Despite advancements in gender parity, corporate America still has plenty of work to do. Women are paid 82 cents for every dollar a man earns, putting them at a disadvantage in terms of savings and retirement preparedness. While closing the gender wage gap is important, how much women are paid is only part of the overall issue.
From the beginning of their careers, women face greater challenges to career advancement and wealth accumulation than men. They’re more likely to be underestimated and have their work undervalued – as evidenced by the pay gap – leading them to be denied promotions and raises more often than men. And when women do try to speak up in their own defense, they’re often labeled as “bossy” or “too aggressive.”
“It can be harder to find advocates,” said Ruzwana Bashir, CEO and founder of Peek.com and one of Personal Capital’s Financial Heroes. “We see systemic situations and societal issues that we are trying to combat now. As times goes on, we will change expectations and ensure women break through glass ceilings in every industry.”
To explore the challenges women face in their careers and how they work to achieve their goals, we surveyed nearly 900 employed Americans, both men and women, and over 100 female entrepreneurs on their experiences in the workforce. We learned a lot about just how much work we have left to do in funding female careers and entrepreneurs, and how each woman can start to take charge of her financial future despite having higher hurdles to overcome. Here’s what we discovered.
More than Half of Women Feel They are Disadvantaged in Their Careers Compared to Men
The biggest obstacle to career advancement women face isn’t in reaching the top rung of the ladder; it’s in making it up that first step to manager. Women account for nearly half of the entry-level workforce but rapidly dwindle to barely one-fifth of the C-suite.
When asked how hopeful they are in their career advancement opportunities, over 50% of women said they were only somewhat, slightly, or not at all hopeful. Only 18% said they were extremely hopeful about their future career advancement opportunities. It’s not for lack of ambition: The majority of women would tell you they are very ambitious at work.
The crux of the issue is that women often face disadvantages in the workforce. A full 70% agreed that women are disadvantaged in their careers compared to men. From trying to find employment to career advancement, women must scale larger roadblocks than men. Women have a harder time finding employment and often end up in more vulnerable jobs with shorter hours and fewer benefits. Around 14% of women also reported not being paid what they are worth.
This results in some startling differences between women’s retirement preparedness relative to men’s. Women are less likely than men to contribute to their 401(k) plan or believe they will ever earn enough to make the maximum contribution. Fewer women are at least somewhat confident they can save enough for retirement – a scary prospect given 55% of women expect to retire before they reach the Social Security retirement age. All of this points to the fact that women are more likely to need to take bigger withdrawals from their smaller savings earlier in their retirement years, which can greatly handicap their savings’ future growth potential.
Women Are Less Likely Than Men to Get Promotions and Raises
Access to promotions and raises is a key component of income growth throughout your career, but women continue to fall behind men in career advancement – and it’s not because women aren’t asking for opportunities and raises. Women ask for raises as often as men, they’re just less likely to receive them.
Roughly two-thirds of women reported asking for, and being denied, a raise or promotion at some point in their careers. Some research points to the fact that women tend to be harder on themselves during evaluation time, referred to as the “gender gap in self-promotion.” Women are less inclined to toot their own horn, so to speak, during annual reviews, which can make them seem like less suitable candidates than their male counterparts.
This stagnation results in women having their salaries peak over a decade earlier and over $34,000 lower than men, on average. This wealth gap is only exacerbated by the fact that women are also investing less than men, which prevents their savings from growing as much as they otherwise could.
Women Face Microaggressions at Work
Unequal opportunities and pay are only one side of the career battle women face. Within the workforce, women are confronted with numerous microaggressions. From being told to smile more or appear more pleasant – the most common microaggression experienced by women at work – to feeling pressure to distance themselves from their gender, women are often stigmatized at work.
Almost 40% of women reported being underestimated, such as having a female doctor mistaken for a nurse. Almost two-thirds of women say they’ve been assigned an administrative or clerical task outside of their job description. Over 1 in 5 women have had a male colleague take credit for their work.
