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I always think that International Women’s Day should be a day where we celebrate women. It should be a time to share all the amazing things that we do with the world. However, I’ve grown to resent it a bit.
Every post, video, Tweet, TikTok, or mere muttering of IWD is met with an army of angry (typically) men that want to raise the fact men suffer too. It is tiring. It is exhausting. But I know that we are not alone. Every event that looks to tackle some form of inequality is met with the same nonsense. But it is for that reason that we have to fight a little harder.
So today I’m here to highlight some of the challenges that we still have to address in the financial world to achieve equality. Yes there are 10! Ugh!
Gender Pay Gap
The most talked about and probably the one that has the biggest impact. Although it is illegal for employers to discriminate on the basis of gender, somehow it is still happening. There are still women who are being paid less than their male counterparts for the same work.
The difference is put at around 18%. This means that, on average, women are paid just 80% of what an equivalent male is paid for the same work. The reasons for this run deep. It could be because men feel more confident to ask for pay rises, or old-fashioned ideals of hard workers (ie staying in the office late) don’t fit around childcare obligations normally left to women.
Whatever the reason, the facts are there. Women get paid less. What is worse is that it will take 99.5 years to close that gap.
More likely to earn the minimum wage
Leading on from the gender pay gap, you get the fact that women are more likely to earn the minimum wage. This split works out at roughly 55% of all minimum wage earners being women.
The reason for this is that women are more likely to seek out part time work, which is usually associated with lower median wages. Women often are expected to manage childcare or care of another family member, which means that they need greater flexibility in their work.
It also means that any conversations around increasing the National Minimum Wage hit women harder. An increase in this amount will have a greater impact on women than it does on men.
Whereas the pay gap looks at how women are being underpaid in a snapshot of their lifetimes, a look at the pension gap shows us that this picture expands over a lifetime. It is here that we see the gap between men and women increase to 40%.
Naturally, this is impacted by the pay gap, but exacerbated by factors such as maternity leave, part time work, childcare, and many of the other issues listed on this page. For example, auto-enrollment for pensions only kicks in at £10,000 per year. Some part time jobs that fit around childcare would put women below the threshold for this.
To address this situation action is needed from the Government. There needs to be a reform around workplace pensions and how the state pension compensates those that participate in unpaid care (both children and other family members).
Zero hour contracts
Again nearly 55% of zero hours contracts are held by women. These offer little to no stability in terms of hours and pay. They also put women at a disadvantage when it comes to trying to get on the property ladder or getting loans or credit cards. With inconsistent income, they could be at risk of higher interest rates which can have implications across other areas.
The reason that women are more likely to accept these jobs is because they offer a greater degree of flexibility. Two thirds of people with zero hours contracts are working part-time.
Despite women typically preferring to hold their wealth as cash, rather than investing, they still have, on average, £8,000 less saved than men. Now that is a huge amount of money, when you think about it in terms of financial stability.
£8,000 is a healthy emergency fund that would give you financial space to deal with broken appliances, an MOT fail, or enough to live on for a few months if you need to quit a toxic job. That sort of money is significant enough to make a difference to people’s lives.
When it comes to building wealth, it is important to look at the investing gap. Just 20% of women owning an investing product, compared to 33% of men. But this is one section with some good news.
The gap is actually closing here. It is slow but it is getting there. Furthermore, women actually make better investors than men. Largely because they tend to choose less risky investments and instead choose to invest with long term propsects in mind.
Many believe that the investing gender gap could be closed in as little as a few years, but it is largely down to the efforts of investing corporations working to get more woemn on board. Let us hope that we continue to see positive steps forward in this area.
64% of all UK debt is held by women. Not only that but women are likely to have higher interest rates and hold the debt for longer. It is a grim picture but one that makes sense inline with the pay gap, the lower savings, and the zero hour contracts.
When you are earning less, have less job security, and less money in the bank to full back on, it creates a recipe for debt. It can be hard to break these cycles too. With no savings and ever increasing debts, with ever increasing interest rates, it is hard to step out of that place.
Student loan debt
Women are more likely to apply for university courses than men. Although this can serve them well in terms of career prospects it is also means that they carry the burden of student loan debt. When comparing those with degrees, women take longer to pay off their student loan debt than men. Women take 16 years and men, on average, 11 years.
This difference is once again attributed to the fact that women are more likely to take time out for childcare. This means that their ability to pay more towards their debt decreases. It is also due to many of the other factors, such as pay gap, minimum wage etc. They are all linked.
Earn below living wage
With lower wages comes the increased risk of earning below the living wage. This means that 24% of women are facing in-work poverty compared to 15% of men. No one should be facing in-work poverty, but it is clear that there is a disparity between the genders.
Luckily there is some positive news on this front, as the number of jobs paying less than a living wage has decreased in recent years. It has fallen below 20% for the first time since 2012. There is still a long way to go, with 1 in 5 employees earning below this figure.
Loss of earnings due to childcare
It has been shown that every year that woman takes out of work to care for children, her future earnings fall by 4%. This is significant. It is not uncommon for women to take at least a year on maternity leave. Yet this can immediately impact on earning potential.
More needs to be to both compensate women for the unpaid labour that they do in homes and families. In addition, employers need to understand that this time out of work does not deskill us. Speaking from experience, I would make a far better employee now than pre-kids. My ability to multi-task, manage people, and stay clam in a crisis is far improved.
Equality is a two-way street
And remember that whenever we improve the experience for one group of people, we improve it for everyone. There is no “if you get that, then I won’t have it any more.” It is possible for women to be paid the same as men without men suffering in anyone. In fact, they will be better off too.
P.S. You can replace “gender” in this article for “race”, and “women” with “people of colour” and it will still be true. gender financial disparities are not the only fight that we need to have.