A Tax Women Are Paying On Almost Everything (Pink Tax)

Pink Tax

Whether you are purchasing a toy with your allowance as a child or a cane and compression socks at older ages, it is inexpensive being a man and expensive being a woman.

There was a study involving 800 products in 35 groups that individuals purchase through their lifetime.

This research was conducted by the New York City Department of Consumer Affairs and encompassed everything from baby clothes to facial care.

Products advertised to women were at a higher price than products advertised to men 42% of the time. A product for men will only cost more 8% of the time.

The study ends by adding up the differences in price, concluding women can spend thousands of dollars more than men during their lifetime.

There is nothing illegal about this as well. There are jurisdictions like New York that have laws about varying prices for similar services offered to men and women, but there is an absence of laws involving varying prices for similar products.

The report showed razors for women and even cartridges costing 11% more than men’s razors. Lotions advertised to men cost 11% less than lotions advertised to women. Deodorants and body washes remained more costly for women.

The biggest margins belonged to shampoo as men were paying averages of $5.68 per bottle, while women were paying $8.39, an astounding 48% increase.

Logically there is no excuse for this – both men’s and women’s shampoo use similar ingredients. There is a line of thinking with certain manufacturers saying men buy more razors which explains the higher price.

This logical assumption does not explain the price difference with shampoo, as women consistently use more.

The study ended with the conclusion that women are paying higher because of the costs associated to research and development, a primary expense for cosmetics companies.

The trend continues with clothing

The difference found by the Department of Consumer Affairs was convincing – and irritating.

On average, a helmet and knee pad advertised to girl’s costs 13% more than an identical product advertised to boys. The differences can be even larger on certain products, as this pink helmet costs almost double the blue one:

pnk-tax1

(New York City Department of Consumer Affairs)

This does not apply to just children, back braces used for men and women are practically identical, but interestingly…

…men’s brace’s use higher quantities of fabric. A brace for women is still priced at $4 higher:

pink-tax2

(New York City Department of Consumer Affairs)

There are laws in New York, California, Virginia and Washington DC that consider charging men and women different prices for similar services illegal.

The price should mirror a difference in labor costs. It’s acceptable to be charging higher to dry clean dress shirts with ruffles but unacceptable to be charging higher for women’s dress shirts overall.

Companies ignore these laws, and laws that stop merchants from charging women higher prices for similar products are non-existent.

Gender as an expensive social construct

There is a reason for why women’s products cost higher prices. The clothing for women has different cuts; a girls clothing may have costly trimming, examples like a ribbon, ruffle or glitter come to mind.

Companies selling razors have justified higher prices to women because of higher volume purchases from men, eventually leveling prices over time.

But there is a societal expectation for women to dress a specific way. Equating to economic terms, women have a higher return on investment when it comes to beauty.

While there is a surge in popularity for men’s beauty products, costly skin creams remain optional.

The reinforcement of socially constructed norms involving how women should be is more important than the fluctuations in your bank statement.

What is the worth of a Pink Tax?

Most pink colored products have higher costs than identical male counterparts. The price tag may show a difference of about 50 cents or a few dollars, but it accumulates to over a $1,300 a year.

Acceptable price differences do exits from time to time.

An example is the costs related to launder shirts, as women’s shirts require hand-pressing while men’s shirts can make do with industrial pressing due to the size differences.

Ways of combating the Pink Tax

Spot overpriced items

A report states that women spend more for cosmetic products and household items like razors, soap, pain medication and shaving cream. Clothes brought to dry cleaning is often subjected to gender pricing as well.

The main cost differentiator between male and female products involves packaging, design and the formula used.

There are cases where the item for both genders is exactly the same, up to the ingredients used, with small differences in the scent or features. Other cases show no differentiation beyond the label.

According to magazine Marie Claire, gender based price variations on clothing is widely accepted by retailers.

Either men or women could have higher prices depending on the specific item. The magazine discovered that dry cleaning charges could heavily disadvantage women.

Dry cleaning establishments make the case that women’s clothing requires more work.

Saving money as a female shopper is all about identifying the price differences. An awareness of price differentiation can help women do their part to avoid overpaying.

Purchase products from the Men’s aisle

The option to buy products from the men’s department instead of the overpriced women’s counterpart does exists if the product works the same way.

