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Millennial women are struggling financially: Here’s why (and why it’s not their fault)

Everything from rising tuition costs, lack of robust parental-leave policies, and mass incarceration have set young women in the U.S. up for financial difficulties.

Millennial women are struggling financially: Here’s why (and why it’s not their fault)
[Source Image: Ludmila_m/iStock]

There’s no doubt that closing the pay gap between men and women, and across races, is a vitally important step for advancing equity. Measured against the median salary that a white, male, full-time worker earns, women earn 80% of what men do: Hispanic and black women earn just 54% and 60%, respectively. But according to a new report, it’s not enough. In the U.S., young women in particular are struggling to access and build wealth, and this cannot be explained by the gender pay gap alone.

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Clipped Wings was created by the Asset Funders Network, which directs grantmakers and funders in how to support economic equity, as well as the Closing the Women’s Wealth Gap Initiative and the Insight Center for Community Economic Development. In it, the authors delve into exactly why millennial women are encountering financial difficulties today, and how support programs and investments should be redesigned to meet their needs.

[Source Image: Ludmila_m/iStock]

In general, says Jhumpa Bhattacharya, report author and VP of programs and strategy at ICCED, millennials are not faring well compared with previous generations. Many of them entered the workforce during the Great Recession, and all are mired in an economic landscape of stagnant salaries and rising costs.

But millennial women face unique challenges. More women now are delaying or avoiding marriage, but they’re also increasingly having children outside of marriage (57% of babies born to millennial women in 2017 were to unmarried women). “Quite frankly, our economic and social policies are still built around this idea of a two-parent household, where one person–usually the man–is a primary breadwinner. That isn’t working for the millennial generation because they’re not living to those standards anymore.” The U.S. lacks comprehensive paid leave, Bhattcharya says, because the idea of mothers as married women who do not work still prevails in how lawmakers structure economic policies. Yet at the same time, single women who receive public assistance benefits like TANF are required to work to obtain them, which often leaves them in a bind. On top of that, millennial women, more than those of any other generation, are often responsible for caring for multiple generations at one time as their parents and grandparents live longer, which adds another financial burden.

[Source Image: Ludmila_m/iStock]

Young women–especially women of color, who make up  44% of millennial women–are also ten times more likely to be incarcerated than those of previous generations, which significantly impacts wealth-building. And women are disproportionately likely to be the ones posting bail if a loved one is arrested; a report from the Ella Baker Center for Human Rights found women pay court-related costs 83% of the time.

Student debt and the high cost of education is another factor. “We’re seeing that tuition has risen at a skyrocketing rate along with more women and students of color attending college,” Bhattacharya says. “You can call me a conspiracy theorist, but there’s a connection there–as more women and people of color are using education as a stepping stone, it’s becoming increasingly difficult to actually gain wealth from it.” Women graduate with an average of $20,263 in student debt. Debt is especially burdensome for black and Latinx students, who tend to have less intergenerational wealth  and who consequently can access less financial support from their parents than their white peers.

While the debt affects all millennials, women are having a harder time paying it off. Millennials are all but required to go to college to land a well-paying job, but women, once out, face skyrocketing costs of living and encounter fewer opportunities that would offer meaningful financial support. For the same job at the same companies, studies have found women are offered lower pay than men 63% of the time. Bhattacharya also notes between the previous generation, Gen X, and millennials, women’s participation in STEM careers actually declined. “We know that STEM are among the highest-paying jobs and will help you build economic mobility, but what we’re seeing is that the bro culture of the tech industry, especially with the #MeToo movement, is keeping women out,” she adds.

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[Source Image: Ludmila_m/iStock]

There are some obvious fixes to these problems that the Clipped Wings authors enumerate. The U.S. needs more comprehensive parental leave policies that take into account the needs of single mothers, and public assistance benefits that directly support single mothers–as well as multi-generational caregivers. Companies need to examine their biases and enforce equal pay for women, and ensure that their workplaces are safe and welcoming. Student debt forgiveness and criminal justice reform–including ending money bail, which financially burdens many families–would also alleviate burdens on millennial women.

But we also need to go further, Bhattacharya says. She likes policies like universal basic income, which could quickly remedy the economic disadvantages women have faced for decades, but believes they should be targeted first at populations who would most benefit from unconditional cash transfers. “It’s about creating a new floor for people,” she says, pointing to programs like the Magnolia Mothers Trust in Jackson, Mississippi, which provides monthly cash payments specifically to black mothers to address systemic inequities.

And on top of that, the cohort behind Clipped Wings calls for increased investment in programs that help women gain leadership roles in public office or at companies. They write: “Having more women at decision-making tables . . . can change the current dynamic where often women’s unique needs are at best misunderstood or not on the radar, or at worst, purposefully ignored. Increasing the number of women in leadership positions in organizations, elected office, and policymaking roles can help inform, develop, and institute policies and create programs that meet the changing needs of millennial women.”

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About the author

Eillie Anzilotti is an assistant editor for Fast Company's Ideas section, covering sustainability, social good, and alternative economies. Previously, she wrote for CityLab.

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