August is women’s month in South Africa. I suspect that the financial industry will advise women to budget better, save more, and take more risks.
The problem with women’s financial planning is not how they spend, save or invest their money. The principal problem is what women earn. There is no longer a discrepancy in most reasonably developed countries between the education levels of men and women. Yet studies still show that by their thirties, women’s pay already lags significantly behind their male equals.
From then onwards, the situation deteriorates. Women do not rise in the ranks as fast or high as men do. Of course, many women choose to take lower-paying jobs. Many leave the workforce temporarily or permanently to become the primary caregivers to their children. One of the main reasons for women leaving is the discrepancy between parental benefits for mothers and fathers in most countries. In most countries, maternity benefits are significantly more generous than paternity benefits.
When women emerge from the early child-rearing years, they face another obstacle. Menopause. Many find menopausal symptoms debilitating. Others experience discrimination because of the stigma attached to menopause. Recently the UK government launched an inquiry into menopause in the workplace after research data emerged that up to 25% of women between 45 and 55 considered leaving their employment. This would amount to one million senior and experienced people lost to the labour force.
There are many other reasons why women continue to earn less over their careers. Women typically take time off to care for ageing parents or extended family members. Also, women’s careers generally play second fiddle, which means their time is considered less valuable. They are then often the ones who sacrifice their ‘less valuable’ time (and earnings) for household chores or errands.
A quick calculation shows that depending on the extent of the gender wage gap and the lag in career progression, you can easily assume that women finish with 10 – 30% less retirement capital than their equivalent male colleagues. Considering that women, on average, outlive men by up to seven years, this translates to a staggering difference in financial security.
Some would argue that if a woman is married there is no need for concern. However, divorce amongst older couples is rising rapidly. And frequently, the woman walks away with a pittance compared to what she could have earned in her own right.
Most of this financial lag for women is the result of the lenses that society still applies to women’s worth. Although overt gender discrimination is becoming less common, subtle prejudice persists. How else do you explain the persistent gender wage gap or the lack of female leadership in every sphere of society? Or the prejudices that women even place on their own work? The vastly different expectations society has of men and women place women at a disadvantage.
Rather than shaming women for lacking financial discipline, we should take a good look at how we can ensure they have a fair chance at financial security. Pay women what they’re worth.
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