Welcome to Episode 5 of Season 2 of the Glorieuses economic newsletter. Each month we write about economy, gender and race with an international perspective, and with the support of researchers.
Last month, we featured a portrayal of researcher Carmen Diop, a pioneer of intersectionality studies in France. This month, we invited the journalist Barbara Wojazer to write on an important topic that remains unknown: the gender wealth gap.
(click here to follow Barbara Wojazer on twitter)
Vous pouvez lire la version française, #Economie, ici.
February, 14th, 2021 – reading time :8 minutes
- Fixing the gender wealth gap is as important as fixing the gender pay gap
- Wealth is usually calculated by household. This hides inequalities behind family units
- Legal and traditional rules around the family hinder women’s access to wealth
“Rigged economies are funneling wealth to a rich elite who are riding out the pandemic in luxury, while those on the front line of the pandemic are struggling to pay the bills », according to Oxfam’s annual inequality report.
The pandemic laid bare the inequalities between wage earners, people living paycheck by paycheck, who often lost their income due to the pandemic; and people who were able to fall back on their wealth, financial assets or properties.
And indeed, it only took nine months for the top 1,000 billionaires, mainly white men, to regain the wealth lost during the pandemic, according to Oxfam.
This last piece of information – out of top 1,000
billionaires, most are white men – won’t come as a surprise for many of us. Wealth divisions also follow gender and racial divisions, and the fact is that women accumulate less wealth than men do. For women of color, the wealth gap is even bigger. While American women earn about 79 cents on the dollar compared to men (pay gap), they own only 32 cents on the dollar (wealth gap); and women of color own only pennies on the dollar compared to white men and white women.
Why you haven’t heard of the gender wealth gap
The gender pay gap has become a rallying cry for most advocates of economic gender equality. While many know about the gender pay gap (what people earn), fewer know about the gender wealth gap (what people own – ie land, property, capital).
Why is that? Partly because, up until recently the labor market was seen as the key battleground for achieving economic equality. Because of the fragilization of the social state, having a decent income isn’t enough to shelter from economic insecurity anymore.
“If you haven’t heard of it, it’s simply because we don’t have the data”, says Céline Bessière, a sociologist specialized in gender wealth inequalities. “Internationally, decades of effort
were spent on trying to measure wage inequalities, there’s no equivalent regarding wealth”.
The reality is complicated to grasp, because wealth surveys are usually carried out at the household level, with the effect of hiding the inequality between individuals.
Individual-based statistics are needed. “For feminist movements to be able to act upon an injustice, we need to be able to measure it”, says Céline Bessière.
Gender wealth inequalities are increasing
In France, Marion Leturcq and Nicolas Frémeaux disentangled the individual components in wealth surveys carried out by household. They came to this worrying conclusion: the gender wealth gap increased from 9% to 16.3% between 1998 and 2015.
In the US, the main drivers of wealth are now investment and real estate, CEO and Co-Founder of Ellevest Sallie Krawcheck tells CBS. She adds that “women and people of
colour have been kept away from that”. As investment and real estate become more important in building wealth, the gender wealth gap widens.
There are also more hidden reasons that explain this trend. “We need to go look at what happens within the heteronormative family to grasp the dull scale of inequalities between men and women in our society”, Céline Bessière says.
That is what she did, with co-author Sibylle Gollac, by following families for more than 20 years to study how family arrangements perpetuate wealth inequalities, for their book the Gender of Capital. They
describe wealth inequalities that are particularly noticeable in times of separation and inheritance.
Women have traditionally been disadvantaged by inheritance laws. Just think of Pride and Prejudice: the basis of the plot is that one of five daughters must find a husband to be able to inherit their father’s wealth. Elizabeth Bennet wants to marry for love, but she is pushed to marry to access her father’s wealth. Centuries later, 29 countries still do not grant widows and daughters the same rights as their male counterparts to inherit land and other assets, according to a 2019 OECD report.
According to the same report, 29% of countries restrict women’s equal legal right to property
after divorce or separation.
And even when countries, like France, have “a formally equal law, inequalities remain, including in moments of inheritance”, according to Sibylle Gollac. “what matters is not only the content of the law, it’s how it is implemented by legal professionals”, she adds.
If unequal norms impact relationships all life long, marital separations are a “moment of truth” for Bessière. “Because of fear, threats, violence, women sometimes abruptly leave the household with their children, which has important economic implications”, Céline Bessière comments.
Men have greater access to the wealth escalator
If men and women had the same income, men’s incomes would be more quickly and easily transformed into wealth, researcher Mariko Chang demonstrates in Shortchanged. This explains that even if the pay gap is slowly decreasing, the wealth gap is not necessarily following the same trend. In other words, “ women’s wealth gap would persist even if the gender income gap were eliminated.”, Chang says.
Chang uses the concept of “wealth escalator” to describe how men have greater access to the (legal, institutional, societal) mechanisms that convert income into wealth both inside and
outside the family.
Unequal employment and wage discrimination, but also hindered access to benefits and stock options, and gender roles dictating women’s roles as primary caretakers, which forces labor force interruption – these cumulate to slow down women’s ability to access the wealth escalator – even more so for women of colour.
Because wealth comes from so many sources, “fixing” the wealth gap requires multidimensional policies. Individual-based wealth surveys are needed, for feminists and politicians to be able to precisely evaluate the scale of the gender wealth gap. Laws around inheritance and divorce must be adapted to guarantee equal distribution, and legal professionals must apply that law equally. Finally, governments need to
introduce wide ranging policies that allow women to accumulate wealth – in other words, to get on the “wealth escalator”.
Have you read the Impact newsletter ?
MESSAGE FROM OUR PARTNER
For more than a hundred years, L’Oréal has been dedicated to beauty professions. With an international portfolio of 34 brands, the group managed to achieve a turnover of 29,9 billion euros in 2019 and has more than 88 000 collaborators around the globe.
L’Oréal is an all time leader regarding professional equality. In 2019, women represented 70 % of the total workforce, 53 % of the members of our board of directors, 30 % of the members of our executive committee and 54 % of strategic
In 2019, L’Oréal has been ranked in the “TOP 5 Worldwide” by Equileap, first database to rank 3 500 businesses listed in the stock exchange. The group is also named in the Bloomberg Gender-Equality Index 2020, which values businesses engaged in professional equality.