The cost of living in Europe is increasing. As the world is trying to rebound from the significant effects of COVID-19, the after-effects of the pandemic and the ongoing Russia-Ukraine War played havoc with oil and natural gas markets in Europe followed by the rise in food prices, rapidly increasing interest rates, and surging energy costs. These are the factors that have been driving up European inflation.
High inflation and rising prices are disproportionately affecting women, who often have to choose between food, housing, and healthcare.
As women report lower financial well-being than their male counterparts, several reports claim that women are most vulnerable to these changes.
In other words, when prices rise faster on average than the salary-growth rate, women are more likely to be impacted by price hikes than men.
According to European Consumer Payment Report 2022, published by Intrum, women have fewer financial buffers than men. Male respondents save more money than women every month and women are overrepresented in the group saying they don’t save any money at all.
Today as one of the best and exclusive gender data suppliers, we will discuss why and how women are more sensitive to cost hikes.
Smaller Financial Margins
Due to lower wages, the gender pay gap, and the fact that women are more likely to work part-time or in low-paid jobs. Women are also more likely to take time off work to care for children or elderly relatives, which can impact their earning potential. When the cost of basic necessities like food, housing, and healthcare rise, women with smaller financial margins may struggle to make ends meet.
They may have to cut back on other expenses, like childcare or transportation, to pay for these necessities. This can have a ripple effect on their overall financial well-being, as they may not be able to save for emergencies, invest in their future, or retire comfortably.
Women are less likely to ask for a pay raise
Women not asking for pay raises can lead to a huge financial equality gender gap. There are a lot of reasons that can make women less likely to ask for pay raise. Women are often called ‘unqualified’ for the position by their male counterparts.
On social occasions and in organizations, men in high positions often display misogynistic attitudes and behaviors toward their female partners.
Sometimes, women may underestimate their own value and contributions to the workplace, which can make it difficult for them to advocate for themselves and negotiate for higher pay.
Women ask for raises as often as Men but are less likely to get them
Again, women asking for pay raises but not getting them can also lead to a huge financial equality gender gap. Research has shown that women ask for raises as often as men, but are less likely to get them. As women recognize the unfairness of this gender gap, they are confidently negotiating for more money.
But how often do they receive what they ask for?
HBR research found that women who asked obtained a raise 15% of the time, while men obtained a pay increase 20% of the time.
Even if the difference seems small, it will only increase over time.
Role of Financial Education
A lack of financial education can have a significant impact on women’s ability to navigate inflation and other economic challenges. Or you can say lack of confidence can be a major obstacle to building financial literacy and taking control of one’s finances.
Intrum’s European Consumer Payment Report found that men were more likely to correctly answer a question about inflation impact when tested on their knowledge of basic financial concepts. The percentage of men who got the question right was 51 percent, while the percentage of women was 40 percent.
Women’s vulnerability to cost hikes is closely tied to their economic status and the systemic barriers they face in the workforce. Addressing these inequalities and creating more equitable opportunities for women can help reduce their vulnerability to cost hikes and improve their overall financial stability.
USE MERIT500 DATA AS A TOOL TO SHAPE POLICY AND REGULATION
With MERIT00’s exclusive gender data, financial institutions can create a more comprehensive picture of market opportunity and develop tailored products and services tailored to women’s needs.
With MERIT500 Remuneration Data, companies can help to ensure that pay decisions are based on merit and performance, rather than unconscious biases.
Companies can use MERIT500 remuneration data and gender data to set benchmarks and targets for pay and promotions and to track progress over time. By setting specific goals for reducing the gender pay gap, for example, companies can hold themselves accountable and work towards greater financial equality.
Let MERIT500 help fix the bridge the financial equality gender gap. Get in touch with us today.
Originally published here https://www.merit500.com/how-women-are-most-vulnerable-to-cost-hikes