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Men Don't Always Earn More Than Women. Here's Why That Matters

By Maurie Backman - Apr 25, 2016 at 9:37AM

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There are some industries where women are actually paid better than men. And the better you're paid, the more financial choices you have.

Whether you're an ardent feminist or you simply believe in gender equality, it might irk you to learn that women continue to earn only 76 to 79 cents for every dollar their male counterparts bring in. But while there are many professions where men clearly have an advantage, there are some industries in which women typically get paid more.

According to data compiled by Glassdoor, female social workers and merchandisers earn $1.08 for every dollar earned by their male peers. Female research assistants and purchasing specialists also tend to come out ahead, bringing in $1.07 and $1.06, respectively, for every dollar their male colleagues command. And though the margin isn't huge, women who work as physician advisors, communications associates, and social media experts bring home 2% more than men who do the same.

Higher salary, higher savings
Though saving for retirement is often a matter of discipline more than anything else, it's hard to argue the fact that those who earn more have greater opportunities to save more. Women whose salaries lag behind aren't just losing out on purchasing power today; they're also running the risk of falling short come retirement. A 2013 survey by the Society of Actuaries' and Women's Institute for a Secure Retirement confirms that women typically have less money in retirement than men. This is why it's crucial for women to seek out careers that offer competitive pay, and then maximize those top salaries by saving and investing for the future.

What's a good savings target? It depends on your lifestyle and goals, but as a starting point, you should save at least 10% of your income, and the earlier you begin, the better. Let's say you choose a career with solid growth potential and are commanding an $80,000-a-year salary by age 30. Now let's assume you'll save 10% of your salary each year, your salary will increase by 3% each year, and your investments will yield a 6% average annual return, which is actually a conservative figure in terms of the stock market's historical performance. By the time you reach 65, you'll have over $1.3 million to fund your retirement.

Staying in the workforce
Here's another reason to pursue a better-paying career: If you're planning to have children, the higher your earnings, the more likely you are to have the option to keep working after they arrive. With child care costs continuing to skyrocket, women who make less are often priced out of working and forced into stay-at-home motherhood because their expenses equal or exceed their earnings. A family with two children in full-time day care pays an average of almost $18,000 per year, but in some parts of the country, that figure can easily top the $30,000-mark. What this means is that a woman earning $35,000 a year with an effective tax rate of 25% in an expensive region of the country would probably lose money if she's stuck paying $30,000 in day care fees, even if she allocates the maximum $5,000 in pre-tax dollars to child care and takes advantage of tax credits.

A Pew Research Center report confirms that women's careers are more likely to suffer than men's when children enter the mix. A good 39% of women leave the workforce for a significant period of time to care for a child, whereas only 24% of men do the same. If your goal is to continue working after having children, then you'll need to earn enough for that to be feasible.

Furthermore, having more working years under your belt can help you increase your Social Security benefits, which are calculated based on your top 35 years of earnings. If you take multiple years off to raise children (be it by choice or because your child care costs wipe out your income) and only work a total of 25 years as a result, then you'll have 10 years of $0 in income factored into your personal equation. All the more reason to pick a career that not only pays fairly, but pays well.

Of course, choosing a career where women are typically paid better than men isn't the same thing as choosing a higher-paying career to begin with. While female social workers, for example, may earn 8% more than male social workers, from a financial standpoint, you're better off earning $80,000 in another industry altogether, even if your male colleagues are unjustifiably getting paid more. On the other hand, there's something to be said for feeling valued at work, and in a money-centric society like the one we live in, it's hard not to equate compensation with self-worth and respect.

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