The Gender Wealth Gap

It’s so inspiring to see the progress we have made towards gender equality within Australia through cultural and policy changes across governments, institutions, organisations and businesses, making them more equal for women and men. When I look back on my 20-year career, I can clearly see how far we have come when it comes to things like workplace gender diversity, equal pay, work-life-balance, family-friendly workplaces, etc.

However, one topic which doesn’t seem to be often discussed is the gender wealth gap, which is different to the gender pay gap. Pay is a person’s income, whilst wealth is a measure of a person’s net worth (what we “own” such as savings, superannuation, investments, our home, etc., minus what we owe such as loans or credit cards debt, etc.).

Women’s wealth is a vitally important moral and economic issue.

In a capitalist world, our wealth provides the basis of our financial security. Greater personal wealth provides women with independence, a sense of agency and resilience. It softens the blow of unexpected financial emergencies (e.g. job loss, injury, broken car, needing to leave unhealthy relationships, etc.). A financially well woman is better able to care for dependents (i.e. you can’t pour from an empty cup) and provides herself and her dependents with greater economic opportunities. Greater wealth is an enabler and a tool allowing women to access opportunity and contribute to their world in ways which is meaningful to them.

In an environment without a gender wealth gap, women would have control and influence over half of the world’s wealth. Economically, it would be likely that if more women worked towards greater personal wealth (e.g. increased workplace participation, creating new businesses, investing, etc.) this would have a stimulating effect on our economy. As such, one could argue we are currently not operating at our full economic potential as a nation.

These are some of the reasons why the gender wealth gap needs to be included as a topic on the Gender Equality movement agenda.

Unlike the gender pay gap which is being tackled in our country through legislation and government agencies such as Workplace Gender Equality Agency (WGEA), the gender wealth gap doesn’t appear to be on the agenda of our government. There is very little robust and accurate publicly available information on the extent of this gap in Australia, or its implications on our macroeconomics.

A literature search on the topic identified the yearly WGEA report which stated that women continue to enter retirement with significantly less superannuation than men. Whilst superannuation is a contributor to a person’s overall net worth, it’s only a part of the equation, and an overall analysis of the wealth gap in Australia does not appear to exist.

The Forbes Australia’s 50 Richest People list includes only one woman in the top 10, and 7 women in the top 50 positions.

Similar numbers are reflective of these statistics in previous years. If there was an Australian governing body which measured the total net worth of women versus men, it is likely a notable gap would be found. It would be interesting to know what the value of this gap is, what the contributing factors are, and what the implications of closing the gap would be.

There are likely many factors which contribute to the gender wealth gap in Australia. Some are obvious, such as the gender pay gap, women taking more time out of the workplace to care for family, and often participating in part-time, casual or volunteer work as opposed to our male counterparts who are more likely to participate in paid, full-time work during their entire working life.

However, there are less obvious factors which could also be contributing to this gap such as our culture. A recent HILDA survey found women exhibit much lower financial literacy than men, and that lower financial literacy leads to increased financial stress, a lower propensity to save, and less likelihood of paying off credit card debt each month. It would be interesting to understand the underlying reasons behind this difference in literacy, but this outcome does not appear to have been investigated. MoneySmart has introduced a financial literacy program for school, which schools can opt into should they choose to. Whilst this is a fantastic government initiative, so far it has only reached a small number of schools, and contains no specific targeted material to address our gender financial literacy gap.

In the absence of concrete and factual data or reliable analysis on the topic of the gender wealth gap, anecdotally we can observe that women tend to talk less about money than men, and the topic of seeking wealth doesn’t often come up in conversation – at least not in my circle of female friends. I find that in our society in general, whereas a financially savvy man is considered attractive and ambitious, I often sense that it’s considered unladylike for women to discuss money or to openly profess their desire to seek wealth.

This is why this year’s International Women’s Day theme of #EachForEqual really excites me. I believe that for now, in the absence of any real progress or interest in this space by our government, a large part of closing the gender wealth gap lies with each individual woman.

It’s in our own hands and within our own reach to change our personal wealth position, and thereby make a change to the overall gender wealth gap.

The first step is for us to become self-aware. We then need to become interested in seeing change and to be a part of the change. Next is becoming financially fluent and working towards a higher net worth. In this way, each of us can contribute to the closing of the gender wealth gap, transform us to a more financially secure, resilient, enabled, powerful and influential gender.