with lower wages, and it’s no wonder that women have a harder time building wealth.
What Can Women Do About It?
While some of these problems are systemic, there are things that women can do on a personal level to increase their long-term earnings and their overall net worth.
To start, women can advocate for themselves. Come to job interviews or performance reviews armed with compensation data and a strong argument why you deserve a higher salary. Don’t be afraid to ask for what you’re worth!
Women should also look for employers that offer robust family leave policies if they expect to take time off for childbirth. And women in positions of leadership can help to make sure that women are being considered for promotions and raise at the same volume as the men
What Can Men Do?
Men can be powerful advocates for women in the push toward wealth parity. A great first step is a transparency. Talking about money has been seen as gauche or a faux pas. But if the women around you don’t know that they’re being paid less for the same work, it’s much harder for them to do anything about it.
And as a reminder: your employer cannot, by law, forbid you from speaking to your coworkers about your salary. Your right to discuss your pay is protected by the National Labor Relations Act.
Also, men in leadership positions can and should advocate for more women in boardrooms, and encourage flexible work arrangements that help women to stay in the workforce if they have children.
At home, men can take on their fair share of parenting and home responsibilities. Currently, women do two more hours per day of housework and childcare, making it harder for them to excel in their careers. When men prioritize a more equitable division of labor, women can create a better balance between work and home that can improve their earning potential.