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What factors contribute to this troubling gender wealth gap? According to Chang, men enjoy greater access to the wealth escalator, which translates income into wealth at a faster rate. This wealth escalator includes perks like fringe benefits (paid vacation days, health insurance, stock options, etc.), favorable tax codes (capital gains tax, tax credits, etc.), and government benefits (unemployment insurance, social security, welfare, etc.). Women are systematically less likely to tap into the wealth escalator because of the jobs they work in and their greater propensity to work part- time. Men are more likely to attain jobs with benefits, receive higher incomes that allow them to save more, work full-time throughout their adult lives, and possess the types of assets that receive preferential tax treatment. Even if the income gap closed today, women would not be able to turn
their incomes into wealth as effectively as men. Women also suffer from a debt anchor that compounds their wealth-building disadvantage. Women tend to have higher interest rates on their debts and are more likely to fall victim to predatory lending practices. Motherhood is another primary cause of the gender wealth gap. Women are more likely to shoulder the financial burden of single parenthood, and in dual-earning couples, mothers are more likely to have primary caregiving responsibility. As Shelley Correll of Stanford University has demonstrated in her research, mothers face stereotypes that decrease their perceived credibility, capability, and worthiness of promotion in the workplace, whereas men experience a wage increase with fatherhood. Mothers receive a 4% wage penalty for the first child and a 12% penalty for each additional child. So how can policy-makers address this dire situation? Chang provided a step-by-step recommendation for chipping away at this intimidating problem. Because current policies fail to give women access to the wealth escalator, Chang suggested incorporating caregiving into the wealth escalator and encouraging more caregiving from men. Employers must throw away the ideal worker norm, in which employees are expected to be constantly available, and restructure the workplace to match the needs of both women and men. In her book, Chang also recommends giving women greater access to low-interest loans, changing the definition of assets in divorce laws, disconnecting certain benefits from full-time employment, and helping single parents tap into the wealth escalator. Such policies can help ensure women and men have equal access to the wealth escalator and share equal responsibility for caregiving. Chang argued that the wealth gap is not a womens problem. Men should care about decreasing the gap not only because it affects the economic wellbeing of the women in their lives, but because they should no longer bear the sole burden of providing financially for their families. From a broader societal perspective, high levels of inequality and massive economic disadvantage prevent individuals from contributing productively to the economy and to their communities. This talk was sponsored by the Clayman Institute for Gender Research, the Center for the Study of Poverty and Inequality, and the Vice Provost for Graduate Education at Stanford University. Chang, currently at Insight Center for Community Economic Development, received her PhD from Stanford University.
- Alison Perlberg is a graduate student in the Department of Sociology. She is part of the Clayman Institute Student Writing Team covering gender topics at Stanford.
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