There is no need to buy a higher prices razor marketed to women if the razor from the men’s aisle works for you.

Most items affected by the pink tax may require observations in the men’s department.

Assuming fragrance does not really matter to you, the potential to save extra dollars by buying face cleansers and deodorants manufactured for men can add up over time.

Direct comparisons in price may not always be the answer, men’s and women’s items will come in varying sized. Understand the cost per ounce may reveal the true savings behind an item.

But if you prefer not to “smell like a dude”, unscented gender neutral items exist in the market. Certain men’s products may even have appealing scents.

Look for better deals

It is important to compare prices when you shop. If you are unsatisfied with the price tag in a specific shop, try looking at what the competition is charging.

It might take more work to constantly compare prices, which may often not be worth it when price differences come to a mere 40 or 60 cents.

Understand that you may replace soaps or shampoo’s from time to time but the differences in price can add up to a significant margin.

Purchase clothing that does not need dry cleaning

In a place like California, that has taken significant steps towards outlawing gender discrimination in business, you may still find yourself paying extra to get a ruffled shirt cleaned.

Attempt to buy a no-iron blouse or clothing that can be machine washable or even hand washable.

Women will also spend 25% more on average for a haircut. This even applies to haircuts that involve a similar amount of labor as a man’s style. Women will spend an astounding 48% more on haircare products as well. Women need to look for gender neutral alternative to save on costs.

Vehicle repairs

Northwestern university conducted a study that tasked men and women to contact different vehicle repair shops inquiring about the costs associated to having a radiator switched.

Women who acted less informed on a call were quoted $406 for a replacement that should amount to $365. Men who pretended to be equally clueless were quoted $383.

You can save on costs by researching enough before inquiring about car charges. This applies to both genders, as mechanics will take advantage of uninformed individuals equally.

What needs to be done?

A gender discrimination pricing law was passed in California a long time ago in 1996. A business proved to be charging women higher are accountable to a minimum fine of $1000. Based on history is seems like the law is rarely enforced.

The most promising way to circumvent any price discrimination is to simply research on actual costs and buy comparable men’s items.

Material and workmanship costs

Luxury level garments for women will definitely entail higher level handiwork, fabric and embellishment than garments for men. The requirement for more intricate materials and services will lead to more costly prices.

Brands will also manufacture more sizes, colors and iterations of an item in the women’s line compared to the men’s.

There are two levels of risk created.

The first level involves variations dividing production into smaller runs, which is less economically efficient.

The second level involves higher prices on more products in order to balance potential markdown risks related to carrying more stock keeping units (SKUs).

The problem is understand where in a company’s supply chain the extra pink tax is incurred – and determine whether the company or its factory is responsible.

A lack of internal accounting mechanisms for production makes it difficult to prove.

Tariffs on Gender

An actual tax may actually be responsible for the creation of a pink tax. The US and EU levies a tariff on specific groups of manufactured products depending on the gender of the potential user.

2014 witnessed 86% of US apparel imports being gender classified by the United States International Trade Commission.

A research conducted by Mosbacher Institute for Trade, Economics and Policy found that the average tariff rate on women’s clothing is 15.1% while the rate on men’s clothing is 11.9% in the US for the year 2015.

Based on the study, the tariff on silk shirts for women is 6 times more than the tariff on silk shirts for men. Swimwear for men on the other hand witnessed higher tariffs than swimwear for women.

Companies often factor tariffs into the costs of products before they get sold in retailers, which should bring more public outrage.

The abolishment of the pink tax?

The past few years has displayed a sudden shift in shopping habits exhibited by men, ending the age-old stereotype that men are uninterested in shopping.

The clothing worn by men is becoming flashier and technically intricate.

Men’s clothing has seen a rise in market share outpacing women’s clothing – men’s clothing increased in sales by 1.9% to $408.4 billion in 2015, compared to 1.6% increase in sales for women’s clothing to $625.9 billion – leading some to believe the gender price gap will become equal eventually.

The change is led by men involving themselves into fashion more and an increasing awareness of the issue.

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Martin - Head of Real Estate and Finance at RateTake
Martin is Head of Real Estate and Finance division at RateTake. He creates content that helps people understand and make the right decisions for their financial future.
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ratetake

Martin is Head of Real Estate and Finance division at RateTake. He creates content that helps people understand and make the right decisions for their financial future.