The country has made great strides towards gender equality in the past 100 years. But without financial equality, full gender equality is not possible. (UBS)

The average American woman earns only about 80 cents for every dollar the average male worker made. Despite the influx of highly skilled women into the workforce, women remain underrepresented in key leadership positions. Women occupy just 21.2% of S&P 500 board of directors’ seats and 26.5% of executive management positions*.


The lack of parity on wages and leadership status isn’t surprising considering women have only gained equal financial footing in the eyes of the law in the last 60 years. The Equal Pay Act of 1963 prohibited sex-based wage discrimination, but that was not the only challenge women faced. Until 1974, when the Equal Credit Opportunity Act was passed, women needed to have a male co-signer when applying for credit in many situations. It was only in 1981 that the Supreme Court overturned state laws that gave husbands unilateral control of jointly owned property.


Speaking at a UBS virtual event, sociologist Dr Jill Yavorsky noted that legislative progress for women has actually stalled over the past 25 years. “We haven't seen a whole lot of movement in terms of the legislation that actually encourages employment and bread-winning for women, [like] reliable and affordable childcare or paid maternity and paid maternity leave."


Companies are slowly shedding discriminatory practices that prevented women from rising up the corporate ladder such as penalizing women who had children by firing them or passing them over for promotions.


In recent years, activist investors have pushed for more female representation on company boards. The UBS Chief Investment Office notes that studies have shown a positive relationship between greater gender diversity and firm profitability and stock performance. (Contact your UBS Financial Advisor for a copy of the latest report Investing with a Gender Lens 06 April 2020.)


But there are also cultural and social challenges. A UBS Own Your Worth report in 2018 notes how perceptions about traditional gender roles still run deep, with men often seen as financial providers while women take on the majority of the household duties. "Men still dominate the majority of high-income occupations,” said Yavorsky. “So our actual depictions of high income or high powered people are oftentimes men. Even millennial women have grown up with those images."


These social and cultural norms do not just dictate women's career choices. They also prevent women from taking on a more active role in managing their finances. At some point in their lives, 8 in 10 women will likely end up alone and solely responsible for their financial well-being, due to the fact that women outlive men and divorce rates among couples over 50 has doubled in 30 years. Yet, half of married woman still defer major financial decisions to their spouses, according to a 2020 UBS survey, and over 40% of female breadwinners still defer these decisions to their spouse or partner.


This is despite the fact that 82% of women and 74% of men believe that equal participation in financial decisions is necessary to achieve gender equality. Yet, opting out of financial decisions puts women at risk. They may not have the cash to fund their expenses if something happens to their spouse or have enough assets to fund retirement, healthcare and long-term expenses.


With the economic fallout of the pandemic affecting women disproportionately - federal data referenced by the Wall Street Journal showed women exiting the workforce at slightly higher rates than men- these risks are amplified.


UBS developed the Own Your Worth Financial Participation Site for women who want to take steps towards managing their finances and taking their seat at the money table. Visit ubs.com/ mymoneymove to learn more.


*Catalyst, Women in S&P 500 companies, 2019


Main contributors: Shanthi Bharatwaj and Wendy Mock