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Why HR Needs to Know About This Triple Threat to Your Financial Security

Why HR Needs to Know About This Triple Threat to Your Financial Security

Recent headlines for Equal Pay Day called out the need for women to have financial security, which enables so many other positive outcomes for themselves, their families, and their communities.

Of course equal pay is a key component of financial security, but it’s not a silver bullet. Women actually face a “triple threat” to their financial security — the gender wage gap, raising a family, and providing care to loved ones as they age.

First, the gender wage gap.

In 2021, the average U.S. woman earns just $0.82 cents per dollar earned by U.S. men. Pay gaps are even wider for many women of color.

Each life milestone widens the gap. Just one year out of college, white women earn 7% less than men, which grows to 22% less after marriage. The gulf widens when a child is born -- mothers working full-time make 31% less than fathers.

[Related: A Single Woman's Seven-Point Financial Manifesto]

The second threat is childcare.

The U.S. has no federal paid leave program, universal childcare, or pre-kindergarten. Affordable, high-quality care is especially hard for families of color to access. Without a care infrastructure and facing prospects of working at a 31% gender wage gap, only 66% of mothers with children under age six return to work.

Meanwhile, 72% of both working moms and dads agree that women — but not men -- are penalized in their careers for becoming a parent. The long-term financial security implications for women can be profound.

The third threat, often overlooked, is family caregiving.

When a spouse, partner, sibling, parent, or in-law needs care, women are more likely to be pulled into the care provider role than men, and they pay for it. Those who reduce their work hours or leave the workforce lose over $324,000 in lifetime earnings.

Among women who are working family caregivers, 42% reduce their work hours, 39% take significant time off, 22% take a demotion, 13% turn down a promotion, and 27% leave the workforce entirely. If they return, they’ve lost 16% of their earning power.

Family caregivers also spend on average 20% of their already-lower earnings on caregiving-related expenses — money they are not saving for their own futures. In fact, women who are family caregivers have $40,000 less saved for retirement then men who are caregivers.

This triple threat to financial security makes women who are caregivers 2.5 times more likely to end up in poverty compared to non-caregivers. They’ve had to mortgage their own long-term financial security to fill in for the gender wage gap, lack of care infrastructure, and workplace bias against caregivers.

[Related: Caregiving Will Transform Your Business: Are You Ready?]

As our nation navigates racial equity issues, our corporate and public policy leaders must address the reality that caregiving pressures make it especially hard for women of color to achieve financial security.

How is the “triple threat” heightened for them? Consider this:

  • Latinas earn only $0.55 cents per $1.00 earned by white non-Hispanic men, yet still 32% of Latina mothers are the main breadwinners in their families. They also have one of the highest rates of family caregiving, and 45% spend over 30 hours per week caring for an adult family member. They spend on average 44% of their income on caregiving expenses — three times the 14% of income that white women spend.
  • Black women earn only $0.63 cents per $1.00 earned by white non-Hispanic men. Black mothers are more likely than any other racial or ethnic group to be their families’ main breadwinners, at 68% vs. 37% for white mothers. Over 50% of Black mothers are also caring for an aging family member at the same time. These family caregivers are younger on average and spend more than 34% of their annual income on expenses related to providing care.
  • Asian American and Pacific Islander women earn $0.85 cents per $1.00 earned by white non-Hispanic men. They are much more likely to live in multigenerational households at 17% vs. 7% for the general population. In fact, they are twice as likely to care for elders than the general population of the same age — 42% are currently family caregivers.
  • Native women earn $0.60 cents per $1.00 earned by white non-Hispanic men. In addition to childcare, family caregiving pressures are increasing. Native Americans are one of the fastest growing groups of non-white elderly in the U.S. and are likely to receive most of their care from family members.

So, what can you do?

Edna Kane Williams, Chief Diversity Officer at AARP, says:

Make sure your employer is connecting the dots — addressing the ways that caregiving, gender equity, and racial equity all go hand-in-hand. Often, employers are not thinking about caregiving as an issue that can derail the diversity, equity, and inclusion goals they have for their teams.
  • First, share this article with your manager, HR leaders, and C-suite and ask them to keep the conversation going beyond Equal Pay Days. Remind them that companies with diverse teams and caregiver supportive workplaces actually have higher financial performance.
  • Second, encourage your leaders to take specific action to address the intersectionality of caregiving, gender, and racial equity in your workplace. Bring them ideas on how to do it, such as starting a caregiving initiative with your ERGs.
  • Third, drive change in your own team. Invite managers to do a quick online training about how to support employees with caregiving responsibilities. Host a team workshop to help caregivers create a personalized action plan, or a lunchtime event to help your teammates prepare to become caregivers.

[Related: The Unemployment Numbers We Need to Be Talking About, And Actions Employers Should Take to Counteract Them]

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Heather Ainsworth is an Advisor to AARP Family Caregiving and CEO of Workable Concept. She advises employers on affordable, inclusive strategies to create workplaces that support all employees who have caregiving responsibilities. She also provides career coaching for working parents and family caregivers. Find her at heather@workableconcept.com and @heathains.


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