Wouldn’t it be great to find an extra $10,662 to invest towards your retirement, pay down debt, and improve your lifestyle? This is the gap in income currently experienced by women across the country.
But before I get to that, I want to clear up a couple of the errors I have made have made in the past. I have suggested that when a woman takes time off from work for whatever reason, kids, elderly parents, etc., she should enlist her husband’s or partner’s help in maintaining her retirement plan. The thinking here was based on the concept of partnership, where the business of running a family was something a simple as having a meeting, discussing the upsides or downsides and choosing the most financially feasible path.
Another error I am guilty of making is based on the assumption that women can approach investing in the same way as men do, hoping that the unemotional or coldly calculated decision making men are often credited with should also be employed by women. There are numerous studies on how women invest but those were done in order to identify how to tap that market, not why they are different.
Today, I like to look at ways to fix both of those mistakes. Women do need to become investors but they seem to have an awful lot of distractions keeping them from being better ones.
One way (Gina Robison-Billups, founder of MomsMakingaMillion and host of the radio show by the same name mentions it during the intro to the show), is to get the pay levels women receive on par with men. A recent study done by Forbes—and conducted by menoffers yet another skewed look at the wage gap women are experiencing in the workplace. I believe the Census Bureau now has that gap at twenty-three cents. What the study suggested was that compensation is somehow not the company’s problem necessarily, but the woman’s failure to understand how the networking process operates. There is a belief, at least according to this report that it is more than simply impressing the boss. The inability of women to create and maintain networks keeps the compensation for women lower.
The authors of that study are suggesting it is the woman’s fault she isn’t making enough money. While they try to generalize, they include men in the topic when addressing their conclusions, it isn’t really genuine. Men aren’t faced with a persistent pay gap.
They write that women and men “can increase their pay by having more effective corporate network relationships—but women have a particular opportunity. The wage gap is likely to persist, but there are things you may be able to do to improve your own situation.”
But the real pay gap isn’t in the inability to network. It is their inability to get the information on how much a job is worth when they are either jockeying for a raise or a promotion or simply applying at a new business.
While some of us could find the information, (I have provided a job search salary calculator for comparisons below) knowing is usually just a general indicator of what a particular job pays. For instance, a chief executive with an MBA looking for a job in the Portland, Oregon area will find it pays as much as $250k a year on the high side to $139k on the low side.
The problem is much more complicated than just finding what a job is probably worth. In order to get the pay women deserve, they need to know exactly what price the employer has put on the value of that job. All the networking in the world won’t help you if the employer looks at your salary history, offers you more than your last job but less than what they saw as the true value and you accept because it is more.
Unfortunately, the Equal Pay Act hasn’t done much so far. It has been around for decades and is awfully difficult to win and there is still a huge pay gap. It’s none too easy to even make the claim. But there is currently a bill being debated in Congress called the Paycheck Fairness Act that would allow you to find out what the person sitting next to you earns for the same job and to be able to do so without retaliation. If you ever had a reason to call your congressperson, this is it. If this act passes, this might be worth about $10,662. And that could change not only how women invest, but how they retire as well.