First of all, we think calling it a “Pink Tax” says a lot about the problems in our society. Colors are not gender specific. Boys can wear pink, girls can wear whatever the f*ck they want.
The Pink Tax Explained and How It Impacts Your Wealth as a Woman
Let's break it down first...
What’s the Pink Tax?
At its simplest, the Pink Tax is gender-specific pricing - but not in a good way.
And no, it’s NOT a specific tax - you don’t get dinged by the IRS.
The Pink Tax is a discriminatory practice of having goods and services that target women cost more than goods and services that target men or the general public.
It’s also known as the “tampon tax” - since people who menstruate are taxed simply for having a uterus due to the nature of them paying a tax on feminine hygiene products (oh, but condoms are covered by HSAs? Oh, ok, cool).
Why Does the Pink Tax Happen?
A bunch of dudes in big marketing firms and at head-honcho companies decided to capitalize on the bullsh*t notion that women like to SPEND SPEND SPEND rather than INVEST INVEST INVEST. They decided to take their biased attitude of women wanting to shop until we drop rather than grow our wealth - and put it into their marketing. To add insult to injury, they took that bias and twisted it into profits for themselves by making these “gendered” products cost more than gender-neutral products or products targeted for men.
There’s also the problem of tariffs. Can you believe that when we import goods, those designed for women have higher tariffs than those for men or for gender neutral categories!?!? These companies then pass that cost on to us!
You’re probably wondering - how pervasive is the Pink Tax?
A study conducted by NYC (Bill de Blasio, wow) found that products targeted towards women (with their pink froo-froo colors) cost an average of 7% more than products targeted towards men or boys.
How is that for the Pink Tax explained?
Examples of The Pink Tax
This is the hard part. The Pink Tax is everywhere. Some are fairly obvious:
And some are less obvious:
- Car maintenance
- Hair cuts
Examples of the Pink Tax are not just related to beauty products or toys for little girls. These can also impact things like clothing or dry cleaning which are less obvious because there isn’t necessarily a 1:1 comparison. It’s hard to compare a woman's fit shirt with a man’s fit shirt. Or shoes for women vs shoes for men. Clothing is particularly difficult because women’s clothing is subject to fast fashion, so not only are you paying more with the Pink Tax, the quality of the clothing is worse compared to men’s clothing.
To add insult to injury, car mechanics have been known to charge women more than men for car repairs. A study showed that when people called with knowledge on car maintenance, they were quoted the same amount, regardless of gender.
But when a woman called with less experience or knowledge, she was quoted an average of $23 more than a man.
As if we didn’t hate going to the mechanic enough as it is.
But you can see this in other silly places too like these ear plugs, or these laxatives, or these hardware tools. Just by slappin' the color pink on them, companies think they can make more money off us –and that is pretty insidious.
How To Avoid The Pink Tax
There are some really easy ways to do this:
- Pick gender-neutral grooming accessories
- Avoid pink colored things (unless you really like it and are ok paying the extra - if there is an extra cost)
- Stop supporting and purchasing products from companies that participate in the Pink Tax
- Buy from women-owned small businesses like Billie - a razor company that actively fights against the Pink Tax with low-cost subscriptions, or Soapwalla - that actively makes gender-neutral soap products that are clean and safe
- Read reviews of car mechanics, dry cleaners, or salespeople to see if they participate in discriminatory pricing
- Go to hair salons that charge based on the length of your hair rather than your gender
But in truth, avoiding the Pink Tax is hard.
If you have a guy friend who can call up the mechanic to get a quote, cool - but we know we’re all sick and tired of needing to ask men for help on things that we know we can do perfectly well on our own.
The Pink Tax Repeal Act
In some places, like California, gender-based pricing of consumer services have been illegal since 1996. Introduced by Congresswoman Jackie Speier (CA-14), she’s now on a mission to pass the Pink Tax Repeal Act at the national level. This is currently a bill in Congress but a decision has not been made yet.
How to Fight the Pink Tax
Until we have strong legislation in our country that prohibits companies from charging more on the basis of gender and gender-based marketing, it will be tough to fully fight the Pink Tax. But don’t lose hope! Here are a couple of suggestions we’ve come up with:
- Support companies like this, this, and this who are actively fighting against the Pink Tax
- Compare prices whenever you’re shopping. Some discriminatory pricing is hiding in plain sight like those dumb laxatives
- Avoid the dry cleaners unless you know they have gender neutral pricing listed up front
- Talk to your friends about what products are charging more because you’re women - and avoid them
- Contact your local representatives to create legislation that stops the Pink Tax
- Call out these companies on social media
How The Pink Tax Ties Into The Gender Wealth Gap
A study conducted by the state of California calculated that the Pink Tax costs women over $1300/year. And that was back in 1994. 1994 - CAN YOU BELIEVE IT!?! Could you imagine what we could do with an extra $1K? We could pay off a debt. We could take a lil’ vacation to Paris. We could INVEST THAT SH*T into our 401k, our IRAs, our Index Funds. We could be doing so much more with that money, not just in that one year, but in every subsequent year that we spend money on goods and services.
If you took that $1300 each year and invested it into low-cost Index Funds, assuming an annual average return of 7%, that money could be worth $20,629.21 in a decade.
The Pink Tax is a problem, not just because it’s insulting, discriminatory, and biased. It’s a problem because it robs us of our agency, it reduces our net worth, and it further perpetuates the gender pay gap and the gender wealth gap.
When a woman makes 79 cents for every dollar a man makes (and even less if you are a BIPOC women or non-binary of color), getting dinged by the Pink Tax puts us even further down the path to financial freedom and autonomy.
Why Money Cannot Be a Taboo Topic For Women
We are strong proponents of talking money, investing, and the gender wealth gap. If you notice a price discrepancy between a product for men vs a product for women, tell your friends. You have the power to decide where your money goes, and where our money goes - collectively - as women. You can make a choice to spend your money on other products and services, like the ones we mentioned above, and support more equitable companies with ethical pricing strategies. It’s why we, here at Penny League, offer a lot of free content and discounts; women should not be penalized for not knowing more about investing.