How pink tax impacts your finances
A few days ago I was in for an overdue haircut when my hair stylist accidentally clipped a tiny bit of skin off the top of my ear. I barely felt anything, but I knew something was amiss when I heard her go “oh, no!” and saw blood accumulate in a chunky droplet on my left ear.
She ran into one of the backrooms, and came back with antiseptic wipes, clotting powder, and profuse apologies. “I am so so sorry, “ she kept going, and added, “needless to say, your haircut is free today.”
As I walked out with a free haircut and a bandage on my ear, I found myself relieved because I had just saved $150. “Not bad at all,” I thought, “I could get used to sacrificing a little of my ear for a free cut.”
Joking aside (because I do love and need my ear), this unexpected saving was nothing to sneeze at, particularly compared to the measly $25 + tip my husband typically pays for his haircut.
(Ok, fine, perhaps this is not exactly a fair comparison, as he does have less hair than I do, but having to pay six times as much as someone else for a comparable service still struck me as excessive.)
“Is this because I always prioritize quality when he tends to look for the lowest price,” I pondered, “or am I paying what is commonly referred to as ‘pink tax’?” I decided to give this some thought.
What is pink tax?
“Pink tax” is not a real tax, of course, but a term referring to gender-specific pricing practices that create disproportionate financial burden on women.
The term itself was coined in 1994, when California’s Assembly Office of Research found that 64% of stores in five major cities charged more to dry clean a women’s blouse than a man’s shirt. This resulted in the passing of the state-wide Gender Tax Repeal Act of 1995, making it illegal for businesses to charge discriminatory prices based on a person’s gender.
Some other states followed suit in the ensuing decades: Connecticut, Florida, South Dakota, and most recently New York have released reports on gender-based pricing. Consumer Reports highlighted the issue in 2010 with a study that found women were paying as much as 50% more than men nationwide for comparable products. The 2015 report by the New York City Department of Consumer Affairs confirmed gender-based price disparities on 794 different products across 91 brands sold throughout the city.
The comparable findings across reports released over the course of three decades show that discriminatory pricing based on gender has been alive and well during that time.
The ever-thriving pink tax inflates the price of retail goods, creating a larger financial burden for women at a time when inflation has already driven prices up for many goods. In a 2020 paper they released, the California Senate State Committee on Judiciary and Senate Select Committee on Women, Work & Families stated that women pay an average of about $2,381 more for comparable goods and services than men per year, which can add up to about $188,000 in pink tax throughout a woman’s life.
The picture becomes even starker when we consider that women walk into a store with less purchasing power than men: according to The World Economic Forum’s Global Gender Gap Report 2022, for example, only 5 out of 146 countries analyzed achieved a score higher than 0.80 in wage equality (with a score of 1.0 meaning full wage parity). Additionally, 129 countries reported a reduction of women’s participation in the workforce relative to men’s.
In the U.S. where women overall earn about 83 cents for every dollar that a man is paid (with Black women earning 63 cents and Hispanic women 58 cents for every dollar a white man earns), and where 41% of working women received neither a pay raise nor a better-paying job between August 2021 and August 2022 according to one survey, the consequences of the situation go beyond mere numbers. For one, making less for the same amount of work and paying more for the same goods doesn’t exactly encourage great mental health. Unsurprisingly, more women report that money negatively impacts their mental health than men (46% of women, compared to 38% of men, according to this Bankrate poll from 2022).
Categories affected by pink tax
Gender-based price disparities are especially prevalent in personal-care products, including soaps, razors, lotions, and deodorants. Studies and reports found various percentages in this sector: the above-mentioned NYC-based government study found that women paid an average of 48% more for shampoo and conditioner, another analysis in the UK found that women’s deodorant was on average 8.9% more expensive than men’s, and women’s facial moisturizer 34.28% more expensive.
On a related note, menstrual products are still being taxed in 21 states, including in Indiana where barbecue sunflower seeds and in Wisconsin where gun club memberships can be purchased tax-free. This Healthline article quotes Jennifer Weiss-Wolf, author of Periods Gone Public: Taking A Stand For Menstrual Equity, stating “if barbecue sunflower seeds are tax-exempt, then feminine hygiene products should be, too.”
I’ll let you be the judge on that one.
Moving on to (or rather, back to) dry cleaning, which apparently got this whole discussion started in the mid-90s, you would be not-so-surprised to learn that in an experiment CBS conducted in 2016 in New York City, they found that the female producer was charged twice as much as her male counterpart for a very similar, cotton shirt.
According to journalist Beth Kobliner, women are also quoted higher prices when purchasing cars or having them repaired, and pay more for car insurance compared to men with identical records.
Things don’t improve much in old age, either. According to the NYC report from 2015, canes were 12% more expensive when marketed to women than men, compression socks 4%, adult diapers 2%, and digestive health products 5%.
If your head is spinning from all the numbers, don’t fret. The list is not even close to being exhaustive, but the moral of the story is that women are paying more than men for most things.
What can be done
As old as pink tax is, legislative attempts have been (and continue to be) made to correct it. Almost always, it takes a multitude of attempts to earn any small success. For example, Congresswoman Speier, who was responsible for California’s Gender Tax Repeal Act of 1995, introduced the Pink Tax Repeal Act to Congress in 2016, 2018, 2019, and 2021, all to no avail.
There are local government offices where you can report price discrimination if you are in California, New York City or Miami-Dade county, and there have been international initiatives including this one by the United Nations to put an end to gender-based pricing.
Given the general speed and reach of these efforts, however, it looks like most of us would also need to be vigilant consumers, perhaps by remembering to compare prices and deliberately going for the blue instead of the pink packaging, or opting to wear a men’s shirt to work instead of the trusty ol’ blouse, or, maybe, and hear me out, by putting on a fake mustache (a mere $5 value) when going to the dry cleaner’s.
In the meantime, I’ll be over here, silently hoping to part with another small part of my ear to save $150…
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