The gender wage gap gets a lot of attention, and for good reason. At the current snail's pace by which it’s closing worldwide, the World Economic Forum says it will take about 200 years to close the pay gap. But there are other financial imbalances holding many women back and keeping them from economic independence.
Income is certainly important, as it impacts savings directly and can determine day-to-day lifestyles. It helps build wealth, but doesn’t necessarily guarantee it. “There is an important distinction between income and wealth inequality," says Rebecca Wiggins, executive director of AFCPE, a nonprofit training finance professionals to understand the gap. "While income levels address short-term needs, wealth accumulation provides mobility and long-term security.” Overall wealth is about financial security, and includes investments, savings, retirement accounts, and other assets.
As more research reveals the stark wage gap between men and women, we should be just as concerned about all of the factors holding back women from building wealth and achieving true financial security. Here are a few of the most striking.
1. The retirement savings gap.
A shocking gap exists between men and women when it comes to saving for retirement.
According to a survey by Student Loan Hero, women save on average about half the amount ($45,614) of retirement savings as men ($90,189). Only a little over half (52 percent) of women report having a retirement savings vehicle like a 401K, while 71 percent of men have saved for retirement using such a vehicle.
2. The student debt gap.
Women have less student debt than men, but report being much less equipped to deal with navigating that debt after graduation. A Student Loan Hero survey showed that women have an average of $91,647 in student debt, and overall, 28 percent of women see their student loans as “not at all manageable.” That’s more than twice the number of men who say their debt is unmanageable (13 percent).
That could be because after college, women earn lower salaries than men, making it more difficult to pay these loans back.
Men also reported to be more educated on how to make their student loans more manageable: 79 percent of men said they were familiar with the concept of refinancing loans, compared to 63 percent of women.
3. The financial literacy gap.
From a young age, men are taught more about managing their finances than women are. A recent survey from T. Rowe Price shows a near 10 percent gap between boys and girls whose parents discuss finances with them. While 58 percent of boys said that their parents discuss financial goals with them, just 50 percent of girls say that is true. Even more disturbing is that plenty of parents believe boys are naturally more equipped to deal with money; 80 percent of parents said their son understands the value of a dollar, versus only 69 percent of parents who have a daughter.
4. The work time gap.
Due to many factors, including the lack of federally mandated maternal leave, women are twice as likely as men to work part-time. As many part-time jobs don’t offer employer benefits like health care, retirement investment, or transit support, that leaves many women paying for these items out-of-pocket, ensnaring them in a catch-22 of missed opportunities to increase their wealth.
There’s no reason to think that women don’t want to be as fully employed as men, but age-old gender biases hold them back. A 2013 survey by the Pew Research Center exploring why more women choose part-time work than men explained that “more than half of the respondents thought children were better off if the mother stayed home" while "34 percent believed they’d be as well off if she worked. Only 8 percent said they'd be better off if the father stayed home.”
Despite the lack of any evidence for it, there is a commonly held belief that stay-at-home-moms are more effective at raising children than dads.
5. The homeownership gap.
Although slightly more single women own homes than single men, homes owned by men are worth more than homes owned by women. Even the rate of appreciation is unequal. As Time reports, over the course of the same time period, “single men’s homes appreciated by $63,921" while "homes owned by unattached women gained $53,809 in value since the time of purchase." Additionally, "homes owned by single men on average are valued 10 percent higher than those of single women, and that the value of their homes have appreciated by 16 percent more than those of their female counterparts.”
Another obstacle to homeownership that women face is their disproportionate likelihood to be taken advantage of during the process of applying for a loan. Women of color are far more likely than other groups to be targeted by predatory lenders. Before the housing bubble burst in 2007, Salon writes, “in 2005, women were 30 to 46 percent more likely to receive subprime mortgage loans than men. Black women were a staggering 256 percent more likely to receive subprime loans than white men.”
Finance experts agree that investing in closing these gaps will benefit Americans as a whole. “White women are still earning only 80 cents on the dollar of their male counterparts. It is even worse for women of color," says Wiggins. "This decreased earning potential impacts things like compounding interest which leads to wealth inequality.
"Women are becoming the primary or sole breadwinners of their families and often make the purchasing decisions for the household, so there are significant implications for the growth and stability of our national economy by closing the gender wealth gap.”
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