Women have more opportunities today than ever before. Mothers are on the rise as primary breadwinners, and women are beating out men in college enrollment and degree attainment, according to the Pew Research Center.
Yet women still earn less than men (recent data shows that women earn 83% of what men do). Earning less now could have serious implications for your future. According to the National Institute on Retirement Security, women are 80 percent more likely than men to live in poverty during retirement.
The gender pay gap is alive and well, but maybe not for the reasons you think. Rather than outright sexism, societal norms and expectations may be influencing women’s choices in a way that lowers their lifetime earnings and retirement savings.
Photo Courtesy of PEOPLE Magazine
Why do women make less than men?
One of the biggest reasons women earn less could be the jobs they choose — and what they’re willing to ask for.
Women are less likely than men to pursue careers that offer a high earning potential, and they make up the majority of nearly all the least lucrative college majors.
As a woman, you may still be considered a primary caregiver in our society. Even in households where both partners have similarly demanding jobs, women are more likely to do the lion’s share of housework and child care.
For many women, that extra responsibility could lead them to opt for a career seen as “less intense” so they can still fulfill their roles at home. In some cases, women take breaks from their careers altogether in the name of staying home with children for a few years. Both of these things could contribute to lower wages overall.
Another possible reason for the gender wage gap? A reluctance to ask for more money. In 2016, an Earnest survey found that 26 percent of women aged 18 to 24 attempted to negotiate their salaries, as opposed to 42 percent of men in the same age group.
Photo Courtesy of the Huffington Post
Failing to negotiate your earnings can have big implications for your future, especially early on in your career. Once your base salary is set, your future raises and promotions will be based on that number. If you start with lower earnings, you could see smaller pay bumps later on, possibly leading to hundreds of thousands of dollars left on the table due to missed earnings.
How earning less impacts your retirement
The less you make, the less you can save for retirement — and that’s where things get really sticky.
Consider a matching 401(k) contribution from your employer. If you make $40,000 a year and have a 100 percent contribution match for up to five percent of your salary, you’re socking away $4,000 a year if you take full advantage ($2,000 from you and $2,000 from your employer).
But what if you were making $50,000 a year? With your employer’s match, you’re putting away $5,000 a year for retirement.
That extra $1,000 in savings may not sound like much, but it adds up with the power of interest. Over the course of 20 years, you would save up an extra $20,000. If you earn 8% interest on that money, it will grow to $50,000 during that time — more than doubling your money.
Don’t forget the impact of taking a break from your career. That’s money you aren’t earning and savings you aren’t putting aside for the future. You can’t replace the time money spends in the market. The longer your money is in the market, earning interest, the more you have in the long run.
What to do right now to fix your financial future
You don’t have to be part of these statistics; you can make moves right now to fix your financial future and build a comfortable nest egg.
1. Review your pay
Use a website such as PayScale or Glassdoor to get an idea of what others in your career are making. You can compare your pay to people with similar experience and education. If you’re underpaid, ask for a raise. The more you make, the more you can set aside for your future.
2. Start a business
If you don’t earn as much as you’d like to at work, consider finding a second income stream. Consult. Freelance. Drive for Lyft. Find ways to earn a little extra money on the side, then put that into your retirement account and watch it grow.
3. Start investing in your retirement today
Regardless of how much you make, now is the time to start investing for retirement. The longer you have to save, the more time your money has to grow.
If your job offers a retirement plan, get signed up. Try to contribute as much as possible to get the biggest maximum match. If your work doesn’t offer a retirement plan, you can still open an IRA and start investing for the future.
It may make sense to start with a robo-advisor such as Betterment or FutureAdvisor. These types of companies usually balance your accounts automatically, investing in a mix of assets based on your age, risk tolerance, and estimated year of retirement. Robo-advisors are low-cost options that often don’t require an account minimum — making them perfect for beginners.
4. Consider a spousal IRA
If you’ve chosen to take time out of your career to care for your family, you can still prioritize your retirement. It’s possible to make a contribution to a spousal IRA, even if you don’t have an income.
A spousal IRA is in your name only, but both you and your partner can contribute to it. It’s a way to ensure that you build your own retirement, even if you decide to stay home for a few years. Better yet, depending on your circumstances, the contributions may be tax-deductible. It’s true: Women are still at a disadvantage when it comes to long-term finances. But it doesn’t have to be that way for you. Start planning now, and you can retire comfortably later.
Women of the Middle East have made significant strides in the past decade in a number of sectors, but huge gaps remain within the labor market, especially in leadership roles.
A huge number of institutions have researched and quantified trends of and obstacles to the full utilization of females in the marketplace. Gabriela Ramos, is the Chief-of-Staff to The Organization for Economic Co-operation and Development (OECD), an alliance of thirty-six governments seeking to improve economic growth and world trade. The OECD reports that increasing participation in the women's labor force could easily result in a $12 trillion jump in the global GDP by the year 2025.
