Women and Wealth in the United States
HBO recently released a film called “Confirmation” which told the story of Anita Hill and the Clarence Thomas Supreme Court confirmation hearings. The event sparked a national debate on women’s rights and sexual harassment, with 1992 becoming known as “Year of The Woman.”
Unfortunately, “Year of The Woman Who Has Equal Wealth” is yet to become a reality.
Income has generally been used as the primary yardstick of people’s economic status. But wealth (or net worth) is a much more comprehensive measure of one’s financial situation.
A study by Sociologists for Women in Society shows that the gender wealth ratio reveals economic inequalities that are masked by gender income ratios.
In the United States, a substantial wealth gap exists between single women and single men. Couple households (married and co-habitating) have the highest median wealth, and single women have the lowest. The median wealth for single women between the ages of 18 and 64 is only 49% of the median wealth of their single male counterparts.
Wealth inequality is not only more extreme than income inequality, but reveals disparities that are hidden when income is the indicator of economic status. For instance, never-married women, working full-time, closed the income gap in 2007, however, they owned only 8% of the wealth of never-married men.
Married women have the largest income gap, but if one assumes married couples have equal ownership of marital assets, then they experience no wealth gap. It seems that at every income level, men have more wealth than women. And single women of color and women with children are more likely to have little or no wealth. Women of color face the compounding negative wealth effects of being both a woman and a person of color.
Why Do Women Have Less Wealth than Men?
The gender income gap no doubt contributes to the wealth gap, but even if women and men had the same incomes, women would have less wealth. Single women are more likely than single men to have the financial burden of custodial parenthood. Women lack wealth-building fringe benefits (such as employer-sponsored retirement plans) because women are more likely to work part-time and such benefits are often denied to part-time workers.
Even with similar credit profiles, women are 32% more likely to receive subprime mortgages than men, typically adding $85,000 to $186,000 more in interest over the life of the loan.
Women have less wealth to support themselves in retirement and to help them weather economic, familial, and medical crises. In addition, children of single mothers with assets have higher educational achievement, even when controlling for other important factors that predict children’s educational attainment.
Women’s financial dependency makes it more difficult for them to leave abusive relationships. And because women of color are less likely to marry and more likely to be single parents than white women, the racial wealth gap cannot close unless the gender wealth gap closes.
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