2023-03-16
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The Pink Tax and the Gender Gap: How They Work Together to Hurt Your Wallet

'How the pink tax hurts your wallet' text
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Women and men buy a lot of similar products: soap, shampoo, razors, and of course, clothes. Most of these items have distinct men’s and women’s varieties, often with different colors or fragrances.

But even when they’re practically identical, the women’s version often costs more – despite women earning less money on average.  

Here’s how the “pink tax” and gender pay gap work against women.

What is the “pink tax”?

The “pink tax” isn’t actually a tax – it’s the discriminatory practice of charging women more than men for similar products. The term “pink tax” comes from the tendency to make women’s products/packaging pink.

Historically, the pink tax shows up in all kinds of products and industries, with women often paying more for:

- Cars

- Haircuts 

- Clothing

- Health and hygiene products (particularly razors)

- Clothing

- And even children’s toys

In fact, before the 2010 Affordable Care Act prohibited the practice, women paid higher health insurance premiums. (Especially to cover maternity care – because apparently men apparently come from..Mars?)

Another version of the pink tax is the tax that women pay on necessary items without a male equivalent. The issue stands out because many states eliminate taxes on essential items like prescription or over-the-counter medicine. But 22 U.S. states tax charge regular sales tax on pads and tampons by classifying them as non-essential items or “luxury goods.” (Because menstruation is so luxurious, right?)  

What’s behind the pink tax?

In some cases, marketers argue that women’s products and services cost more and should sell for more. (A common example is that women’s haircuts may require more time and labor than men’s cuts.) But when you dive into the numbers, they become harder to justify.

The most comprehensive price comparison studies are a bit dated, but widely talked about. A Senate report suggested that several factors contribute to the pink tax, including:

- Tariffs – women’s clothing imports are taxed 3-4% higher than men’s (confirmed by the Progressive Policy Institute in 2022)

- Product differentiation – differentiating products by gender (such as with pink dyes) increases the cost of production

- Price discrimination – when women are willing to pay more, sellers charge more for female-gendered products

- Price fixing – in some markets, large companies prevent competitors from introducing cheaper products

Efforts to lobby against a pink tax also point to a report from the New York City Department of Consumer Affairs. In “From Cradle to Cane: The Cost of Being a Female Consumer,” the authors claimed that even when gendered products contain different materials or are marketed differently, rising costs don’t match the increase in prices.

Additionally, many women’s products list “premium” ingredients on the label to make them appear higher-end – thereby “justifying” higher costs.

The pink tax and your wallet

The NYC report concluded that while some pink taxes might be legitimate, they’re often unfair and “mostly unavoidable.” Ultimately, women don’t control what goes into their products – they have to pick from what’s on the shelf.

Overall, the authors found that women could expect to spend more about 42% of the time for products with similar branding, ingredients, and marketing. Women pay:

- 7% more than men across the board

- 13% more for personal care products

- 7% more for accessories

- 8% more for adult clothing

- 12% more for canes

- And up to 90% more for dry cleaning

The pink tax gets an update

When inflation ramped up recently, the pink tax kicked into high gear. (At least, as far as personal hygiene products are concerned.) A 2022 study found that women pay around 12.7% more for “substantially similar” personal care products than men, including:

- 25% more for razor cartridges

- 12.6% more for deodorant

- 9.7% more for shaving cream

- 9% more for razors

- 5% more for hair care

- 4% more for body wash

- 1% more for lotion

And those differences add up. A 2020 report out of California found that the average woman spends up to $2,400 more than men every year for the same products. Over a lifetime, that adds up to nearly $190,000 in “pink tax” charges.

How the gender gap drags down women’s incomes

While the pink tax hits women’s purses, they’re also being shortchanged from another direction – specifically, their own paychecks.

Data from the BLS and Pew Research Center shows that for every $1 men earn, women earn just 82 cents. That’s practically unchanged from 20 years ago when women earned 80 cents compared to $1 for men.

And this difference only widens as women age. Generally, women under 34 earn 90-92 cents per man’s dollar. But as women reach their early 40s, the gap widens to 84 cents.

The reasons for the gender pay gap are complex – and often rooted in discriminatory practices.

Racial differences are striking. As of 2021, Black women earn just 63 cents for every dollar white men earn. Hispanic women earn even less: just 58 cents per dollar earned by men.

Being a mom often makes the issue worse, as women with children are less likely to work full-time than women without children. On the other side, fathers are more likely to work – and work more hours – than men without children. This “fatherhood wage premium” remains a primary contributing factor to the gender wage gap.

Motherhood aside, the wage gap affects women from the time they enter the workforce to the time they leave. And it doesn’t stop there: women who earn less, save less – and receive smaller Social Security checks in retirement.

The pink tax and gender gap: earning less while paying more

The numbers are clear: women have a financial disadvantage just because of different anatomy.

While women bring home roughly 80% of a comparable man’s paycheck in their lifetimes, they also pay more for comparable products. (And in some cases – looking at you, tampons and makeup – buying products that men never have to worry about.)

Over time, this reality shapes women’s economic status their entire lives. And since women are expected to live 5-6 years more than men, they’re paid less and charged more for longer.

If you’re struggling financially, you’re not alone

It’s easy to see how the pink tax and gender wage gap make women’s financial woes worse. Women of color and single mothers are often hardest-hit – not only do they earn a lower wage than their male counterparts, but they pay more for similar expenses.

If you’re struggling as a single mother – pink tax or not – the following resources can help:

·      Singlemothersgrants.org is a directory that points single mothers to grants for housing, utilities, childcare, educational expenses, and more.

·      Freefinancialhelp.net has a list of resources to help single mothers pay rent, access affordable childcare, and get free school supplies and Christmas gifts.

·      Singlemotherguide.com has a list of (largely public) resources to guide single mothers to rental, medical, and childcare assistance.



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