How to Support Gender Equality in Finance
Ideally, everyone would be able to participate in financial life without barriers or disadvantages. Economic opportunities would be plentiful for all, regardless of gender or any other aspects of a person's identity.
However, that perfect world is still far off, and gender equality in finance hasn't been realized yet. Significant gaps still exist between men and women when it comes to earnings and wealth. Fortunately, there are also practical steps people can take to move the economy toward greater fairness.
Understanding financial inequality
When you look at the numbers, it's clear that financial resources aren't distributed evenly by gender.
US Census data shows that for every $1 a man earns, a woman typically earns about $0.82. That can add up to a significant amount over a woman's career and lifetime. It's estimated that the gender pay gap results in the average woman and her family missing out on $700,000 to $2,000,000 during her life when you consider wages, Social Security and other retirement income.
The gender pay gap has improved over the years, but progress is slow. Unless the pace picks up, the US won't achieve equal pay until 2059.
There's a gender gap in wealth, too. Research from the Federal Reserve Bank of St. Louis found that when comparing women and men who have never been married, women have only $0.34 for every $1 of men's wealth. The wage disparity (PDF) is especially pronounced for Black and Hispanic women.
Starting a business is often a good way to grow one's wealth and get ahead financially. But for women entrepreneurs, securing funding for a startup can be a challenge. Crunchbase reports that in 2020, only 2.3% of venture capital went to businesses founded by women without a male co-founder.
Promoting gender equality in finance
By voicing your opinion and voting with your wallet, you can help make the economy more equitable. Here are some practical steps you can take in your own day-to-day life and financial choices.
- Talk to your friends and family. Start a conversation about how the economic experience has changed for women over the last several decades and how some disadvantages remain. Let people know why gender equality matters to you.
- Support equal pay at work. Some companies have initiatives to publish salary ranges for male and female employees and analyze company-wide pay gaps. If your employer is working on this, you can show your support. If your employer isn't reporting on its gender pay gap yet, you could suggest the idea.
- Shop at women-owned businesses. Use business directories like Women Owned to find companies created and led by women. You can support these businesses by buying products from them and recommending them to others.
- Donate to an organization that helps women entrepreneurs. National nonprofits such as the Association of Women's Business Centers, Women's Global Empowerment Fund and Women's Venture Fund provide women with resources and mentorship to start or grow a business. But there are many state and local organizations who also support women entrepreneurs, some of which might be in your area. If you'd like to get more involved, you could hold a fundraiser or volunteer your time.
- Invest in companies with good track records on gender. Look for gender-focused exchange-traded funds, or ETFs, that hold stock in companies with women leaders or with strong records on equal pay and gender equity.
- Back shareholder resolutions on gender equity. If you own any stocks, watch for shareholder resolutions calling for the companies you've invested in to disclose gender pay gaps and institute equitable policies. Then, send in a proxy ballot voting in favor of those resolutions. Your vote sends a message that you care about equity.
Given how complex our financial systems are and how much work remains to be done, it's unlikely that a single action will close the gender gap in finance. But if many people take small steps toward the goal of providing equal opportunities for all, that combined effort can make a big difference. Supporting financial access for women and women-led businesses will lead to more wealth and financial security for women and their families.
A few financial insights for your life
This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.