The Gender Wealth Gap: There’s More to It than Pay Equity
When we talk about the gender pay gap, the conversation often centers on women earning less than men. Currently, women make about 82 cents for every dollar a man earns, with Black women earning even less. [1]
But focusing solely on this pay gap only scratches the surface of a larger issue: the gender wealth gap. This is where the real financial disparities come into play.
What Is the Gender Wealth Gap?
Wealth isn't just about how much you make; it’s about how much you keep and grow.
According to the World Economic Forum, wealth is the accumulated value of assets at the end of a career for individuals who started with similar roles and skills. [2]
In layman’s terms, it's what’s left after all your working years.
The difference between the amount of wealth women and men accumulate is pretty big. Women own a meager 32 cents for every dollar a man has. [3] The gap widens even more when we factor in race and ethnicity.
Why Is There a Gender Wealth Gap in the First Place?
Several key factors contribute to why women end up with less wealth than men:
Gender pay gap and leadership gaps. Women earn less money than men for similar roles. Plus, there are less women in high-paying leadership positions. [4] This combination means fewer opportunities to build wealth through earnings over time.
Career interruptions. Women are more likely to step away from their careers to care for children, aging parents, or sick spouses. [5] These breaks can have a big impact on career advancement and earnings.
Investment behavior. Women often invest less than men do. According to a 2023 Forbes article, less than half of women invest compared to 66% of men. [6] Investing is crucial for growing wealth, yet many women miss out on its benefits.
Financial literacy and confidence. Many women don’t feel confident in financial decision-making and lack financial knowledge. This can result in less effective investment and savings strategies. [7]
Why Is It Important to Address the Wealth Gap?
So why does closing this gap matter? As Thasunda Brown Duckett, CEO of Chase Consumer Banking, put it in a 2019 Harvard Business Review interview:
“With more women being single parents, being the head of their household, waiting longer to get married, we have to make sure that they are creating wealth for themselves, and not relying on someone else to have the knowledge and manage those decisions.” [8]
Addressing the wealth gap is important not only for women individually but for the next generation of women too.
How Do We Close the Gap?
Closing the wealth gap starts with taking responsibility for your financial education. Don’t wait for someone else to give you the information you need to build a financial future.
There are countless resources available to help you get started and boost your financial literacy:
YouTube videos and podcasts: Learn about a variety of topics in a convenient format. Just be sure to sift out the experts from the rookies!
Digital courses: Online courses by financial advisors can offer more in-depth knowledge.
Local bank: Many banks offer educational resources and financial planning workshops.
Library and community center: Check out books and attend seminars at no cost to you.
If you need more personalized support, consider working with a financial planner or coach.
(Check out our recent interviews with financial experts Latika Tillis and Kenia Newell.)
Conclusion
With the right knowledge and support, we can make strides towards closing the gender wealth gap. Embrace opportunities to learn how to invest and manage your money well.
And remember, if a man can learn it, so can you!
Referenced Articles
Pew Research Center. The Gender Wage Gap Endures in the U.S.
World Economic Forum. Wealth Equity for Women Can Be Achieved. Here’s How
Ellevest. What Is the Gender Wealth Gap and How Can We Close It?
World Economic Forum. 2.6 Gender Gaps in Wealth Accumulation - Global Gender Gap Report 2022
Investopedia. How Women Can Break Through the Gender Wage Gap Barrier
Forbes. The Financial Services Sectors' Role In Closing The Gender Wealth Gap
McKinsey. Women as the Next Wave of Growth in US Wealth Management
Harvard Business Review. Closing the Gender Wealth Gap
Leah Hird is the career and money editor for Hope Magazine. She also freelances as a ghostwriter, specializing in crafting engaging marketing content for women-led businesses. You can follow her on LinkedIn.