Women and financial challenges

Many females face financial difficulty.  It has been difficult for centuries for women to become financially independent.  Statistically, recent research still shows that women as a whole are earning less money than men.  Although there has been much improvement over the last one hundred years, men are still making more money, and consequently have higher retirement income.  There are a few reasons for the gap in wages between the sexes, and perhaps by exploring them we can discover ways to help more women achieve financial stability.

In a total population survey conducted jointly by the Bureau of Labor Statistics and the Bureau of the Census the income distribution is as follows:
Mean salary
# earning $35k-$37k
# earning $60k-$62k
# earning $100k-$149k
Out of a population of:

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The results of the survey of approximately 110,000 men and 120,000 women, show that the income category with the highest concentration of men is $20k-$22k with just over 5,000 men earning within that range.  The income category with the highest concentration of women is $5-$7k with just over 8,000 women earning within that range.  The average salary for men was significantly higher, by almost 50%, than the average salary for women.  There is no question about the fact that men are earning more money in general than women.  What we need to explore is why.
One of the major situations that many women face is being a single mother.  Unplanned pregnancy and divorce can lead to a sudden increase in financial obligation that many women are not prepared to handle.
In almost every case, an additional infant increases the probability of a female-headed family being poor by more than it increases the probability of poverty of a male-headed family, or a married-couple family, with the same number of adults and other dependents.  (Rodgers, 1994)
Many times younger mothers have not completed their high school education, or their college education due to unplanned motherhood.  If they are in a relationship that is not stable, or the father is otherwise not supporting her, it can be incredibly burdensome to raise the child, or children, alone.  It is extremely expensive to pay for day care, and many women can’t afford it.  Many women have to leave their children with friends of family members in order to work.  They are usually only able to find part time work, and therefore earn a low income.  Some file for government public assistance.  Women with higher education tend to be able to afford daycare, and survive with a full time job, but that is in the rare cases that the hardship occurs after some level of financial security has already been achieved.

Another reason why women are earning less money is because “women today earn on average only 74 percent of what men earn,” (Hartmann, 1999).  Some try to claim that the differences in pay for women who are working the same full-time jobs as men have differences in age, qualifications or experience.  This is not always the case.  For example, “In New Hampshire, more than $17,000 in average annual pay differences between full-time male and female lawyers remained unexplained,” (Hartmann, 1999).  The fact still remains, even today, that women are paid less than men for the same work in many cases.  This is discrimination, and it still exists today, much to the disadvantage of career motivated women.

It is highly common that many women choose to work only part-time or to stay at home and raise a family.  The old fashioned ideal still stands as valuable for many women, who don’t mind letting their husbands, or significant others, make all or most of the household income.  The flexibility to do household chores and spend time with their children and other family may be of higher priority to some women than moving up the corporate ladder.  This is becoming less and less the case, as many women are very ambitious about making an impression on the outside world with their expertise and drive to earn top dollar.
The results of these personal preferences, discrimination, and single motherhood effect financial security in the future.  There is not only a gap in the income or working men and women, but also in retired men and women’s earning statistics.  Naturally, earning less leads to lower long-term savings.  “The real incomes of elderly women are substantially below that of elderly men.  Among people aged 65 and over in 1994, median income was $15,250 for men and $8,950 for women,” (Even, 2004).

There are several ways to save for retirement.  Social security is the most almost automatic way to save for some kind of retirement.  This benefit is directly relative to salary and length of employment.  In order to have any income for retirement, a women, or a man, would have to work at least 40 quarters of a year.  If a woman doesn’t work the required number of credits she isn’t entitled to the benefit.  Also, married women may be entitled to spousal benefits, so any credits they earn may limit their benefit due to that privilege.  (Even, 2004)

What Even calls the “weak attachment to the labor market” is responsible for many women’s pension benefits to be lower than men’s.  Many women choose not to contribute any, or do contribute little, to employer provided pension plans and 401k accounts.  This “weak attachment” is actually the changing of jobs, and the tendency of many women to make short term commitments to their companies, due to family needs other changes.  Sometimes it is a personal preference of women not to save for retirement in this way because their income is barely enough to cover living expenses and support a family.  Also, married women are often entitled to their husband’s benefits, so they may not feel the need to worry about long term savings.

All of the statistics here show that women are certainly not earning an equal rate to men.  Of course, this considers the fact that many women are not working, but the fact still stands that women who are employed, part-time or full-time are consistently earning less money.