By now, you’re probably already familiar with the notorious wage gap between men and women. A study by the Institute for Women’s Policy Research of full-time workers between 2015 and 2016 showed that white women earn 79 cents to a white man’s dollar. Black women earn 62 cents. Hispanic women just 54 cents.
But the stark financial differences don’t end there. There’s another less widely recognized discrepancy at work when it comes to women: the wealth gap.
The wealth gap is the lack of equity between men’s and women’s net worth. “Your wages are really your day-to-day, how you get by, how you take care of day-to-day responsibilities, pay your bills, anything that comes up during the day how you move through life,” says Rebecca Wiggins, executive director of AFCPE, a nonprofit organization training finance pros to understand the gap. “Your wealth is the long-term security.”
Examples of wealth include saved money, a 401(k), a home you own, stock investments — any net-positive assets you own that could bail you out of a bad situation should you lose your job after you’ve subtracted any debt.
Women are living with vastly less wealth than men. According to a 2015 study by Asset Funders Network, the median wealth for all single men was $10,150. The median wealth for all single women was just $3,210. The data gets even starker when broken down by race. While single white men had a median wealth of almost $30,000, single black women had a median wealth of just $200. Single black mothers? $0.
How did this happen? The existence of the the wealth gap is partly to do with the wage gap — women not being paid equally means “they’re not able to put as much away,” said Wiggins, “and that drastically impacts things like compounding interest”— and it’s also a historically systematic issue.
Women didn’t have substantial rights to own property until 1900 or to vote until 1920, giving them little power to control their finances or petition their government to change it. Consider too 250 years of slavery in the United States and the discriminatory laws that followed. “That’s essentially the difference in the wealth gap from a racial perspective is that many years,” Wiggins said. “Even things like the GI bill, where black veterans were left out… after they put their life on the line for this country,” Wiggins said. [Editor’s note: The GI bill provided World War II veterans college funding, unemployment insurance and housing.]
According to a January 2017 report by the Closing the Women’s Wealth Gap Initiative, systematic issues like this are still at play. For example, women are more likely to be denied a mortgage or pay more for their mortgage despite better repayment history, women of color and low-income women aren’t as likely to benefit from U.S. tax incentives and the “three-legged retirement stool” — Social Security, employee pensions and personal savings — is broken for women, who often have lower-paying jobs (making their Social Security payouts smaller) without pensions or 401(k) options.
If women — who, as of 2015, were the sole or primary breadwinners in 42 percent of families — aren’t financially secure and able to weather setbacks, that’s an issue for families and for communities.
The solution is both a matter of personal change and policy change, Wiggins said. “I don’t think we’ll have policy change until we take a look at gender bias and gender norms in this country and how those need to change,” she said. But “there are things being done.”
She mentioned paid family leave becoming a hot topic in her home state of Ohio. The Closing the Women’s Wealth Gap’s report also agreed paid family leave is a top priority as well as making tax subsidies more accessible for women and generally advocating for women to achieve pay equity, coaching women on financial security and reducing barriers to women saving.
While you petition for change in the government, take a look at your own financial plans. How is your credit score? Do you have emergency savings? “Women need to take ownership and be advocates for themselves in their financial lives,” Wiggins said. If your finances make you nervous, read up on good budgeting and saving practices or talk to a professional. If your budget has room to put more money away, learn about long-term investment opportunities.
You can also make a difference by advocating for your fellow women at work. “If you’re in a leadership position, it helps everyone when you help others,” Wiggins said. You can advocate on someone’s behalf or you can encourage your coworkers to speak up for themselves when it comes to pay and fair treatment.
Finally, continue to challenge your ideas about men and women’s roles, responsibilities and how they deserve to be compensated. “This is really about building better communities and making sure that our society as a whole is thriving,” Wiggins said. “We can’t thrive if we’re holding people back from their full potential.”