Is women’s income inequality a real thing? Do women really earn less than men? What factors help men make more than women? What is helping drive this income inequality in America? Join me for this deep dive into many of the factors that are creating the financial gap between men and women.
Women’s Income Inequality – Transcript
Hey! It’s Kelly Harrell, Financial Feminist and Founder of Money Tree Academy, coming to you live today for the first time. We’ll see how this goes.
Because somebody challenged me yesterday about talking about what happened, or not what happened, but yesterday was April 4th, which is the Equal Pay Day, it’s a Gender Equal Pay Day. And the significance of April 4th is that between men and women, it’s the day into which this year women must work to earn the same amount as men earned last year.
For example, January to December of last year, men had to work and earn x amount of dollars. For women to earn the same x amount of dollars they had to work that same timeframe last year plus all the way from the beginning of this year to April 4th. That’s what Gender Pay Day represents.
What that means is that women earn about 80% of what men earn with their income. And I just wanted to show you a little chart here that I pulled up of the American Community Survey. This is 2007 data and it shows the states, the gender differences.
The darker the state, the closer women are to earning 80, maybe even more percent, the same as what men do. So about 80 to 90% of what men tend to earn. The lighter the state means greater women’s income inequality — that women are earning even less, maybe closer to only 73% of what men earn. That’s one thing that has an impact for women’s wellbeing and earning capacity around money.
Another factor is right here. So take a look at this. Right there, you’ve got all the different industries and the percentages that women earn in terms of income compared to men. In Agriculture and Construction, those are the two highest ones. Everything else, you’re looking at 70%. So all across the nation, all across industries, communities, families, and so on, women are statistically speaking earning a lot less than men are, and that’s crazy. What’s going on? And what do we do about it?
Well, right now, in the kind of the modern day, when women start off in their careers much like men, they are earning about the same amount of money. So it can be very common that when a woman starts a job and a man starts a job early on their career, their pay is the same. It’s over time that things start to change and that’s where we have a lot of the concerns as women and we need to better understand these dynamics that are occurring and strategies that we can take on, to begin to change that.
So let’s just start first with some of the contributing factors. What has a woman earning less than men especially when she starts off her career earning about the same amount as men?
One of the first things, we just said like the salary offered, it can be about the same, sometimes it’s less but let’s just assume it’s the same. And what can happen is that, when it comes to ‘raise time’ or if you have your own business, raising your fees with your clients, women can be very uncomfortable with asking for more money just because of how we are socially acculturated. We are acculturated to be more kind and have compromise, to be nurturing, to protect the relationships above all else. So the very thought of negotiation can bring up threats to our feelings around relationships. It can be very uncomfortable for women to ask for more money.
Men are more acculturated to be assertive and confident to ask for what they want from a situation and when they do so, that is being seen as competent for a man. When a woman asks for what she wants, that can be seen as being pushy or selfish.
We get those messages even when we were young children. Girls, often when they ask for what they want, they have heard many times, “Who do you think you are?” for doing that. And even within their own friendships. If you make more money than your friends or you have some expectations, your friends might even push back on you like “Who do you think you are to ask for all that?”
So there can be some “deserving” things that are in there. Negotiations or asking for what you want and learning how to negotiate effectively is, these differences between men and women can have a huge impact on what she is making in her career over many, many years.
Another piece can be relationship dynamics, especially marital dynamics. With women, there are often subconscious factors that I have found with my clients and just through my research, that there are some subconscious or even unconscious concerns that if they make more, if you’re married or let’s say you’re dating, if you make more than your spouse or your boyfriend – a male spouse or a male boyfriend in this case – that can create some discomforts between you and him, that because of these kind of social acculturations that we have ‘will he feel disempowered?’ ‘Will it affect what happens in the bedroom?’
Those are real things and I have had friends, clients, family members…These are things that women think about and it kind of works in our computers that tends to hold us back, that if we make more than him, how it will affect our relationships? And again, we hold relationships in very high regard. These are dynamics that really do play into the equation for many of us.
Men are more acculturated to be assertive and confident to ask for what they want from a situation and when they do so, that is being seen as competent for a man. When a woman asks for what she wants, that can be seen as being pushy or selfish.
Another piece around that could be with our friends. If we make more than our friends do, how will they feel about us? Will they start to ask for more money from us? How will that affect the relationship dynamic? And it can be very scary for women. I think men are much more comfortable with having friends that earn at all economic levels. Maybe they get even inspired and challenged to compete and go further with that. It can be different for women because of the ways in which they connect and maybe even compete within themselves. So it can create some tensions in a way that men might not experience. That is another piece, just that relationship dynamic in terms of income differences.
Another one can be if she decides to have children. Whether she’s married or if she’s a single mother. When a woman steps out of her career, it can be a full stop to some of her income potential for a while.
Let’s say a man and woman, both committed a job, they’re both earning $50,000. When the woman decides to step out and have a child, if she does, and I did, by the way, so this part can be my own story too, stepping out and having a kid. And her income can come to a stop if she chooses the unpaid labor path of being a stay-at-home mom and all the different dynamics that entails. With that, her income stops.
His income continues to increase, right? It increases over time and let’s say five years later, she decides to come back in. Now, he’s making 60,000 and she is only making 50,000, when she reenters her career. So there’s a $10,000 difference, right there.
Now the impact, though, to their careers and their financial wellbeing over extended periods of time are tremendous. So let’s say that $10,000 was invested at 7% over a 30-year career. So between those two things, her income outcome, her financial wellbeing; that $10,000 difference invested for 30 years at 7% is $1,000,000. That is a $1,000,000 economic difference between her and him.
Now, let’s say the income difference is only $4,000. In that case, you’re still looking at a $400,000 lifetime economic difference. That’s huge! And if you choose to be a stay-at-home mom, then you have to work that into your family’s financial planning of some sort because it will have an impact on you and what you have available to you for your longer life term of retirement.
