The Purse

Report: the gender pay gap costs US women $1.6 trillion per year. And how do you negotiate more money…? Listen to our podcast with Kathleen Burns Kingsbury

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Report: the gender pay gap costs US women $1.6 trillion per year. And how do you negotiate more money…? Listen to our podcast with Kathleen Burns Kingsbury

Jana Hlistova

Oct 01, 2023

Welcome to our #205 weekly newsletter.

“For women taking control of their financial future”

-Jana Hlistova

From The Purse

In this week’s newsletter, we highlight a report by the National Partnership for Women & Families in the US.

The new data analysis confirms a startling result: the gender pay gap costs women $1.6 trillion per year (US). There are a few reasons for this.

But crucially, women must keep tabs on the going rate for their role and actively seek to increase their income every two years.

Don’t forget to listen to The Purse Podcast interview with Kathleen Burns Kingsbury. We talk about why money is a taboo topic, common money mistakes, how gender norms hold women back and what makes for a financially successful life?

Listen to the interview here.

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And you can review the news in brief so you stay on top of global financial, economic and investing trends.

I hope you enjoy this week’s newsletter.

Until next week,

Jana

Report: the gender pay gap costs US women $1.6 trillion per year. And how do you negotiate more money…?

New data analysis of census bureau data (US) confirms that women earn 78 cents their male peers do.

According to new analysis of census bureau data in the US by the National Partnership for Women & Families, women continue to make just 78 cents their male peers earn.

The pay gap costs women $1.6 trillion every year.

And the data includes all women who worked, whether full- or part-time, as well as those who may have taken time off during the year for illness or to care for a family member.

The wage gap for women overall is $11,450, which is more than one year of childcare (US). And the impact on women of colour is even greater:

Latina women workers are paid 52 cents for every dollar white, non-Hispanic men workers are.
Black women workers are paid 66 cents for every dollar white, non-Hispanic men workers are.
Asian American women workers are paid 89 cents for every dollar white, non-Hispanic men workers are.
Compared to white women workers, who are paid 74 cents for every dollar white, non-Hispanic men workers are.

Key factors behind the gender wage gap

According to Jocelyn Frye, president of the National Partnership for Women and Families, there are three main reasons for the gender wage gap:

Caregiving responsibilities:
- Women on average tend to work fewer hours because they assume many of the caregiving responsibilities in their families.
Occupational segregation:
- Women are concentrated in jobs that pay less and are often shut out from higher-paying jobs through occupational segregation
Workplace discrimination:
- Women continue to face gender bias and discrimination. Based on research, we know that women do ask for more money, but get turned down more often than men.

So what can women do to keep growing their income?

It is so important to keep track of your market value. Speak to recruiters, male and female peers, research salaries on sites including Linkedin and Glassdoor.

And every two years, if you are not getting a raise, seek out a new employer who is likely to offer you a 20-30%+ increase on your existing salary (+ package).

Don’t forget to leverage a new offer with your existing employer if your preference is to stay on. And you have an actual offer to fall back on, should your employer choose not to match your new offer.

In a salary negotiation, it is important to ‘go first’ and set the negotiation at a high level. Your employer is likely to ‘low ball’ and you need to do the reverse; so start as high as you can stomach.

Keep talking to your female and male peers about their salary (and overall package), so you keep tabs on what the going rate is. Make sure you do speak to your male peers, as they are getting paid more.

What next? (Re) Listen here on The Purse Podcast:

Financial news

Market rout continues with S&P 500 plunges 1.5%. Wall Street’s fear gauge — the Cboe Volatility Index or VIX — jumped 12%, reaching the highest since late May.
To put things into perspective: Nasdaq 100 now down ~9% from high, largely in the ‘zone’ of recent NDX drawdown episodes over the last 1 year. (HT GS).
European stock markets hit six-month low. The Stoxx 600 index, which tracks companies across continental Europe and the UK, has fallen by almost 0.5% this morning to 444.7 points, the lowest since the end of March.
Stress in the financial system is rising: The value of global bonds dropped another $428bn this week as the interest rate world keeps repricing for a higher for longer. In past quarter, bonds lost ~$1.8tn in value and everyone is puzzling over who has the losses on their books.
Fed more hawkish than anticipated: Holds benchmark rate in 5.25-5.5% target range. 12 Officials see one more hike this year, 7 see on hold. Fed ‘23 median rate forecast stays at 5.6%; ‘24 rises to 5.1%.
The Great Reset on Wall Street builds as stock traders sober up: financial conditions become the tightest this year. ‘Higher for longer’ most dangerous words for markets. Equal weight S&P 500 flat for the year.
Bill Ackman says Treasury yields are going higher in a hurry, and that investors should shun US govt debt. His short bet on 30y Treasury bonds paying off in dramatic fashion over the past few weeks.
The world may not be prepared for a worst-case scenario of Fed rates hitting 7%, JPMorgan CEO Jamie Dimon said. Difference between 5% and 7% more painful than 3% to 5% was.
UK 5-year mortgage rate drops below 6%, first time since July. UK mortgage rates have dropped again, data provider Moneyfacts reports, with the five-year fixed mortgage below 6% for the first time since July.
Childcare costs ‘soaring by £600-plus a month’ as firms insist on return to office. Survey finds parents under pressure, as second study finds some are leaving workforce because of costs