Women face a lot of financial hurdles – including, it seems, making too much money.
As much as they have worked to achieve equality and, specifically, equal pay, apparently, if married women go a small step further and earn more than their husbands do, a different set of issues arise. According to research from the U.S. Census Bureau, in such situations within different-sex couples, both spouses tend to fudge the numbers in favor of the man. Husbands, on average, wind up reporting to the Census earnings 2.9 percent higher than what appears on their tax filings. Meanwhile, wives undercut their wages by 1.5 percent.
The report attributes this phenomenon to Americans’ wanting to be considered “normal” by society’s standards. “The desire to view or present oneself in a positive light can lead survey respondents to over-report socially favored, and under-report socially disfavored, attitudes, circumstances, and behaviors,” the report says.
And when it comes to the incomes of heterosexual couples, the norm is for the man to earn more than the woman, although that dynamic is slowly shifting. According to a separate study from the Pew Research Center, the number of couples in which women earn more than men has gone from 12 percent in 1980 to 28 percent in 2017. Still, a man’s earning power is prized – and expected – more than that of a woman. The Pew report shows that 71 percent of Americans say that a “good husband” should be able to support a family financially while only 32 percent say the same about a “good wife.”
Even before marriage, stereotypical gender dynamics play out financially, as anyone who’s done the reach-for-the-check tango on a first date knows. The overwhelming majority, 91 percent, of women say that a man should insist on paying for the first date, according to a survey by dating service Match.com. Just 45 percent of women think it’s appropriate to split the bill.
Going against these norms can have a negative toll on marriages and women’s earnings overall. A 2015 University of Chicago study found that in hetero relationships in which the wife earns more than the husband, the couple is more likely to have discord and wind up divorcing. In order to avoid that outcome, the study says women are more likely to limit their earnings and never fulfill their full potential.
“Patriarchal norms remain alive and well in 2018,” says Sallie Krawcheck, founder of woman-centric digital financial advisor Ellevest. “It all comes down to the insight that women can’t win, can they? Earn less than men, and they lose out all the advantages money gives them – freedom, independence, a sense of confidence. Earn more, and both husband and wife seem to feel shame about it.”
Indeed, both men and women seem to prefer maintaining the status quo when it comes to breadwinning in a relationship. “A wife who earns more may feel pressured to protect her partner’s feelings about his own position in the household by inflating his monetary contributions since this would be the typical means through which a man might provide for a family, from a historical view,” says Megan Ford, a financial therapist at the University of Georgia and a former president of the Financial Therapy Association, a professional trade group for this emerging field of finance. “It doesn’t mean it’s wrong or right. It’s just a remnant of changing couples and families and a changing society.”
But even if you fudge the numbers on the Census, be sure you’re honest about earnings with your partner. Early on, being honest about your earning potential, so that it doesn’t come as a surprise when one spouse outearns the other, may help you avoid later strife that could lead to divorce. In fact, you ought to be forthcoming with your significant other on all financial matters in order to have a successful relationship. “Every relationship is a partnership, and we can only be financially healthy if we’re completely transparent,” says Nicole Mayer, a partner at financial services firm RPG Life Transition Specialists in Riverwoods Illinois.
Extend that honesty to your financial planner, too. “If you are going to try and improve your financial situation, it’s in your best interest to share everything with your financial planner,” says San Diego-based financial planner Taylor Schulte. “The output of a financial plan is only as good as the input.”
Also, you need to be more precise with your pay when it comes to potential employers. “If you downplay how much you make, it may hurt your ability to negotiate salary,” Mayer says.
She also points out that compensating for uneven compensation can create issues for women in retirement. For example, she says, a woman who earns more than her husband may feel inclined to cover all the household expenses, leaving the man greater opportunity to save more of his salary for retirement. “Then when a divorce happens, he’s got more money, even though she’s earned more,” she says. “They really need to be OK and secure that the woman may actually make more than the man, so they can understand how to work that into their retirement and financial plans, so that it’s equal.”