Hey, guys. It’s Chelsea from
The Financial Diet. And this week’s video is
brought to you by Squarespace. And today, I wanted to talk
about the specific costs of being a woman in America. And I think it’s
important to talk about, because while it’s true
that women have made huge progress in terms of
financial, professional, and personal equality over
the past few decades, there are still tons of areas
where our gender impacts us, especially financially. And I wanted to explore a
few of the areas in which we are seriously still
paying for our womanhood. If you’re a woman, it
might be nice to know that on some of these fronts,
it’s not all in your head. And if you’re not a
woman, it might be useful for you to understand
what we’re dealing with. The first and one of
the most striking areas in which we are financially,
and in this case, professionally punished
for our womanhood is the impact of parenthood
on mothers versus fathers. So something that people may not
know is that for women and men, the impacts of becoming a
parent are very different. Financially speaking,
becoming a mother is one of the worst
decisions a woman can make, whereas for men, becoming
a father actually increases their earning
potential over their life. Women are effectively
punished at workplaces for becoming a parent,
where men are rewarded. These differences persist
even after controlling for factors like
the hours people work, the types of
job they choose, and the salaries
of their spouses. So the disparity is not
because mothers actually become less productive
employees and fathers work harder when
they become parents, but because employers
expect them to. Yet, much of the pay
gap seems to arise from old fashioned
notions about parenthood. According to Michelle
Budig, a sociology professor at the University of
Massachusetts Amherst, employers read
fathers as more stable and committed to their work. They have a family
to provide for, so they’re less
likely to be flaky. That is the opposite of
how parenthood by women is interpreted by employers. The conventional story
is they work less and are more distractable on the job. And this disparity
actually only gets worse the lower
income the family is. But part of this
phenomenon across the board is that we still have
very gendered notions about who should take on the
majority of child rearing. And the truth is, that
expectation that mothers should be the one who are doing
most of the parenting even when the decision to
have a child was often 50/50 is borne out in reality. Fathers have become more
involved over the decades, but there’s still
a huge disparity in who takes the burden
of having a kid at home. It is true that today’s fathers
are more involved in parenting children than ever before. Over the past half
century, fathers in America nearly tripled
their childcare time from 2.5 hours per week
in 1965 to seven hours per week in 2011. But over this period,
women’s parenting time, too, has increased from
10 hours per week in 1965 to 14 hours per week in 2011. Women generally dedicate
more of their free time to parenting activities
proportionally. And it’s not hard to reason that
it’s because fathers are simply less present in the home. And when that’s being echoed
by our employers’ expectations, it can be really
hard to break out of that natural cycle
of who does what. Point being, becoming
a parent still doesn’t mean that all the same
thing for a man and a woman, especially financially. Another area in which it
really costs us to be a woman is in reproductive health. So there are two pretty
fundamental realities in this dynamic at play. One, the burden
still usually falls on women in a
heterosexual relationship for reproductive health. Think things like birth control
pills, patches, IUDs, et cetera. Women’s birth control methods
are higher on average than men’s. And that means that a woman
on the pill from ages 18 to 65 could spend as much
as $28,200 on the pill alone in her lifetime. Contrarily, a man using
one condom a day– which, let’s be
honest, is probably a lot more than average– between 18 and 65 would only
spend as much as $17,155 on condoms. And despite the fact that,
reproductively speaking, it takes two to
tango, and therefore, both parties should
be responsible for the potential downsides of
preventing that reproduction, men are simply not
seen as expected to endure the same things women
are to prevent reproduction. Clinical studies for
male birth control have been repeatedly shut down
for side effects, side effects like mood change,
depression, and pain, which are routinely
experienced by women who take birth control. And even when it comes to
our day-to-day reproductive maintenance, our
necessities are still viewed by society as a luxury. And that means we
often end up paying a premium on things that are
critical for our well-being. For example, as of
May 2018, 36 states are still taxing tampons
as a luxury item. And I don’t know
about you, ladies, but I have never found anything
luxurious about tampons. And similarly to this tampon
as luxury item phenomenon, we have what is
called the pink tax. You may have already
heard of this phenomenon, but essentially,
the pink tax is when products which are otherwise
almost indistinguishable but marketed to women
are more expensive simply because of their gendering. And if it sounds like
something that wouldn’t really happen because it goes
against market common sense, you would be surprised
how common it is. In late 2015, the New York City
Department of Consumer Affairs published a study comparing
nearly 800 products from more than 90 brands
looking for price differences in items marketed to
different genders. On average, products
for women or girls cost 7% more than comparable
products for men and boys. USAToday.com. The pink tax can be seen in
everything from clothing, to children’s toys,
to hygiene products, to everything in between. And it’s ironic when
we’re taxed this way considering how much we are the
deciders of consumer markets. Women influence $7 trillion
of spending in the US annually and influence 83%
of all consumer spending in the United States. But our decision-making is
actually part of the reason that companies
implement this pink tax. Simply put, companies
put more resources behind products and campaigns
that are targeted to women. Therefore, they
justify these products needing to be more expensive
to recoup that loss. And often– and this is
no surprise to women– these campaigns
are intentionally emotionally manipulative,
making promises around a woman’s
romantic or personal life or intentionally cultivating
a feeling of insecurity. What should we do here? Simply put, whenever
it’s possible, avoid products that
