The Financial Costs of Being a Woman

Women today must plan to live longer, while earning less, and shouldering the burden of child and elder care.

Jackie Porter, CFP 8 March, 2021 | 1:48AM
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IWD 2021

International Women’s Day provides women everywhere the chance to reflect on all that we have achieved over the past century. We have so much to be proud of. In 2021, there are so many more female leaders to point to - both at the helm of Fortune 500 companies, as well as at the highest levels of governments around the world. 

Most recently, we had a chance to see Kamala Harris voted in as the first female vice president of the U.S.. She is also a woman of colour. I know for many Black and Brown women, to see a woman that looked like us taking such a powerful seat at the table was incredibly heartening.  It is in these moments of victory that we are reminded that the possibilities for women are endless, especially if we are given equal access.

There has never been a more important time take stock of our past, and to determine where women will need to go next. We are at an inflection point. The pandemic has set women back, as more and more women opt out of the workforce and struggle with the overwhelming demands of caregiving, both for children and elder parents, causing what many are calling a “she-cession”.

The long- term effects will not be fully calculated for many decades. In fact, if gender equity policies prior to the pandemic remained intact in the workforce, women would not have achieved parity for another 257 years. Our society can certainly do better than this! It will mean government leaders and corporate stakeholders prioritizing gender parity as women become more confident advocating for themselves to make their voices heard.

The Intangible Financial Costs
As every woman knows there are intangible costs of being a woman. These need to be identified so that we can continue to work to overcome them. One of the biggest financial threats of being a woman is the cost of gender discrimination and its impacts on a women’s psyche.

Put another way, we must call out the patriarchal judgement we face while occupying space in a patriarchal society. We can never fully come to grips with impact of this patriarchal judgement on our confidence and on our self esteem. The weight of this judgement often erodes our ability to fully advocate for ourselves. We may never be able to fully put a price tag on the long-term effects of gender discrimination and the consistent toll it takes on a woman’s mindset.

Companies and governments must immediately take stapes toward harm reduction. This also makes financial sense.

The Compelling Case for Gender Diversity
There are tangible financial benefits associated with engaging a diverse workforce. In 2015 the Mckinsey Global Institute estimated that advancing women’s equality could add US$12 trillion to global Gross Domestic Product by 2025. Adopting policies against gender discrimination may also limit the risk of litigation and financial exposure for corporations who have not yet done so. Yet major companies are still lagging on reaching gender parity in their workforce. The numbers trend even lower when race and gender diversity initiatives are measured against prescribed targets.

Unfortunately, a lack of diversity in senior positions appears to be causing psychological harm to the women who are beating the odds and occupying senior roles in these companies. As women move up the corporate ladder there are fewer and fewer women in senior positions which leave women feeling isolated and feeling more pressure to preform.

The Real Costs of Being A Woman
Wage gap apart, women also live longer by four years, and need to figure out how to save for a retirement, often with less resources. The reality is that many women are not prepared to manage their finances. Plus, the public pension does not factor in our longer life expectancy.

From much earlier in life, from birth, in fact, women are at the mercy of retailers who still charge a premium on products that cannot be differentiated except from a gender perspective. This includes everything from women’s razors, haircuts, colours etc. In is almost impossible to escape paying a ‘female tax ‘while proportionally earning less income.

Why Addressing Gender Parity Now is Especially Important
Women also typically do most of the unpaid work when it comes to taking care of children and aging parents. The increased demands of child and elder care during the pandemic is putting women  at risk of forgoing future career opportunities. This could ultimately put in danger all of the past career gains women have made.

A Missed Opportunity for Stakeholders
Missing our on a diverse workforce is a missed opportunity for corporate stakeholders. The research shows that companies that employ a diverse workforce in all levels of management have an increased ability to outperform their peers. Women and women of colour offer diverse perspectives that can allow corporations to appropriately target their diverse clientele.

Six Steps to Level the Playing Field
What can we do about this? A recent survey from Deloitte reached out to 400 women dealing with the pandemic. The survey provided significant insight on what support women will need to move forward, so that we can continue to build on our past successes and prevent future major setbacks. 

1) Flexibility: The pandemic has shown that productive workers don’t need to be in an office. If your company wants to help women to progress, consider creating a flexible workday, with reduced or compressed hours to create a more manageable work/life balance.

2) Empathy: Lead with empathy and Trust. Foster an empathetic culture in your organization that builds on honest communication and trust.

3)Mentorship: Promote networking and mentorship. Offer opportunities in a variety of ways, such that women can access them easily without conflicting with their commitments outside of work.

4) Learning: Create learning opportunities that fit with their everyday lives.  Curated digital learning platforms are a great example.  

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About Author

Jackie Porter, CFP  Jackie Porter is an award-winning financial planner who has been in the financial industry for the past 23 years serving thousands of families, established businesses, and professionals in the Greater Toronto Area. 

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