Women – one of their biggest fears is around becoming a bag lady, becoming destitute. So if she’s not taking this piece into consideration around how being able to save that money and earn that money right now, and put that away for her future and that’s not done and built into the equation when she decides to stay at home, it can have devastating consequences for her long term.
Another piece that can figure in for women in terms of their financial wellbeing and avoiding women’s income inequality is the inner beliefs, the stories that you took on in your childhood. Oftentimes, we absorb a lot of that from our families before we’re out of elementary school, and even as young as one or two years old. So understanding what some of those family money stories are, and those gender dynamics between men and women can have huge impacts on how you show up and what kind of value you claim for yourself in the world in terms of money.
And another piece too – and this is something that I work with a lot with my clients on – is that inner value that they bring to the table. Many women just don’t know it. They don’t know how totally and completely valuable they are. And one of the coolest things to do when I work with a woman is just going in and we look at what those values are, what their inner skills and talents and abilities, interests and their work history and we pull that together and then we do brand research to find out what the market, what the people around them really value about them, and it’s so incredibly eye opening. And we start to marry that up with what the market wants and wow. When women start to understand what their real value is, it is just transformative.
One thing I will say is, kind of an interesting fact to share, with Fortune 500 companies, the ones that have a greater percentage of women on their boards are the ones that tend to be more profitable and deliver more return for their stakeholders. There’s a message in there. And that is that when women have more say inside of organizations or are more valued for what they contribute, companies actually have a very positive higher performance impact on their bottom line.
That’s the same as true in our marriages, in our friendships, in companies, in our businesses – all across the board. If this were Congress, it would be so much better, our government would be so much better if we had greater representation of women in there. Just to balance two things out. Because men and women together can be a formidable force when they bring both genders and the values of both genders to the table.
What can women do about this? How can they start to transform these women’s income inequality gaps?
Well, one of the ways to help minimize the chances for women’s income inequality to occur is increasing your awareness. Watching this video and listening to what I’m saying and doing your own investigations to learn more about it. Finding out all the ways in which women have some systemic disempowerments around their access to wealth. Examining your own beliefs about women’s income inequality. Just looking up one of those stories, how do you think differently than the men around you? Get into a great beer conversations with men, crack a couple of bottles open and just start talking about it and learn and explore what those differences are.
Another one is getting comfortable with being uncomfortable. That when you go into asking a client or an employer for more money, getting that discomfort, just embracing it, and being with it and learning how to still ask for what you want despite the fear and the discomfort that it brings up. Increasing your communications with others – with your spouse, with your boyfriend, with your brothers, with your fathers… Getting comfortable with money conversations and exploring a lot of that.
Another step to minimizing women’s income inequality can be learning what your value is as a woman, as I was alluding to earlier. The more that you can own your value and step into your feminine power and say “Hey, I’m totally and completely worth it”, and be able to say “this is why you need to hire me” or “why you need to work with me” or “why you need to pay me this because you can’t afford not to work with me”. That’s where I’d like to see more women standing.
Looking toward those opportunities out there in the marketplace that will pay you what you deserve to earn for the value and the greatness that you really want to bring to the table. These two things have to match. If you are going to bring your full on greatness to the table and not be paid sufficiently for it, that feels like crap so, no. There’s a lot of stops in between there but starting to think about that is so empowering and can raise a woman’s ability to have wealth.
Going for “no” is another piece. Getting comfortable with getting “no”. So often we walk around our lives just trying to avoid having somebody tell us “no” for something. But, if we instead put our focus on looking for “no’s”, actually trying to collect ten “no’s” throughout the day and that’s what our game plan is, then it’s shocking how many “yes’s” we get.
When I used to be an employee, I would play a game whenever I’d take on a new job and I would always ask for, I don’t know why, but three to five thousand dollars more. I would just ask for it and it would make my heart race but it looks like okay, all they can do is tell me “no”. It’s not like they’re going to rescind the job offer. So, I would always ask for more and I would always get it. It’s always like woo-hoo! So it’s exciting. Just always be willing to go and ask for more of what you want.
Understanding your value is what we’ve talked about. (Sorry, I’m looking down here on some of my notes just trying to keep myself on track.) And then just being prepared to respond to any kind of pushback either from a client or from an employer. Know and anticipate what some of those objections might be. Being able to respond to those objections with things that further illustrate your value and what you bring to the table and why they can’t afford to not work with you or hire you.
Knowing those things will make you or let you feel more confident when you come in and you start asking for things knowing that you have seven or eight more things lined up behind it and then you can pull that out of your backpack and say, “But here’s how I am even more valuable than you realize.” So being prepared to respond. Not react, but respond to those kinds of objections.
And the last thing I’ll say is what I was kind of talking about before. We have to bring men more into this conversation. Talking with them, helping them to see the pockets of women’s income inequality and bringing their awareness to it will only help our objective to erase this income disparity.
So I just want to leave you with that. Go out there, have conversations to gain a better understanding of women’s income inequality, crack a few beers, open a couple of bottles of wine, whatever it takes. Get in conversations, start exploring and in the meantime, you can also pop over to my website, which is MoneyTreeAcademy.com.
There are a couple tools on there, around revealing your money mindset and learning how to grow your own money tree that you might enjoy checking out. You can also join my newsletter. I’ll keep you updated and posted on when I have new videos like this available, which should be about weekly. And just to stay in touch with the programs that I have available and some of the new exciting things. They’re going to be coming out very, very shortly.
So thanks for joining me on this exploration of women’s income inequality. It’s Kelly Harrell, with MoneyTreeAcademy.com. Bye.
Also See: Earn What You’re Really Worth