Are Women Poorer Than Men?

. 5 min read . Written by Vanshika Goenka
Are Women Poorer Than Men?

Kool Kanya brings to you FUNDamental – a series on women and money that will help you slay the finance game in tough times. This series is in collaboration with Basis, an app that powers financial independence for women through impactful content, supportive communities, and expert advice.

According to the Global Gender Gap report 2017, published by the World Economic Forum, “Female talent remains one of the most under-utilized business resources, either squandered through lack of progression or untapped from the onset.”

This affects not only the possibility of women like you and me to achieve financial independence but puts another hurdle right in our path. Inherently, we as women are seen as lower risk-takers when it comes to investments. While this doesn’t necessarily mean that the money we invest won’t grow exponentially, it is definitely a more cautious approach. This means, our money is likely to grow at a slower rate. So the need for us to make smarter investment choices is is all the more crucial.

Women live longer, but get paid less than men

We all know that the gender wage gap exists – it is the pay disparity between men and women that is the result of systemic discrimination against women. Why does it exist? Because women are often not seen as equal contenders for a job opportunity and are not seen as people who would stick around long term.

Women tend to fall behind their male counterparts simply because we tend to take more career breaks owing to motherhood; because there is a patriarchal expectation of women moving cities/towns after marriage, we are not seen as serious contenders for promotions and appraisals.

Historically, women have also long been subjected to ‘women-centric’ jobs which often pay less and are the first ones to be laid off in a pandemic.

Speaking of recent events, the pandemic has witnessed a similar curve. According to a recent report by the ILO, over 40% of women lost their jobs due to the pandemic. This was majorly due to the sectors in which women took up these jobs – hospitality, services, and food tech.

While women don’t make enough money compared to men, they spend more than them in their lifetime. Another shocking statistic revealed by The World Economic Forum exposed the sad and scary truth of gender pension gaps.

The study showed that women generally live around 4.5 years longer than their male counterparts while having to spend increasingly larger amounts on healthcare.

Why is this a cause for concern? As we live longer and costs pile up, meeting those costs later in life is a lot more difficult than having to plan for them earlier, when you are stronger, healthier and fitter.

Are Women Poorer Than Men?
Are Women Poorer Than Men?

The ‘pink tax’ is an added price to women’s products

The ‘pink tax’ is the price of being a woman in a patriarchal world – products marketed towards women come at a higher price for no valid reason! Women often tend to pay more than men for similar products including toys and accessories, children’s clothing, adult clothing, personal care products, and home health care products for seniors.

A study that compared 800 products across 90 brands specifically targeting a particular gender showed the following:

Toys and accessories targeted at women/girls were 7% more than those targeted at men/boys. The same stood for children’s clothing at 4% more for girls, and 8% more for adult clothing. A whopping 13% more for personal care products and 8% more for senior/home healthcare products.

Closer to home, if you pick up a Gillette razor marketed to a man, you would notice that the cheapest razor (for a pack of 5) is priced at ₹ 88.

On the other hand, if you pick up the cheapest razor marketed for a woman, you’ll notice the price at ₹ 80 (for a pack of 1). This is ‘the pink tax’ – an inherently higher price we pay for a product, just because we are women.

You can witness this across multiple products, shampoos, deodorants, soaps and much more. Many times not just in the commodities sections, but in the necessities as well. 

Are Women Poorer Than Men?
Are Women Poorer Than Men?

Studies show that women are less likely to choose good investment options

A study by The German Institute for Economic Research (DIW) evaluated data on the investment behaviour of more than 8,000 men and women. 

The study found that 38% of women invested in risky products as compared to 45% of their male counterparts.

While the study was left inconclusive, due to various other reasons, it showed that women were more likely to take more risk, if they earned more, thus concluding that risk and earnings had significant parts to play in a woman’s investment decision-making process. And why shouldn’t it? When we earn better, we face the luxury of spending time researching for better savings instruments. 

Stay ahead of the curve by planning meticulously

There are a few things under your control. While you cannot control the cost of things, you can most certainly plan for them.

Plan for a career break if you want to take one.

Many women choose to take career breaks to focus on motherhood – one way to plan is to build a career break fund and estimate how much you’ll need. Add a slight buffer to it and you will be all set to start saving.

If you’re struggling to arrive at the right amount to save, you can use the career break calculator at Basis. The calculator helps you arrive at the estimated amount in a few simple steps. What’s more? It adds an inflation buffer as well.

Similarly, as we already know that senior care products are 8% higher for women on an average, keeping up with that is also a task. This is why it is wise to also create a retirement plan.

Begin by estimating your retirement corpus. You can do this by using the retirement calculator on the Basis app. This calculator will help you gauge your current expenses and lifestyle while arriving at an amount that you will be comfortable with when you retire. This way, you can work backwards and build out your retirement corpus. 

With so many women working towards their financial freedom, getting started can feel a little intimidating. But nothing in this world is more empowering than having your own money to spend and save for yourself, just as you please. No strings attached, because you have earned it!

Basis helps you get started on your journey to financial independence with curated content, supportive communities, and expert advice. Visit our website here.

You’re invited! Join the Kool Kanya women-only career Community where you can network, ask questions, share your opinions, collaborate on projects, and discover new opportunities. Join now.