To realize the possibilities, attention needs to be directed toward the most significantly underutilized resource: the women of MENA—the Middle East and North African countries. Educating the men of MENA on the importance of women working and holding leadership roles will improve the economies of those nations and lead to both national and global rewards, such as dissolving cultural stereotypes.
The OECD reports that increasing participation in the women's labor force could easily result in a $12 trillion jump in the global GDP by the year 2025.
In order to put this issue in perspective, the MENA region has the second highest unemployment rate in the world. According to the World Bank, more women than men go to universities, but for many in this region the journey ends with a degree. After graduating, women tend to stay at home due to social and cultural pressures. In 2017, the OECD estimated that unemployment among women is costing some $575 billion annually.
Forbes and Arabian Business have each published lists of the 100 most powerful Arab businesswomen, yet most female entrepreneurs in the Middle East run family businesses. When it comes to managerial positions, the MENA region ranks last with only 13 percent women among the total number of CEOs according to the Swiss-based International Labor Organization (ILO.org publication "Women Business Management – Gaining Momentum in the Middle East and Africa.")
The lopsided tendency that keeps women in family business—remaining tethered to the home even if they are prepared and capable of moving "into the world"—is noted in a report prepared by OECD. The survey provides factual support for the intuitive concern of cultural and political imbalance impeding the progression of women into the workplace who are otherwise fully capable. The nations of Algeria, Tunisia, Morocco, Libya, Jordan and Egypt all prohibit gender discrimination and legislate equal pay for men and women, but the progressive-sounding checklist of their rights fails to impact on "hiring, wages or women's labor force participation." In fact, the report continues, "Women in the six countries receive inferior wages for equal work… and in the private sector women rarely hold management positions or sit on the boards of companies."
This is more than a feminist mantra; MENA's males must learn that they, too, will benefit from accelerating the entry of women into the workforce on all levels. Some projections of value lost because women are unable to work; or conversely the amount of potential revenue are significant.
Elissa Freiha, founder of Womena, the leading empowerment platform in the Middle East, emphasizes the financial benefit of having women in high positions when communicating with men's groups. From a business perspective it has been proven through the market Index provider MSCI.com that companies with more women on their boards deliver 36% better equity than those lacking board diversity.
She challenges companies with the knowledge that, "From a business level, you can have a potential of 63% by incorporating the female perspective on the executive team and the boards of companies."
Freiha agrees that educating MENA's men will turn the tide. "It is difficult to argue culturally that a woman can disconnect herself from the household and community." Her own father, a United Arab Emirates native of Lebanese descent, preferred she get a job in the government, but after one month she quit and went on to create Womena. The fact that this win-lose situation was supported by an open-minded father, further propelled Freiha to start her own business.
"From a business level, you can have a potential of 63% by incorporating the female perspective on the executive team and the boards of companies." - Elissa Frei
While not all men share the open-mindedness of Freiha's dad, a striking number of MENA's women have convincingly demonstrated that the talent pool is skilled, capable and all-around impressive. One such woman is the prominent Sheikha Lubna bint Khalid bin Sultan Al-Qasimi, who is currently serving as a cabinet minister in the United Arab Emirates and previously headed a successful IT strategy company.
Al-Qasimi exemplifies the potential for MENA women in leadership, but how can one example become a cultural norm? Marcello Bonatto, who runs Re: Coded, a program that teaches young people in Turkey, Iraq and Yemen to become technology leaders, believes that multigenerational education is the key. He believes in the importance of educating the parent along with their offspring, "particularly when it comes to women." Bonatto notes the number of conflict-affected youth who have succeeded through his program—a boot camp training in technology.
The United Nations Women alongside Promundo—a Brazil-based NGO that promotes gender-equality and non-violence—sponsored a study titled, "International Men and Gender Equality Survey of the Middle East and North Africa in 2017."
This study surveyed ten thousand men and women between the ages of 18 and 59 across both rural and urban areas in Egypt, Lebanon, Morocco and the Palestinian Authority. It reports that, "Men expected to control their wives' personal freedoms from what they wear to when the couple has sex." Additionally, a mere one-tenth to one-third of men reported having recently carried out a more conventionally "female task" in their home.
Although the MENA region is steeped in historical tribal culture, the current conflict of gender roles is at a crucial turning point. Masculine power structures still play a huge role in these countries, and despite this obstacle, women are on the rise. But without the support of their nations' men this will continue to be an uphill battle. And if change won't come from the culture, maybe it can come from money. By educating MENA's men about these issues, the estimated $27 trillion that women could bring to their economies might not be a dream. Women have been empowering themselves for years, but it's time for MENA's men to empower its women.