Despite comprising about half of the U.S. workforce and earning more bachelor’s degrees than men, women continue to make 80.5 cents for every dollar men make, on average, according to the Institute for Women’s Policy Research (IWPR). Black and Hispanic women earn even less.
Financial wellness guru Farnoosh Torabi wants women to know they can help narrow that gap by advocating for themselves in the workplace. As host of the popular finance podcast “So Money,” Torabi helps arm women with the skills and confidence to do just that.
“I think women are increasingly putting up a good fight, which is exciting to see,” said Torabi, who is also a co-founder of Stacks House, a pop-up designed to inspire women to achieve financial independence. “We’re hearing more about women and men sharing their salaries, and there are many more discussions around how to effectively negotiate.”
Why do women earn less than men?
Although Torabi sees progress, research suggests women may face backlash or even jeopardize their professional success if they use the same script men do when negotiating for a raise. For example, the authors of a 2013 study, published in the journal Psychology of Women Quarterly, write that “other employees express an unwillingness to work with women who ask for higher salaries because they view them as less nice and too demanding.”
Many financial experts, including Torabi, suspect that’s one reason why women are reluctant to ask. In other cases, women may ask for more money but find they’re less successful than men at receiving higher pay, according to a June 2018 article in the Harvard Business Review.
“We are aware of these risks and it’s sometimes what prevents us from speaking up,” Torabi said.
How to get paid what you’re worth
Even in the face of these, women are hungry to earn more. An October 2018 survey by Charles Schwab revealed that, compared to young men, young women tend to equate success with financial independence. The findings, which researchers drew from 2,000 respondents ages 16 to 25, revealed that 78 percent of women said financial independence was a goal versus 71 percent of men.
A smart first step toward getting more money is figuring out if you’re being underpaid. While websites like payscale.com and comparably.com can tell you how your pay compares to the average salary in your industry, Torabi recommends another, perhaps unexpected strategy.
“Confide in male role models and colleagues, and ask them for feedback,” she said. “It’s not always easy or simple, but if there is a male colleague that you trust and you want to really gauge your pay equity, have an off-the-record conversation with him about what he makes or whether he thinks what you make is on par with your industry’s average.”
Another critical strategy is keeping a log of your achievements at work as they happen, said Torabi, who advised recording wins, such as strong hires you referred, sales revenue you assisted in generating, and new lines of business you played a role in developing.
“You have to be your biggest advocate,” she said, adding that you don’t need to wait until your annual review to discuss a salary change with your boss. “A sizeable raise typically doesn’t just arrive at your desk.”
Taking charge
Ultimately, you’re responsible for your financial wellness, said Torabi, explaining that’s what her mom taught her — and that philosophy is the best money advice she ever received.
“My mom once told me, when I was in college, that the only person who would ever bail me out of a financial mess would be me,” she said. “It wasn’t advice so much as a forewarning, and I’m not sure if she suspected I’d racked up a few thousand dollars in credit card debt at that point, but it was exactly the tough love parenting advice I needed to hear at that time in my life.
“It set me on a fast track to paying off my debt and vowing to never mess up my finances again … all to avoid the wrath of my mother!”
Melinda Carter, [email protected]