The Gender Pay Gap is Closing, But Will Women’s Financial Situations Improve?

One of the results of the march of time is that the gender pay gap is closing. Millennial women are catching up in terms of receiving equal pay for equal work.

However, the issue with the gender pay gap is that it’s not just a matter of getting equal pay for equal work. Over time, the issue with women’s finances is that, in many cases, it’s more about the long-term effects related to:

  1. Being dependent on a partner or someone else for finances, due to a traditional arrangement. Even if a woman has a part-time job, it is still fairly common for her to rely on a partner for most of her living.
  2. Traditionally filling the role of caregiver. Women often take time off for years to stay home with children, and when there are elderly that need to be taken care of, women are often the ones to do this.

These things are not bad¬†things. They are admirable. They are things that many women want to do and feel fulfilled doing. I need my work, and mothering doesn’t appeal to me very much. There’s a reason that I only have one child, even though I work from home.

Money Girl

ANYWAY, the point is that the realities of our society and women’s traditional gender roles contribute situations in which women, regardless of whether or not they earn as much as men for the same work, have a lower earning power over their lifetimes than men.

Women might be leaving as much as $500,000 on the table over their lifetimes, because they don’t negotiate higher salaries, and because they miss out on earning years. Other studies point out that women are at greater risk of financial difficulty in their later years because they have longer average lifespans than men, but lower overall earnings, so they might not have what they need as they age.

If their partners have done well, and saved well, a woman might be provided for as she ages, but that means that she has to rely almost entirely on someone else for her financial well being. If the partner hasn’t done well, and a woman doesn’t have her own assets, then she could be in trouble.

And what about women whose partners pass on, leaving them to care for children or other dependents? That can be even worse, if the woman doesn’t have the education or skills to replace the lost income, and if there isn’t enough life insurance to cover. What happens as the result of divorce?

While it’s great that the pay gap is shrinking, and it should be shrinking, that doesn’t mean that women are financially stable, and it doesn’t solve all their problems. Especially since, as a woman, working toward your own financial solvency could actually jeopardize your marriage if you end up making more than your spouse.

photo by: Tax Credits

2 Responses to The Gender Pay Gap is Closing, But Will Women’s Financial Situations Improve?

  1. I have been thinking about this a lot lately. Partly because, as a teenager, my plan was to be financially dependent on my husband. However, I was also raised by an equal opportunity household including a feminist and working mom. But when the time came for me to quit my out of house job and be with my growing family, it was *very* difficult. I was not prepared for how emotionally difficult it would be to be a dependent adult. Especially when my “contribution” to the family had no monetary value put on it. It was so ethereal, and unvaluable. I now work although I still consider myself a stay at home mom. It was a career that has been born of my love for mothering and I feel good as long as I acknowledge that parenthood is full of ambiguity and uncertainty. I do *not* want my daughters to be so unprepared. I want them to know that if they choose to stay home, they are really making a financial contribution, even if there is no check attached. I want them to be able to find a job, if they wish, that supports motherhood in the best way for them. I want them to have husbands who feel safe regardless of their wife’s earning power…

    Sorry, I didn’t realize this was going to be a such a rant. I wish things were different.

    • Thanks for sharing your thoughts! I think a lot of people discount the emotional strain it can be to be financially dependent on someone else. Sure, you can say that the non-financial contributions that a stay at home parent makes are just as important (or even more important), but that doesn’t change the fact if you want or need money for something, it has to come from someone else. And it’s scary, scary, scary to think about what happens if that financial support you’re so dependent upon is gone.

      That’s one of the reasons I’m such a fierce supporter of side gigs, especially for stay at home parents. At least there’s some way to add to the earnings, and it’s possible to set that money aside in an IRA for the future. Plus, if you have a side gig as a stay at home parent, it’s possible for you to develop it to the point where, if your partner does leave or die, you at least have something to fall back on; even if it isn’t much, it’s still better than nothing.

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