OK, I am a pessimist by nature. While many of the facts that MP Dunleavy cites in her column Women in Red ("Why women will run the economy") were interesting, I found it hard to whip out my pom poms and cheer for the news. Part of that is because the title is a misnomer (the article is about how to prepare for retirement, which is excellent information to share) and part of it is because there are so many downsides to her points. Let's go through the main points one by one, shall we?
While describing what she calls the "she-conomy" (cringe, although I did like her little joke: it "sounds like some kind of bad cable-TV reality series" - yes it does, so please do not use such silly terminology), Dunleavy says that women are in better shape than ever to prepare for retirement because we are highly educated. "Women hold 60% of advanced degrees among adults 25 to 29, the Census Bureau reported last month, and half among adults of all ages." This leads to her next point, which is that:
As more women attain advanced degrees, their earnings power is likely to rise, the Census Bureau predicts. According to 2008 data, the most recent available, people with bachelor's degrees earned an average of $58,613 a year and those with advanced degrees an average of $83,144.
That is lovely. Who doesn't love educated women earning more money? Except what the Census Bureau predicts seems to have very little to do with gender discrimination in the workplace. The Association of American University Women conducted a study that concluded that:
Just one year after college graduation, women earn only 80 percent of what their male counterparts earn. Ten years after graduation, women fall further behind, earning only 69 percent of what men earn. Even after controlling for hours, occupation, parenthood, and other factors known to affect earnings, the research indicates that one-quarter of the pay gap remains unexplained and is likely due to sex discrimination. Over time, the unexplained portion of the pay gap grows.
Granted, this study did not focus on people with advanced degrees. However, I'm not sure why that would differ. Evidence offered in the field of science supports my little hypothesis. As Blue Lab Coats explains, " in 1991 the 45% of the graduate students in the biological sciences were women- and this crept up to be just over 50% in 2001 (Figure 2-2, To Recruit and Advance) and was maintained as 47.9% of doctorates in the biological and agricultural sciences were awarded to women in 2006." She reports that only 21% of the full professors in biology are women, and 38% are assistants. So while women may make more with graduate degrees than they would have without them, they sure as hell aren't making as much as men with the same skills and experience. (Let us also not forget the number of loans most people take out in order to obtain the advanced degree. MomMD found that "that at least 40% of women in medicine have student loan debt of more than $100,000.")
Part of the problem, of course, is that many women also happen to be mothers. It seems, Dunleavy reports in a related article about the "mom penalty" (accurately named column), that if women are perceived to have children, they are paid less even if there is no evidence that they work less. Incidentally, this is a very big problem for not only meeting your basic expenses (and Dunleavy verifies my previous rantings on how much more expensive it is to be a woman), but also for retirement. It is really hard to save and invest money you don't earn, isn't it? In addition, we get less in social security payments because we earn less.
Finally on this point, the "she-conomy" doesn't exist at all for millions of women. The Center for American Progress reported in 2008 that over half of the 37 million Americans living in poverty are women. I hope that Dunleavy is correct and that this will change.
Her next piece of evidence for the improved economic lot of women is that we buy more houses. She wrote, "Women are now the primary home purchasers in nearly 25% of all deals, up from 14% in 1995, according to the National Association of Realtors." Having assets are good, so this sounds like a great advance. Except that in a related article, Dunleavy provides the evidence that makes me justified in being gloomy:
A 2006 study (.pdf download) by the Consumer Federation of America indicated that women were 32% more likely than men of similar income to carry subprime mortgages. Those subprime interest rates topped 7.66% when the average prime mortgage rate was 5.87%. On a $100,000 loan, that's nearly $120 a month more -- about $43,000 more over 30 years. Women were 41% more likely to end up with high-cost subprime loans, at rates above 9.66%.
Yay! We own more houses and we pay more for them and are more likely to be foreclosed on them! This definitely shows that we rule the economy! Go women!
The penultimate point Dunleavy makes before she moves on to give very good advice on financial planning is that the "she-conomy" rocks because "women control about $4.3 trillion of $5.9 trillion in U.S. consumer spending, calculated the authors of "The Female Economy," a study published in the Harvard Business Review in 2009." I could also get excited about this if it actually translated to something more useful than vile Bounty paper towel ads encouraging women to use their superior product while cleaning up after their bumbling man-child husbands, who apparently cannot wipe up their own messes, even if the woman is in another room when the spill happens and the like. I could also get excited about it if consumer spending didn't lead to an average household credit card debt of $8000, wrote Dunleavy in yet another column.
Dunleavy's last point is specious. She says that women occupy 49% of the workforce (although her stat is old - it is now more than 50%, thank to the economic downturn leading to people with better salaries getting laid off), and that we "constitute 43% of the nation's top wealth holders -- those with assets of at least $1.5 million." I love this because it links all working women with the top one or two percent of income earners in America. Wouldn't that be nice if it came out to more than a few thousand women?
I want to be excited about women's economic security, I really do. It's just hard for me to get behind these indicators of progress when they don't include most women. If that's what the "she-conomy" means, I'd rather try and improve the regular economy for everyone.
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