Advisor Resources: BMO Wealth Institute

Financial concerns of women

financial-concerns-of-women

Women have made incredible strides, both professionally and personally, in the last half-century. They are better educated, have greater responsibility in the corporate world and are leaders in many professions. Despite the professional and financial successes that women in the workplace have earned in recent generations, they are still facing personal issues and unresolved challenges.

Male superhero characters dominated the golden age of American comic books from the late 1930s to the 1950s. In those early years, the only female character to gain any prominence was Wonder Woman1. This paralleled societal expectations of the roles of men and women at the time, with men having the responsibility to provide financially for their families and few women working outside the home. Like many superheroes, and the many incredible women in our lives, Wonder Woman has both substance and great inner strength.

When Wonder Woman was introduced by psychologist William Moulton Marston in 1941, it was explained that her role was to set up a standard among children and young people of strong, free, courageous womanhood; to combat the idea that women are inferior to men, and to inspire girls to self-confidence and achievement in athletics, occupations and professions monopolized by men because the only hope for civilization is the greater freedom, development and equality of women in all fields of human activity2. It should not be surprising that Wonder Woman was created shortly after women gained the right to vote with the passing of the 19th Amendment only 20 years earlier3. Her character incorporates and embodies many of the struggles of the women’s movement from the early part of the century4.

Today, women have made incredible strides, both professionally and personally. Women are better educated, have greater responsibility in the corporate world and are leaders in many professions. According to the National Center for Education Statistics, female college enrollment in 2012 was significantly higher than male enrollment, both in undergraduate programs (56% vs. 44%) and in graduate level programs (59% vs. 41%)5. In fact, women have outnumbered men in higher education since the late 1970s6. This represents a major change from the early 1900s when only 19% of all undergraduate college degrees were earned by women7.

In 1940, before the start of World War II, women made up only 27% of the U.S. workforce8. Women now hold the majority (52%) of management, professional and related positions9. Women are successful in many professions, comprising 60% of accountants and 54% of pharmacists nationwide10. However, one area that has not seen comparable growth is the top leadership position in the country’s largest companies. As of 2014, women held less than 5% of the CEO positions and only 25% of executive and senior level roles at S&P 500 companies11. In time, more top roles will likely be filled by women as exceptional women move up through lower management ranks, where they are already in the majority.

Financial concerns of women infographic
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With all of this progress, women are now the primary breadwinners in over 40% of U.S. households. This represents an almost four-fold increase from 196012. Women also own 30% of all private businesses in the United States, employing over 7.8 million Americans13, and control 51% ($14 trillion) of U.S. personal wealth. The wealth that women control is expected to grow to $22 trillion by 202014.

Despite all the professional and financial successes that women have earned in recent generations, they are still facing personal issues and unresolved challenges. The U.S. Census Bureau reports that women overall earn only 78 cents for every dollar that a man earns. While this gap is still large, it is smaller than it has ever been15. And women aged 25 to 34, who are better qualified than older age groups, earn 93 cents for every dollar that a man earns16. Much of this differential increase is tied to improved education and employment opportunities for women.

Equally troubling is the fact that highly paid time-starved women are still taking on significantly more of the housework than their spouses. They are also more likely to be unhappy in their marriages and to get divorced, in comparison to couples where the husband earns more17. Progress is a double-edged sword, complicated by the pressure many women feel to take care of loved ones, sometimes at their own personal and financial expense. It seems that financial and career success comes at a price for women and there is still more work to be done to truly level the playing field. For many women, taking care of others is a personal expectation, despite its high cost. However, loss of financial independence is a significant concern18.

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1 The Golden Age of Comics. PBS website. (accessed January 2015)
http://www.pbs.org/opb/historydetectives/feature/the-golden-age-of-comics/
2 The Last Amazon: Wonder Woman Returns. Lepore, J. New Yorker Magazine, September 22, 2014.
http://www.newyorker.com/magazine/2014/09/22/last-amazon
3 19th Amendment. History.com website. (accessed January 2015)
http://www.history.com/topics/womens-history/19th-amendment
4 The Surprising Origin Story of Wonder Woman. Lepore, J. Smithsonian Magazine, October 2014.
http://www.smithsonianmag.com/arts-culture/origin-story-wonder-woman-180952710/?no-ist
5 Table 105.20: Enrollment in Educational Institutions, by Level and Control of Institution, Enrollment Level, and Attendance Status and Sex of Student: Selected Years, Fall 1990 through Fall 2023. National Center for Education Statistics. Digest of Education Statistics, January 2014.
http://nces.ed.gov/programs/digest/d13/tables/dt13_105.20.asp
6 The Male-Female Ratio in College. Borzelleca, D. Forbes, February 16, 2012.
http://www.forbes.com/sites/ccap/2012/02/16/the-male-female-ratio-in-college/
7 Women’s History in America (excerpted from Compton’s Interactive Encyclopedia, 1994–1995). Women’s International Center website. (accessed February 2015)
http://www.wic.org/misc/history.htm.
8 American Women in World War II. History.com website. (accessed January 2015)
http://www.history.com/topics/world-war-ii/american-women-in-world-war-ii
9 Statistical Overview of Women in the Workplace. Catalyst, March 4, 2014.
http://www.catalyst.org/knowledge/statistical-overview-women-workplace
10 Five Professions Ruled by Women. DuBois, S. Fortune, March 11, 2013.
http://fortune.com/2013/03/11/5-professions-ruled-by-women/
11 Catalyst Pyramid: Women in S&P 500 Companies. Catalyst Inc, January 13, 2015.
http://catalyst.org/knowledge/women-sp-500-companies
12 Breadwinner Moms. Wang, W., Parker, K. and Taylor, P. Pew Research Center, May 29, 2013.
http://www.pewsocialtrends.org/2013/05/29/breadwinner-moms/
13 The 2014 State of Women-Owned Businesses Report. American Express OPEN, March 2014.
https://www.americanexpress.com/us/small-business/openforum/articles/women-launching-1200-new-businesses-a-day-new-research-shows/?linknav=usopenforum-search-article-link9
14 Women of Wealth. Ettinger, H. and O’Connor, E. Family Wealth Advisors Council, 2012.
http://familywealthadvisorscouncil.com/wp-content/uploads/pdf/FWAC_WomenOfWealth_12pp.pdf
15 The Gender Pay Gap is the Smallest it Has Ever Been. Taube, A. Business Insider, September 18, 2014.
http://www.businessinsider.com/gender-pay-gap-is-smaller-than-ever-2014-9
16 On Pay Gap, Millennial Women Near Parity – For Now. Pew Research Center, December 11, 2013.
http://www.pewsocialtrends.org/2013/12/11/on-pay-gap-millennialwomen-near-parity-for-now/
17 Yes, Men Should Do More Housework. Thompson, D. The Atlantic, Dec 10, 2013.
http://www.theatlantic.com/business/archive/2013/12/yes-men-should-do-morehousework/282165/
18 High Income Women Investors – A Spectrem eZine. Spectrem Group, 2014.
http://spectrem.com/Content_Product/High-Income-Women-Investors.aspx

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