Inflation and The PINK Tax

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Inflation. It’s a word you’re likely hearing a lot these days. This is because inflation is currently running rampant, and it’s the driving force behind the recent increases in interest rates.  Inflation itself is a broad term, usually used to describe a decrease in the purchasing power of money as the prices of goods and services go up. In the United States, headline inflation rates reached almost 9% in May, which is the highest we have seen in a long time. That said, it feels even higher to me, especially when you fill up your tank with gas, go grocery shopping, or purchase your favorite mascara. If you can even find it that is. Bottom line is that stuff costs a lot more now than a year ago, and while it has always cost more to be a woman in this world, we are getting hit even harder during these times of high inflation. Don’t believe me? Then it’s time to talk about the pink tax.

The pink tax is a term that first came into use in a 1994 California Assembly Office of Research report that showed that 64% of stores charged more for similar products marketed towards women than to men. Shortly thereafter, California passed a law prohibiting retailers from discriminating against consumers according to their gender when it came to the pricing of similar products. Which was great. But predictably, the problem was far from over.

In the nearly 30 years since regulators began looking at this issue, examples abound in nearly every industry of how women pay more for goods throughout their lives than men. Studies have shown that items such as clothing, toys, hair care products, over the counter medication, and insurance all cost more on average if they are marketed towards women. Studies have also shown that overall, women are quoted more for services ranging from dry cleaning to auto repair. In the US, a woman can expect to spend 7% more on average than a man for similar products. Back in 1994, that equated to $1,351 more per year that women were having to spend because of the pink tax. Today, that number is likely much higher.

What’s even more egregious is that these numbers are only taking into account similar products that everyone uses. They don’t take into account the half a trillion dollar global beauty industry that mostly profits off of selling unrealistic beauty ideals to women (In this month’s ShePlace newsletter, which will be published later today, COO Madison Limansky offers her take on this issue). Sure, no one is making the average woman wear make-up, have their nails painted, or color their hair, but one cannot deny that dominant social norms say that women should. We live in a world where there is a lot more ‘shoulding’ on women than there is ‘shoulding’ on men. And all of that ‘shoulding’ is costing us gals a pretty penny.

And then there are goods and services that are not optional, like menstrual products. Yes, I’m going there. Time to talk about periods. Did you know that in addition to a baby formula shortage, there is a tampon shortage happening right now? I appreciated this headline from Time Magazine: The Great Tampon Shortage of 2022: The Supply Chain Problem No One is Talking About. So not only will the average woman spend nearly $20,000 over her lifetime on products related to menstruation, but currently you have to waste time and gas trying to find the damn things. I was going to talk about pantyhose next, but thank goodness we have more or less stopped with that ridiculousness.

So now you may be thinking, but aren’t women paid more in the workplace to cover all of these additional costs they have to bear? HA! Very funny Jacki. Actually, not funny at all, because the gender pay gap is well documented, and means that on average, women in the US make less over their lifetimes than men. I recently read about a class action settlement between Google and thousands of its female employees for, ya you guessed it, underpaying them relative to their male counterparts. Each plaintiff will receive a one time payment of about $5,500, despite the lawsuit finding that Google underpaid them about $16,794 per year on average. A one time payment for annual losses of $16,794? You can’t make this up.

So what can we do about it? For starters, I have been advocating for over a decade that purchasing power is one of the most underutilized tools for social change, and I believe that this is even more true today than ever before. Now more than ever we all need to be more mindful and intentional spenders. In times of high inflation, which is what we are in right now, spending more thoughtfully truly matters.

So here are a few tips on both avoiding the pink tax and saving money more generally. I also welcome you to add your tips in the comments section, because we could all use some help when it comes to saving money.

  1. Just buy less. Don’t get sucked in, as I so often do, to the mindset that you need the latest handbag, dress, lipstick shade, you name it. Try to be more discerning between the stuff you need and stuff you want, and hold yourself accountable to spending less. If you need help, enlist a friend and hold each other accountable together.  Madison loves the TrueBill app, though not female founded, for a budgeting tool. Of course I am going to advocate for Smartpurse for financial education and tools more generally.
  2. On essential goods, especially as it relates to big brands, try to buy from companies with a proven track record of gender equity. Equileap, with their annual global report and ranking, is a fantastic resource for knowing which brands to support. And in case you were wondering, the number one company surveyed for Equileap in 2022 is Mirvac in Australia with a score of 79% on the gender equality scale. That’s right. The number one company worldwide, according to their measurement tool, is 20% away from parity. In addition, Gender Fair, created by the formidable Amy Cross and her team, offers a great brand shopping guide. (see above)
  3. If you see blatant examples of the pink tax in action, take a minute to call it out to the management of the store. And of course, make a note of the brand and product and simply don’t buy it. I also encourage action on social media using #pinktax, #buycotts #IbuyGenderFair for brands that continue to practice the pink tax.
  4. Shop resale and consignment as much as possible. And don’t just make purchases. Take in items you are not using or wearing anymore and trade them for something new.
  5. Whenever possible buy local, buy from small businesses, and especially from women+ owners. The price tag may be more than shopping at a big box store, but you will have a direct impact in the community in which you live. This fall ShePlace, in partnership with SheMoney, will be launching a guide to shopping women+ owned in our home state of Utah. As part of this initiative we will be listening to the business owners in terms of what their needs are and doing what we can to help them thrive. Stay tuned.

The pink tax is yet another reason, on a long list of reasons, why financial knowledge and engagement matters so much. While we cannot control the prices of most goods or services that we consume, our decisions to buy less, buy a substitute product, or buy from a different provider really do matter over the long term. Our individual actions eventually become collective actions that affect the bottom lines of all sizes of businesses. So I’ll say it again. Our consumer purchasing power is the most underused tool for social change that we have. But it won’t be easy. Can it sometimes feel like it doesn’t matter? Yes. Is it often a hassle to do things differently or take the time to stage a protest when faced with blatant sexism? Yes. And conversely, is it worth it to thank and acknowledge the businesses that do seem to care? Yes. It all adds up.

As for inflation, only time will tell if these new prices are more permanent or more transitory. That being said, given the recent and ongoing supply driven shocks to the economy, it feels to me like we are in for a high priced summer. With that in mind, I once again welcome your tips on how YOU are coping with higher prices.

Cheers.

*At ShePlace, we utilize women+ to welcome and include all self identifying women, including cis and transgender women, as well as non-binary and gender fluid individuals. Be sure to follow us @sheplace on LinkedIn and @TheShePlace on instagram.