As a woman I know all too well about the many financial penalties we face. The list is long ranging from the gender pay gap (we earn $0.87 for every dollar a man earns), and the extra responsibility for children and family care (we spend an average of 3.9 hours per day on unpaid work, 1.5 hours more than men) to the pink tax where women routinely pay more than men for a variety of items ranging from mortgages to car repairs.
What I had not done was put this information together. I had never really thought about the collective impact of all these disadvantages.
That is until, I had the privilege of talking to Kristine Beese, founder of Untangle Money.
Kristine told me about how women get paid less than men (female dominated industries that pay less than male dominated industries and within each, women get paid less). At the lower end of the financial spectrum, this has significant implications on the health and wellness of women. It threatens quality of life, limits investments in enablers of success like education, and significantly increases risks for dependency. I have seen this first hand – my mother worked as a seamstress in a factory and was financially dependent on my father who was abusive.
At the higher end of the financial spectrum, it has significant financial implications. After reading Robyn Doolittle’s Globe and Mail article on the wage gap between female equity partners at top law firms, Kristine did some math. The article found that men at the equity partner level made an average of $371,596 more each year than women at that tier (a 25% pay gap). If the gap exists for 10 years and the money is invested at 4.5%, then it is worth $4.7M dollars.
Kristine discussed how women’s salaries peak around 40 and men’s peak around 55 , creating many decades of higher salaries for men. She talked about how women hit middle management and struggle to get beyond, how women struggle with fitting in the networking and social activities that often lead to greater opportunities, how more wealth is passed down to men, how men make more financial decisions and how women spend less time in the workforce due to child and family care, receiving less in pensions and the list goes on….
Slide originally from Ellevest demonstrating salaries by age
When you put all of this together, women have a higher risk for financial struggles. The 2019 Canadian Financial Capability Survey revealed that women make up 60% of those Canadians who are struggling to manage their day-to-day finances.
So, the question becomes, how do we fix this.
From an individual perspective, we women need to step up and take ownership over our finances. We need to understand that this is happening to us. We have to take time to both figure out how and then push towards addressing it in our own lives. So that means everything from problem solving how to increase our incomes to actively managing our money and planning for retirement. Untangle Money can provide support on the latter and also shares great insights and perspective via social media and financial book clubs.
From a systemic perspective, we need to collectively address this. This is not an isolated issue and it is not the sole responsibility of under resourced women to build a fair and equal system for everyone. We need our political, public, private and not for profit sector leaders to recognize the financial resiliency of women as a key issue and dedicate meaningful resources to addressing it. Yes, that means budget increases to provide equal salaries and investments in pensions, collective investments in childcare, and financial capacity building. It also means a shift to intentionality. We can build a fair and equal society by deeming it important and intentionally prioritizing our resources to make it happen.
Sources:
1. Gender pay gap: https://canadianwomen.org/the-facts/womens-poverty/
2. Unpaid work: https://www.theglobeandmail.com/canada/article-power-gap-backstory/
https://www150.statcan.gc.ca/n1/pub/89-503-x/2015001/article/54931-eng.htm
3. Pinktax: https://www.chatelaine.com/living/10-things-canadian-women-pay-more-for/
4. Gender pay gap at legal firm: https://www.theglobeandmail.com/canada/article-wage-gap-between-male-female-equity-partners-at-top-law-firm-averages/
5. Women's higher risk for financial struggles: https://canadianwomen.org/the-facts/womens-poverty/