The Continued Gender Pay Gap for Women Working Towards Retirement
By Ann D. Blakey, CFP®, MBA
Women have made enormous strides in recent decades to achieve greater equality and pursue higher opportunities in the workplace, yet the gender pay gap continues to devalue women’s contributions. The gender pay gap, also known as the gender wage gap, refers to the difference in earnings between men and women for performing the same work at the same qualification level.
Although the gender pay gap broadly affects all women, women of color experience even greater disparities than white women in the workplace. The pandemic has only worsened this problem.
We'll review the current state and share how Washington Wealth Advisors is focused on supporting women building their wealth - given the effects of the gender pay gap - yet pursuing a proactive approach to their retirement and financial independence.
The gender pay gap wasn’t granted much serious national attention until the 1960s when President Kennedy signed the 1963 Equal Pay Act into law, stating that paying men more than women for equal job performance and responsibilities was an “unconscionable practice.” At that time, women were earning about $0.60 on the dollar compared to men’s earnings.
It wasn’t until the 2000s that additional legislative measures were enacted to address the ongoing reality of the gender pay gap. Lilly Ledbetter, a former employee of Goodyear Tire and Rubber Company, sued her employer under the Civil Rights Act, maintaining that she had been unfairly underpaid for nearly two decades.
Although Ledbetter ended up losing the suit in an appeal, her actions sparked a movement that resulted in the Lilly Ledbetter Fair Pay Act, which expanded provisions for women to sue employers whom they believed had discriminated against them.
The gender pay gap stubbornly persists, as 2020 data revealed that women are only earning $0.84 for every dollar their white male counterparts earn. Further, Black women earn 63%, and Latina women only earn 55% of what white, non-Hispanic men earn.
Despite large increases in the number of women working in paid jobs, women continue to be overrepresented in low-paying industries such as education and retail. On the flip side, even within higher-paying industries, women are underrepresented in leadership and management roles.
Several factors contribute to this reality. Statistically, women continue to experience greater discrimination in the workplace. Additionally, when mothers take time off to recover from childbirth or care for their young children, their career trajectories—and earnings—stall. And some women may feel they can’t take the risk to negotiate a better salary or benefits or look for a new position.
What About Retirement and Financial Independence for Women?
Decades of unpaid work and career interruptions can have long-lasting impacts on women’s lifelong earnings and career opportunities. The gender pay gap can make “retirement” or "financial independence" seem like a dream for many women.
Due to lower earnings, women receive less in Social Security and pension income and have less money saved. As a result, women typically start their retirement years with only 70% of the resources men have.
When added to the fact that women tend to live longer, this does not add up to a secure retirement for many women.
Given these ongoing challenges - which have only been aggravated by the financial setbacks from the Covid-19 pandemic - the need for women to strategically plan for and manage their finances is greater than ever. The women-focused team at Washington Wealth Advisors is poised to help. To see how we can assist you in planning for your financial future, please call our office at 703.584.2700 or schedule a meeting with Ann today.
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Washington Wealth Advisors is a fee-only registered investment advisory firm serving busy families, executives, women building wealth, and small business owners. We provide Wealth Advisory Services—financial planning coupled with asset management—guided by a personalized investment strategy based on each client’s unique goals. Our unbiased advice, independent approach, and proactive investment management help to support our clients’ overall financial peace of mind.