How Much More Women Spend on Haircuts, Mortgage Loans, Cars and More Thanks to the ‘Pink Tax’
The gender wage gap has been generally, although slowly, closing since the 1960s, according to Forbes. While that’s some good news — but pay disparity isn’t the only reason that women have less purchasing power than men.
You won’t find it in the IRS tax code, but the so-called pink tax is real, it’s relentless and there’s hardly a corner of the economy where it doesn’t give women less for more. The pink tax has been on the national radar for years, but awareness doesn’t always translate into action. With just days left in 2021 and the holiday shopping season in full swing, the pink tax is creating two different sets of price tags for just about all the things that people buy.
What Is the Pink Tax?
In 2015, the New York City Department of Consumer Affairs (DCA) released a study that confirmed and quantified a long-held suspicion — that women had been paying more than men for nearly identical things that both genders regularly buy.
The 75-page study sampled goods that are common to every age and stage of life across all major industries that are sold at all major retailers.
The study was called “From Cradle to Cane: The Cost of Being a Female Consumer” — and the title tells the story.
In every industry and for every age group, products made for girls or women were more likely to cost more than similar products made for boys and men.
A pink Radio Flyer scooter cost twice as much as an otherwise identical red one — likewise for boys and girls helmets and backpacks. Nearly identical toys, jeans, blazers, shampoos, razors, shaving creams, lotions, dress shirts, support braces, bladder pads and canes cost more when they were marketed to girls or women, and the list went on and on.
Be Aware:
Well, They’ve Fixed That Since 2015, Right?
According to a 2020 report from Intuit/Mint that was recently updated for 2021, little has changed in the six years since the NYDCA report outlined the reality of the pink tax down to the penny.
The report estimated that women, girls and the people who shop for them spend $1,351 more per year than people who buy non-pink tax items marketed to men. That’s more than $108,000 over the course of an 80-year life.
But the pink tax extends to services, too. Women pay 40% more for haircuts, 64% more for dry cleaning and 0.4% more for mortgage loans.
Heading into the heart of the holiday season, it appears that the pink tax is indeed alive and well.
The Car Pink Tax: Women Also Pay More To Get Around
Keep in mind that the winter holidays also bring the traditional car-buying season. The pink tax strikes here, too.
According to 2021 research from the auto insurance company Jerry, women pay more at nearly every stage of vehicle ownership. They pay an average of $117.12 more than men when buying cars, $22.94 when getting them repaired and women pay $142 more per year to own a car than their male counterparts.
Marketing Is Responsible for Some of the Pink Tax
The obvious origin of the pink tax is gender discrimination. While that certainly plays a role — particularly with things like cars, where preconceived notions are involved — there’s more to it than that.
A lot of it is marketing. According to Intuit/Mint, the industry term for packaging products specifically to be sold at a premium to women is called “shrink it and pink it.” Those products cost 42% more. Some of that comes from legitimate production cost increases associated with adding color, special graphics or different packaging to a portion of a larger manufacturing run. In other cases, women’s products cost more because of data ideas about women being less sensitive to pricing than men.
But the Problem Goes Much Deeper Than Fifth Avenue
At the tail end of December 2020, Ms. magazine released a research report on the origins of the pink tax, which has been costing women billions of dollars per year. The report found that gender-biased government policies were at the root of the problem.
Virtually every country on Earth has used the World Customs Organization’s Harmonized Commodity Description and Coding System to classify traded products since 1988. The system differentiates between men’s and women’s products with different product codes, and different product codes often get different tariffs and, therefore, different tax rates. Retailers mark up the prices of high-tariff items to offset the tax costs.
According to Cambridge University, import tariffs on gendered goods across the entire world almost invariably place higher taxes on products for girls and women — even when the products are identical — based purely on their gender code.
The report also found that this kind of gender-biased tariff inequality was much less common in countries where women have a greater representation in government.
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