The Huffington Post
By: Catherine New
March 21, 2012
Income gap closing: Women on pace to outearn men
Forget equality for women, the fairer sex is on pace to outrun men when it comes to making money.
In remarkable shift from even a decade ago, the majority of working wives will out-earn their husbands in the next generation, according to Time magazine's cover story this week.
It's not just married women who are breadwinning. In the majority of U.S. metro areas, single women with no children in their 20s outearned their male peers, according to Time's story. In Dallas, for example, a 20-something woman makes $1.18 to a man's $1.
The Time story follows on a run of coverage looking at the rise of women in the workplace. Earlier this year, BusinessWeek ran a cover story about the increase in stay-at-home fathers. Reporter Carol Hymowitz pointed out that some 23 percent of wives now out-earn their husbands. "Women 30 and under make more money, on average, than their male counterparts in all but three of the largest cities in the U.S.," she writes.
In a widely read piece in The Atlantic last year, entitled "The End of Men," Hanna Rosin also noted that women now comprise a majority of the workforce and more than half of all managers.
Women dominate today's colleges and professional schools--for every two men who will receive a B.A. this year, three women will do the same. Of the 15 job categories projected to grow the most in the next decade in the U.S., all but two are occupied primarily by women.
Still, feminists are not calling it quits just yet. Women may be outearning men at the beginning of their careers--but that story flips higher up the professional food chain. Some research has shown that there is an 40 percent pay gap between women and men with business school degrees, 10 years out from graduate school. In the end, on average, women still only make 81 cents to the dollar.
The rise in female earning power brings with it a rise in sites aiming to teach women what to do with their cash and a concomitant increase in experts who hasten to point out that women think differently about money.
DailyWorth.com, one of the new female-oriented personal finance sites, reported that 90 percent of its readers said they were their families' chief financial officer--but two-thirds of them lamented that their planning and investing skills were below average. "Research has shown that women, even professional women with good jobs and successful careers, tend to be less financially literate than men," one economics professor at Darthmouth college told The New York Times in 2010.
Women tend to take fewer risks (a good thing for long-view investing), wait until a life-altering event to start saving (like having kids or going through a divorce), and have a greater preference to learn about money in person or in a group than a book, according to experts and studies cited in The New York Times. Others point out that women have unique challenges when it comes to financial planning: They have longer life spans, they earn less overall, and they tend to step out of the workforce to care for children and aging parents.
Of course, many dispute that women need "special" money advice. In blog post on Huffington Post Money, Ms. Magazine's money editor Martha Burke argued that women need only follow the same financial rules as men. It's not the gender that matters, but the circumstances she said. So just as women en masse today are learning about investing, there could be a whole new generation of stay-at-home dads in the future who will be scratching their heads when trying to understand the differences between a 401(k), Roth IRA and Keogh Plan.