When women try to stand up for themselves, they are more likely than men to be labeled as bossy. But when they don’t speak up, they can be told they should be more aggressive. In fact, more women reported being told to be more aggressive than being called bossy or aggressive at work.
These microaggressions aren’t only coming from men. While almost all women said they feel supported by their female co-workers, two-thirds also reported being bullied by a female boss. Theories behind the behavior of women not supporting other women include findings that suggest women in higher leadership roles tend to display more male-specific emotional IQ traits, leading them to value relationships less and have lower empathy.
It’s also theorized that since women are promoted less, there’s a sense that there are fewer spots available higher up the ladder. This prompts female leaders to feel less inclined to help other women rise in the ranks.
Over 9 out of 10 Women Experienced Retaliation for Bringing Up the Gender Pay Gap at Work
Women are increasingly speaking out about the inequalities they experience at work. Almost half of the women we surveyed said they’ve addressed the gender pay gap at work – but over 9 in 10 of these women said they experienced some form of retaliation as a result of it.
The fear of retaliation is one primary reason women don’t speak up about the gender wage gap. Over half of women who haven’t addressed the issue at work said they stayed silent because they were afraid speaking up would jeopardize future advancement opportunities. Around 40% of women said they didn’t have enough concrete information.
Governments and experts are increasingly encouraging companies to disclose their wage data. Research by Cornell University found that simple disclosure can shrink the gender pay gap by 7%. Unfortunately, this gap shrank because the companies tended to slow men’s wage gap growth, not because they increased women’s wages. But the fact remains that if people don’t speak up about the wage gap, change cannot be made.
Speaking up needn’t be a negative experience – in fact the majority of women who spoke up about the gender pay gap told us it was an overall positive experience. Only 16% said their experience was negative or extremely negative, and one-quarter of women felt neutral about the experience. So don’t listen to the friends and colleagues who warn you against saying anything (13% of women cited this as the reason they hadn’t spoken up).
Women Are Less Likely to Be Saving for Retirement
Career development and growth doesn’t just impact the here and now. How people fare in their careers often determines what kind of retirement they can expect. In an Empower Retirement survey of more than 2,000 Americans, 83% of men reported that they’re currently saving for retirement, compared to just 74% of women.
When assessing barriers to bolstering retirement savings, both men and women most commonly cited the need to make ends meet. However, there was a 10-percentage-point difference between the number of men and the number of women saying they had to forgo retirement savings to pay the bills (28% compared to 38%). Even before the onset of the COVID-19 pandemic, wage growth lagged behind expectations, decreasing Americans’ purchasing power. People’s salaries were increasing, but not enough to keep pace with cost-of-living increases and inflation.
For women, the second most common impediment to saving for retirement was paying off debt other than student loans (though women also were more likely than men to cite student loan debt as a reason for putting off retirement saving). There could be a number of reasons why women were more likely to cite debt obligations than men. For one, the pay gap means women are typically making less than men in similar positions, potentially making any debt harder to pay off in the long run.
Women Have Less Access to Workplace Benefits Than Men, on Average
How much you are paid is only one contributing element to your overall wealth. Workplace benefits can also have a major impact on your wealth. Over two-thirds of all personal bankruptcies are tied to medical issues. If the recent pandemic has taught us anything, it is the potentially bankrupting cost of medical bills. Uninsured Americans hospitalized for COVID-19 could face medical bills of up to $75,000. And health insurance is only one of the many workplace benefits that can impact an individual’s overall income.
While both men and women tended to participate in workplace benefits programs equally, when available, men were more likely to have access to such programs. Around 85% of men said they had workplace perks programs, compared to 75% of women.
The biggest divide was in the availability of company-sponsored child care. Only 19% of men said they didn’t have access to this perk, while one-third of women were not given it. This can leave women in a tight spot: Either they pay for child care out of pocket, something which can cost more than in-state college tuition, or they may have to reduce their hours or leave the workforce all together to care for their children themselves. Both of these options can leave women disadvantaged in terms of career and income.
