Aspen Ideas talk: The gender wage gap no one is talking about
One morning five or six years ago while entrepreneur Sallie Krawcheck was applying her third coat of mascara, the former Wall Street CEO had a life-changing realization.
“It struck me — almost in a way that physically hit me — that the retirement-savings crisis in this country is actually a woman’s crisis,” Krawcheck said.
The U.S. retirement-savings crisis that is “so big — $13 (trillion), $14 trillion in size for a savings gap — and the solutions to which are so nasty — tax increases, entitlement cuts — that we’ve essentially stopped talking about it because we can kick that can down the road,” she said.
On Thursday, gender adviser Pamela Reeves interviewed Krawcheck before a crowd as part of the Aspen Ideas Festival discussion “The Gender Gap No One Is Talking About.”
The retirement-savings crisis is a women’s crisis in part because working women retire with two-thirds the amount of money that men do, Krawcheck said.
One of the factors fueling this discrepancy is the gender wage gap, which is currently 88 cents to a man’s dollar, she said.
But the wage gap between women and men, which has been a hot topic now for decades, is only one part of this puzzle.
Krawcheck said the gender gap that’s not being talked about but that is driving the retirement-savings crisis is the “gender-investing gap,” which refers to the vast disparity between the number of men who invest their money versus the number of women.
There are several “myths” as to why women invest less than men, Krawcheck said, including that women are not as good at math, women are not as good at investing and women are too risk-averse.
Krawcheck debunked all of these falsehoods and said research shows women tend to be more risk “aware” — not risk-averse — than men.
A former executive at Citigroup, head of investments at Bank of America and CEO at Merrill Lynch, Krawcheck said the whole financial industry “feels set up for men.”
In supporting this assertion, Krawcheck shared a statistic that she “couldn’t believe was true” the first time she heard it.
Year over year, fewer than 2 percent of men leave their financial advisers, Krawcheck said, whereas for women, more than 70 percent of widows leave their deceased husbands’ financial advisers within one or more years after the husbands’ deaths.
Krawcheck also drew attention to the more symbolic masculine elements of the financial industry, such as the use of war and sports analogies in stock trading and icons like bulls used to represent financial institutions.
The retirement-savings issue also is deeply troublesome for women because they tend to live “five, six, eight years longer than men,” Krawcheck said. “Walk through any nursing home in this country, and it’s 80 to 85 percent women.”
With the goal of empowering women to take control of their financial well-being, Krawcheck launched Ellevest, a digital investment platform strictly for women, in May.
Along with increasing women’s investing, earning equal pay also will help alleviate the retirement crisis, she said.
Krawcheck said research shows that closing the gender wage gap will close the retirement-savings gap by one-third.
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