are pink taxed. And that can often just
take the few seconds necessary to cross
check the price when compared to a man’s product. You won’t be able to avoid
100% of the pink tax, but you can start to seriously
vote with your wallet by teaching companies who engage
in this practice on really blatant levels that
you won’t support it. Also, yelling at
brands on social media is always a good option. Perhaps one of the
most impactful costs of being a woman is our
serious financial literacy gap. Essentially, the
financial literacy gap is the gap between
men and women on what we know around the
basics of finance and the basics of managing
our own financial lives. There have been numerous
studies performed on the financial literacy
gap, and some of the results are pretty striking. In one study, results showed
that both millennial and older women underperformed
men in answering basic financial questions. The study also found that women
are more likely to register don’t know answers
to these questions. On average, between 25%
and 36% of the time, women admit that they don’t know
the answer to a basic question. And this is a gap
that is closing with each subsequent generation,
but it’s still pretty big. The difference in
knowledge levels between millennial
women and millennial men as measured on the
quiz is smaller– just 10%– than in
these older generations. The gap between Gen X
women and Gen X-Men is 18%. And for boomer women and
boomer men, it’s 19%. And this is good news for
closing the financial literacy gap. But 10% is still enormous. And when you consider all of the
manifestations of not knowing basic things about
finances, it’s very likely that
that 10% difference will result in enormous
financial consequences over the scope of a
lifetime, because not having financial literacy isn’t
just about every individual one-to-one decision. It’s also about all
of the opportunities you don’t seize because you
don’t know that they’re there or you don’t understand them. The financial literacy gap
is responsible for all kinds of discrepancies in
our financial lives, because it impacts
everything from our wages, to our investments, to our
day-to-day spending decisions. And simply put, a
big reason for this is that many women are still
raised in households where the expectation is
that the man will be doing most of the
major financial deciding. And therefore, she just
doesn’t need to know as much. But there are many tangible
ways to combat this. And one of the
biggest ways you can is to commit
yourself to learning the basics of financial
literacy, which you can notably do with the TFD book. But you can also organize
financial meet-ups, money talk parties, and even
group chats about money with your girlfriends. You can even go so far as
to speak to your mother about what she may not know. The point is, it’s
up to you to decide to close that financial
literacy gap in your own life and the lives of the
women around you. And it’s no surprise that
the financial literacy gap brings us to perhaps
the most well-known impact of womanhood on our finances,
which is the wage gap. So the wage gap has narrowed
somewhat since the 1980s, but it’s still very
present, and that narrowing has slowed in the past 15 years
with men still out-earning women for the same jobs. In 2017, women earned
82% of what men earned, according to a Pew
Research Center analysis of median
hourly earnings of both full- and part-time
workers in the United States. Based on this estimate, it would
take an extra 47 days of work for women to earn
what men did in 2017. And let me be clear– low earnings are a problem
for both men and women. But generally speaking,
women are much more expected to be able
to live on wages that fall below the poverty level. More than eight times
as many women as men work in jobs with
sub-poverty level wages. And perhaps one of the
most important nuances here is that although on
average, women earn about 82% of what a man does,
this statistic has serious variation depending
on what race or ethnicity you are as a woman. Compared to white male
earnings, white women earn 81.9%, black women,
67.7%, Hispanic women, 62.1%, and Asian women, 93%. The wage gap is a
complicated issue with many driving factors. But one of the things
that can’t be denied is that it’s reflective
of a lot of broader issues in our workplace. And the fact that the racial
disparities are so stark is a good indicator
that the answer isn’t just about men versus women. But that is a good place
to start, especially when looking at a lot of our
preconceived notions and habits when it comes to the workplace. Lastly, one of the
toughest areas for women financially is our
reduced financial access. So women are often
expected to pay more for many of the same services. Yet, thanks to many factors
such as leaving the workforce to care for children or
earning lower wages in general than men, women on average
carry much more debt than men. In fact, women carry on
average 30% more debt than men, despite having slightly higher
credit scores on average. A lot of millennial women may
find themselves getting married or having children, maybe taking
a break from the workforce, especially as they get into
their mid- to late-30s. So then therefore, they
don’t have that income to pay back those loans. One of the big takeaways here,
as well as in all of the areas where we experience
financial disparity, is that our societal
expectations about who women are and
what they should be doing, and wanting, and
knowing seriously impact women overall, even
if it’s not true for them. For example, our
employers will assume that we’re less focused
on work and want to spend more time
with our children, even if it’s our
husband who wants that. We’re assumed not to
need financial literacy, so we receive less
of it, even if we want to take control
of our own money. We are seeing as
more expected to take the burden of mutual
choices, whether it’s having a child or, in the
case of reproductive health, not having a child. We’re expected to pay more
for products just because of our gender. These expectations
can be killer. And they can subtly
influence what our actual wants and desires are. In the long run, we
will all be better off if we live in a
world where people are judged on who
they are as a person, not with a ton of preconceived
notions about what their gender means about them. And hopefully for
women in the process, that will mean saving
a lot of money. Now, if you’re a woman
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thank you for watching. And don’t forget to hit
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Tuesday, Thursday, and Friday for new and awesome videos. Bye