Many women who leave the workforce to raise children lose the income and retirement savings opportunities they would have had if they’d stayed. And upon returning, they face even more obstacles to career advancement.
Women Are Increasingly Choosing to Become Entrepreneurs
One way to step away from workplace biases and microaggressions is to be your own boss, though women still face many challenges as entrepreneurs. Funding for female founders, for instance, has historically raised just 2.2 percent of all venture capital dollars.
“There are definitely issues with access to capital and in boardrooms,” Bashir said. “They think that we have different expectations than men, and that really compounds in making it harder for women entrepreneurs and CEOs to raise capital.” Bashir recalls one meeting when she was recommended to not wear a dress, as it wouldn’t align with investors’ vision of an entrepreneur.
The tides are changing, however. Over the past two decades, the number of women-owned businesses has grown at a rate of around 849 new women-owned businesses every day. Our data suggests this trend is not slowing down.
Over one-quarter of the female entrepreneurs surveyed for this report said they started their business less than one year ago. For over 1 in 5, their business is less than six months old. Among these new entrepreneurs, around half of the women said they started their own business because of COVID-19.
Nearly 75% of female entrepreneurs said they are satisfied with their career, even though the majority noted earning $35,000 or less per year. The vast majority of female entrepreneurs didn’t start their business because they needed to; their career choice was one of desire.
While women are by and large reporting career satisfaction as entrepreneurs, less than half had any mentorship to help them get there. Among those who were mentored, over three-quarters of them had a female mentor, proving some women are supporting other women in business.
Bashir has found great value in peer mentorship, whether discussing the challenges of competing with larger enterprises or dealing with the ramifications of COVID-19.
“Peer mentorship with other people who are in a similar position allows you to be vulnerable and honest,” she said. “You are not having to worry that that person is potentially someone you are going to heavily rely on in your career. For me, it has been a huge way for me to learn.”
Funding Your Own Future
It can feel like the deck is stacked against women in corporate America. From a pay gap that leaves women earning 82 cents for every dollar a man earns to microaggressions and discrimination in the workplace, women have a lot to overcome. This doesn’t mean all is lost, however. While how much you are paid may be largely out of your hands, what you do with the money you earn is entirely in your control.
“Financial empowerment is having a trajectory, a plan that will get you where you want to be in the future,” Bashir told us. “As opposed to something that you feel you can’t control or that’s overwhelming, it becomes one of your goals that you work toward.”
A great way to take control over your money is to know where you stand. How much do you spend every month? What does your cash flow look like? How are your investments performing? Are you paying too much in fees? How prepared are you for retirement? At Personal Capital, we’re here to help you answer these questions so you can feel more confident about your money. Our expert financial advisers and free online tools are here to help you navigate any career challenges so they don’t get between you and your financial goals.
Fair Use Statement
We hope that you’ve found this content insightful and would welcome your help in spreading the word about the experiences of women in the workforce. We only ask if you do share, you do so strictly for noncommercial use and include a link back to this page so that readers can read our findings in their entirety. This also helps our creators get the recognition they’re due for their hard work in putting it together. Thank you!
Methodology and Limitations: We surveyed 800 currently employed women and 200 currently employed men, as well as 111 female entrepreneurs. The average age of the employed women we surveyed was 37 with a standard deviation of 10.9. The average age of the employed men surveyed was 33.5 with a standard deviation of 9. The average age of the female entrepreneurs we surveyed was 38.3 with a standard deviation of 10.6. When asked about microaggressions in the workplace, women were instructed to select all options that applied to them. Therefore, percentages will not add to 100. They were instructed to do the same when reporting reasons for not addressing a suspected pay gap at work. Those percentages will also not add to 100. The data we are presenting rely on self-report. There are many issues with self-reported data. These issues include, but are not limited to, the following: selective memory, telescoping, attribution, and exaggeration.
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