Financial Empowerment
Generations of women were denied control over their financial life, and it wasn’t until 1974 that women were allowed to have credit cards in their own name. Today, more women are taking control of their finances and making important decisions about budgeting, saving, and investing. Despite all this progress, inequities persist, and the racial, gender, and motherhood pay gaps continue to hold women back from reaching their full economic potential. Women are also still expected to do a significant amount of unpaid labor such as childcare, caring for older relatives, and maintaining the home. The gender pay gap can mean $400,000 or more in lost wages over a woman’s lifetime, a loss of financial power that has huge implications for women’s long-term quality of life.
Pay Gap and Unpaid Labor
Too often, women’s labor is undervalued both in the workplace and at home. The gender pay gap has stayed largely unchanged since the early 2000s and remains larger for women of color and mothers. Unequal distribution of caregiving responsibilities for children and older relatives is one of the reasons the pay gap has persisted. Because of the caregiving gap, women are more likely to leave the workforce for significant periods of time, which has a long-term impact on their earning potential.
Women overall earn only 78% of what white men earn, and the pay gap is much greater for women of color. Latinas earn only 52%, American Indian/Alaska Native women 55%, and Black women only 69% of what white men earn.
Today’s gender wage gap means that full-time, year-round workers lose nearly $400,000 over the course of a 40-year career. For Black women, these losses amount to nearly $900,000, for Native Hawaiian/Pacific Islander women nearly $1 million, and for Latinas and American Indian/Alaska Native women, more than $1 million.
The motherhood penalty means that mothers with children under 18 years make only 61.7 cents compared to working fathers, regardless of whether they worked full-time, part-time, year-found, or part-year. Conversely, fathers often experience an increase in pay, known as the fatherhood wage premium, which tends to widen the gender pay gap. Women of color face an even wider pay gap: Native mothers (37.1 cents), Latina mothers (40 cents), and Black mothers (45.7 cents) all earn far less than white fathers.
Around the world, individuals dedicate 16 billion hours daily to unpaid domestic and care work —including responsibilities such as cooking, child care, and household chores — with a disproportionate impact on women and girls, who perform 76% of all care work. This work is also often performed alongside other employment.
Latino/Latina and Black caregivers face higher financial strain, overall, when compared to white caregivers. Latino/Latina caregivers spend, on average, 47% of their family income on caregiving while Black caregivers spend 33%, compared to 18.5% for white caregivers. Latina caregivers faced even higher financial strain, spending 56% of household income caring for an adult family member or friend.
Entrepreneurship
Entrepreneurship comes with many benefits, including greater control of your schedule, opportunity for career advancement, and the ability to charge what you are worth. All of these factors have encouraged women to start their own businesses. However, women-owned businesses still face significant barriers to success, particularly accessing the critical funds needed to scale up.
Women now own 42% of all non-employer firms, and nearly a quarter of employer firms.
Much of the recent growth in women-owned businesses is due to entrepreneurial efforts by women of color, specifically Black women and Latinas; between 2019 and 2023, Black woman-owned businesses saw their average revenues increase by 32.7%, while Latina-owned businesses saw a revenue increase of 17.1%, compared to a 12.1% increase in revenue for all women-owned businesses.
Though Black women-owned businesses are experiencing rapid growth, their revenue remains comparatively low, which is partly due to lack of access to capital; Black women receive less than .35% of all venture capital funding. And while Black women have lower household incomes than their white counterparts, approximately 60% of Black women self-fund their start-ups.
Financial Abuse
Financial/economic abuse impacts millions of Americans every year and involves restricting access to resources, controlling finances, and exploiting economic dependence so that one partner can maintain power and control over another. Financial abuse disproportionately impacts women, people of color, LGBTQ+ people, people with disabilities, and Indigenous people. Without access to funds, survivors are often left with no choice but to stay with their abuser.
94-99% of domestic violence survivors have experienced economic abuse.
Women of color experience more financial strain from financial abuse compared to their white counterparts, and are disproportionately impacted by economic abuse based on a variety of socio-economic injustice factors, including the racial pay gap, stigma, lack of information, and non-intersectional services.
Financial Literacy
For generations, women have been taught and pressured to leave large monetary decisions to the men in their lives. This has led to a financial literacy gender gap that leaves women unprepared to care for their own financial health, particularly in the event of divorce or the death of their spouse.
Women’s financial literacy scores are typically 13% lower than men’s.
The financial literacy gap leads women to have lower financial wellness (including the ability to make ends meet, debt levels, the ability to come up with money for an emergency, regularly saving for retirement, and planning for retirement). Women of color tend to lag behind their white counterparts on all measures of financial wellness, with the greatest gaps in planning for retirement (63% lower) and in debt constraints (50% lower).
Disparities exist in the rates of financial literacy across racial and ethnic groups in the U.S.; Black, Latino/Latina, and American Indian/Alaska Native populations tend to have lower rates of financial literacy than their white counterparts. Black women and Latinas see even greater disparities; their scores are 40%-45% lower than the scores of white men.
