Businessolver Blog

Women and Financial Wellness: The Hard Facts and How Employers Can Help (Part 2)

Women and Financial Wellness: The Hard Facts and How Employers Can Help (Part 2)
Posted on Monday, March 20, 2023 by Rae Shanahan

While leveling the pay equity field is a good place to start, the barriers women face in the world and workplace are profound. Employers play a big role in empowering women’s financial wellbeing.  

As discussed in part one, women’s financial health is at a five-year low. 

Throughout this series we discovered some eye-opening realities. Namely, while pay equity is a key problem, women face other obstacles to financial wellbeing such as caregiving responsibilities, financial literacy, occupational segregation, debt, cost of goods… and the list goes on.  

More than men, women are feeling the stress of the current economic climate. And for the 52% without emergency savings, financial security is on the line.  

For employers, just being aware of these contributing factors is a step in the right direction. But putting tangible strategies into action that support and empower women’s financial wellbeing is ultimately the goal. 

Workplace flexibility, female- and family-friendly benefits, financial wellness programs and more, are just some of the ways top employers are advancing women’s wellbeing and being paid in kind with loyalty, productivity, innovation, and much more.  

Here Are Six Hard Facts Impacting Women’s Financial Wellness: 

1. Women bear a disproportionate burden of caregiving responsibilities, impacting their employment and long-term earning power.  

For women of all ages, finances often take a back seat to caring for family and dependents, ultimately undermining their employment. According to recent research:  

  • Women are five to eight times more likely than men to have their employment affected by caregiving responsibilities. 
  • Mothers of children under age five have seen post-pandemic employment levels recover more slowly than mothers of school-age children. 
  • These realities especially impact low-income women who experience labor force dropout and early retirement at a rate more than three times that of men. 

Supporting caregivers is good for employers—and the economy. Bringing women back to the workforce, especially in their prime mental and physical years, means bringing more talent to business and technology overall. 

  • Family caregivers, of all ages and genders, dropping out of the workforce represents the largest potential cost to the economy. 
  • The U.S. gross domestic product (GDP) would jump an extra $1.7 trillion by 2030 (5.5% over current projections) if employers and governments put in place more supports for working family caregivers. This boost is equivalent to the economy of New York State.  
  • The GDP could rise to $4.1 trillion (6.6% of the projected entire U.S. economy by 2050). 

2. Women are stressed about their finances.  

Financial stress dominates women’s day-to-day lives, with 43% of women worrying about money at least once a day. No surprise, women out-worry men 55% to 36%, respectively.  

Additionally, research from Prudential found that: 

  • 4 in 10 women (41%) strongly agree that the economic environment has made them more concerned about their financial security compared to 34% of men. 
  • 53% of women say they cannot afford their current lifestyle or are barely getting by—just 40% of men say the same. 
  • 36% of women report experiencing health or mental health issues as a result of financial stress versus 28% of men. 

3. Women save less for a rainy day. 

Data from our 2023 Benefits Insights Report found that: 

  • 43% of women say they’d get soaked when asked if they had a rainy-day fund to cover an unexpected expense vs. 33% of men. 
  • 52% of women would feel panicked about facing a large, unexpected expense vs. 39% of men. 
  • 57% would use cash savings to pay for an unexpected expense vs. 65% of men; and 22% of women say they just don’t know how they’d pay for that unexpected expense vs. 15% of men.  

Likewise, research from Morgan Stanley found that among female employees: 

  • Over 50% of women have less than $1,000 in emergency savings. 
  • Only 32% say they are confident they can retire when they want. 
  • While 40% are comfortable selecting investments that are right for them, female employees are less likely to have a financial advisor and to express comfort with receiving financial advice at work. 

4. Women earn less than men. 

In 2020, women made 83 cents for every dollar earned by men, according to the U.S. Census Bureau. And more recent research shows that progress has plateaued for over two decades: 

  • In 2021, women made about 80 cents for every dollar of male wages—up only 3 cents from 1994 (holy exclamation point). 
  • Women of color are at an even greater disadvantage: Black women were paid 64% and Hispanic women 57% of what white non-Hispanic men were paid in 2020, according to the U.S. Department of Labor. 

5. Women face occupational segregation, contributing to wage gaps.  

It’s little known that occupational segregation, or the clustering of women in just a few occupations, is a key reason for gender wage gaps—and also a big reason for the pandemic’s hit to women’s employment numbers.  

  • Nearly 6 in 10 women were employed in just three sectors (education and health, leisure and hospitality, retail/wholesale trade) before the pandemic, and those industries were the hardest hit by the pandemic. 
  • Women’s employment in these industries remains low, especially in retail where their employment is down 156,400 jobs—even as overall employment in this industry has nearly recovered to pre-pandemic levels from February 2020. 
  • In leisure and hospitality, women’s employment is still down by about 300,000 jobs. 
  • Employment among women without college degrees is 4.4% below pre-pandemic levels (1.6 million fewer of these women were working in January 2023 than in February 2020). 
  • However, employment among women with four-year college degrees was up 2.7 percent over the same period (818,000 jobs). 

6. Women have more college debt and pay more for goods. 

Lower pay contributes to lower lifetime earnings and less overall wealth, but the gender pay gap isn’t the only issue impacting women’s wallets:  

  • Women earn 58% of bachelor’s degrees yet hold 67% of all student loan debt.  
  • They also pay 7% more for their products compared to similar products for men half of the time. This is known as the “gender tariff gap” or “pink tax.”  
  • For example, the U.S. taxes imported clothing for men at an average rate of 11.9%, whereas it taxes imported clothing for women at an average rate of 15.1%.  

While addressing pay equity is a good place for employers to start, women need more holistic help. For instance, of women making more than $250,000 per year, 75% said they do not feel in control of their money. Universally, there is a need for financial wellness education and support regardless of pay bracket. 

As professional women continue to fight for pay equality and leadership roles, employers can help make each dollar go further.