The wage gap between men and women has been what seems to be a never-ending fight for equal pay, with women earning about 76¢ to a man’s dollar, and minorities earning even less. A problem that has not received the same recognition – but is equally damaging in the fight for equality – is the wealth gap, in which women invest only 32¢ for every dollar invested by men. I sat down with DeLynn Zell, CEO of Bridgeworth Financial, and Alice Womack, Associate Managing Director in Private Banking at Oakworth Capital Bank, to talk about the differences between the wealth and wage gap and how they are affecting women in business.
Why do you think the wealth gap is less talked about than the wage gap?
People have not been focused on the wealth gap because it tends to be a stereotypical subject. Some women are uncomfortable talking about wealth and some women tend to be better at saving than investing. In the older generations, most women would depend on their husbands to control their investing, but in recent years, I have seen that women have shown more interest in investing and have had to step up to take on a more active role with their finances. Women are inheriting a tremendous amount of money and the wealth gap will be closing. I don’t know why it is not talked about because it should be. In the next 10 years, I see that women are going to be controlling the majority of the wealth in this country.
They are both important. The wealth gap encompasses the wage gap, it encompasses a lot of things including confidence in investing, risk tolerance, and career gaps. Women tend to have more gaps in their career because they are usually the caregiver of the family regardless of income. The less time women spend working, coupled with the wage gap while they are working, means less money to be put aside for investing. The ability to take on more risk and the confidence in doing so, will reduce the wealth gap. The wealth gap is a broader subject.
How has the wealth gap affected your performance and desire to climb the corporate ladder?
Early on in my career, we were on commission. However, I later learned that 2 of the guys that started when I did were being given a stipend for a year and I was not. The head of the firm didn’t think women could make it in our field but thought that by giving me a shot, he was doing me a favor. That only made me work harder to prove myself. Now, I’m fortunate enough to say that things worked out in the end.
I took time off to be with my children and fully exited the workplace for two years. When I did go back, I spent several years in a part-time role. If I had to do it all again, I would make the same decision today, but it does affect your ability to save for retirement. Not only did I not have income to contribute to my retirement plan, I missed out on the benefit of my employer match of my personal contribution. Investing early on is critical to growing your wealth, and the caregiving years for children are typically fairly early.
How in your workplace do you try to combat the wealth gap among employees and clients?
As a female, I am sensitive to that and have made sure that wages are based on job description and performance. Nothing is based on gender. I’ve heard older people in the past make comments like “He’s got a wife and kids at home, he should make more than a woman who is the second breadwinner in her family.” While that is something that has gone away quickly with the younger generations, I am afraid we still have some of that attitude.
From a client perspective, education and awareness are important. I think women are starting to feel more and more comfortable talking about finances. It is encouraging to see more advisors and financial institutions incorporate programs and make efforts to equip and educate women financially. When advising couples, we make a concerted effort to hear both spouses. Often during financial planning sessions, there is a spouse that is more comfortable talking for the couple. We are mindful to draw out the other individual to ensure that their voice is equally heard as they may have never given thought to options presented to them until they learn what is available. Research has shown that women are very comfortable with saving and bill paying, but far less comfortable than their male counterparts when it comes to investing. Our role is to encourage them to learn more about and be responsible for their individual financial health.
Do you feel like the glass ceiling is still intact or have we broken through?
I think in many industries it has been broken, but there are some where it still exists. I do think it’s generational as well. I see a difference in attitude between the 30-40 year olds and 50-60 year olds I work with. The younger generation is more progressive and has grown up seeing women at work while the older generations might not be used to seeing women in the workplace. We are seeing tremendous strides as the younger generations take control. While it may not be completely broken through, there are more shatters in it than there has ever been.
The statistics are trending positively. There are more women in the workforce now than ever before. About half of the labor force for females are also in executive management and professional roles. However, women continue to lag pretty substantially behind men in leadership roles that include C-Suite and top management positions, political offices and Board seats.
How do you think corporate America should continue to work towards closing the wealth gap?
I think there has to be mindful attention paid to ensuring that compensation has no reflection of gender. When I was in college, it was not uncommon to see women in accounting, but I didn’t see too many in finance. I have heard it said that men seem to talk to their daughters about saving while they talk to their sons about investing. A lot has changed, but we need to make sure we are educating and encouraging women to focus on wealth accumulation.
We need to make it less of a social stigma for men to take on those caregiving roles for children and parents. Employers have to encourage men to know that it’s okay to take the time off either short or long term if it makes financial sense and encourage balance for a family. I have also witnessed the reluctance of employers to hire or promote women due to their expectation that they will leave the workplace even if that is not in their plans to do so. Hopefully over time there will be more cultural acceptance and encouraging workplace policies for those scenarios.
Financial education among women also continues to be very important as they control more and more of the wealth in the U.S. Women tend to live longer, outliving their spouse, and need additional resources to do so. Unfortunately, fifty percent of marriages end in divorce. It is critical that women understand and take responsibility for their financial health.