If there is a disparity between men and women when it comes to investing for retirement, one of the reasons could very well be the gender wage gap. A survey 2015 from investment management firm Black Rock, for instance, finds that a mere 53% of women have begun their retirement savings versus 65% of men. And the gender wage gap won’t make things any easier.
Specifically, the wide chasm is such that women make $0.79 for every $1 that men make, and the snail-paced rate at which the gap is closing means that it will take another 44 year — all the way until 2059 — before there is wage parity between the sexes.
Also consider that women who do not negotiate their salaries upon getting job offers stand to lose as much as $750,000 to $2 million over the course of their careers — and money they don’t get is money they can’t invest. One of the reasons for women’s reluctance to negotiate is that when receiving job offers, 51.5% of men and only 12.5% of women ask for more money — even though 51% of women and 47% of men say that talking about wage and salary is a no-no. And when women do request more money, they tend to task for 30% less than men do. Simply put, women are penalized for behavior that men are rewarded for on the salary negotiation front.
Women and men can help their cause in the workplace by negotiating — respectfully and confidently — when the salary question is brought up. So picking up these skills should definitely be high up on their — and particularly women’s — list of priorities.
And don’t think that education necessarily means much in terms of helping women to overcome the gender wage gap. Consider the following:
- Women, one year after college, earn 6.6% less than men
- Female MBA graduates earn $4,600 less than male peers in their first jobs
It’s also interesting to note that 50% of the wage gap is caused by what is termed occupational segregation. In other words, women tend to work in lower-paying jobs typically pursued by women — i.e. nurses, children’s teachers, and secretaries. And men tend to work in higher-paying jobs typically pursued by men — i.e. CEOs, airline pilots, and computer engineers. As it turns out, putting women into into higher-paying occupations would only eliminate 15% of the gender wage gap for all workers and between 30% and 35% for college graduates.
Although the situation is dire, there is light at the end of the tunnel. For instance, government managers are no longer permitted to use a job candidate’s previous salary to determine a new wage. In fact, no employer is legally allowed to use a worker’s previous salary to determine his or her new salary, and companies like Google make job offers based on what a job is worth.