The higher cost of being a woman

Big brand retailers are confirming what consumers have been fearing for the past couple of months: tariffs imposed on goods from other countries are driving up prices. For women, this can mean additional costs that squeeze their spending power on products already marked higher simply because they’re made for and marketed to women.

Sometimes referred to as the “pink tax” or gender-specific pricing, a report in California demonstrated that women pay an average of $2,381 more per year for the same goods and services than men, which can add up to approximately $188,000 in additional expenses throughout a woman’s life.

“There is no reason a product marketed to women should cost more than a similar one to men,” said Sara Skipper, senior financial advisor at BOK Financial Advisors. But women need to budget and shop differently to handle the price difference, she added.

What women buy
So, what exactly is costing women more? A New York Consumer Affairs study revealed that, on average, across five industries, women’s products cost 7% more than similar products for men. Specifically:

Source: New York Consumer Affairs study

The price of beauty
Often more so than men, women purchase beauty and personal care products to maintain and enhance their appearance and to achieve a professional personal brand image. Many of those product brands source their ingredients and packaging from overseas, which means they will be subject to tariffs and thus higher prices.

So, couldn’t women do without? Is all the makeup and skincare really worth it? Probably more than you think. Not only is the way women present themselves linked to self-image, self-respect and self-care, but another recent study has revealed a striking link between physical attractiveness and career success.

The cost of dressing
One thing women can’t do without is clothing. Studies show that women drive 70-80% of all consumer spending, which is also an incentive for governments to set higher import taxes on their clothing.

Per an example from the U.S. Harmonized Tariff Schedule, a very complex rubric to assess the taxes, women’s silk underwear is taxed at 2.1% while men’s silk brief underwear is only taxed at 0.9%. In another category, overcoats are tariffed using a combination of price per kilogram plus an additional percentage. A women’s wool overcoat is taxed at 64.4 cents per kilogram plus an additional 18.8% compared to a men’s wool blend overcoat, which is taxed at a rate of 38.6 cents per kilogram plus an additional 10% of the value.

Currently, in the U.S., imported consumer goods are categorized and taxed by classification. Textile codes often dictate a higher tax rate for an item classified as a women’s article of clothing. With the U.S. being the largest importer of apparel, that difference across gender lines can be substantial. A study conducted by the Progressive Policy Institute is further evidence. They analyzed more than 700 clothing tariff lines and found that in 2022, the average tariff rates for women’s clothing were 16.7%, compared to 13.6% for men.

“The ‘pink tax’ demonstrates how gender stereotypes aren’t just social, they are also financial,” said Skipper who encourages women take control by being intentional about how they spend their money to send a message to brands on their pricing structure, “You, as a consumer, have the ability to show retailers how and where you want to spend your money, so be thoughtful and deliberate.”

Lower-income groups and women take the fall
The higher costs of consumer goods have an even greater impact on working women trying to build wealth, as they already face challenges such as lower pay, taking time out for caregiving and needing more saved for retirement due to longer lifespans.

While higher earners and more affluent individuals may be able to absorb some of the price increases, a study by the U.S International Trade Commission (ITC) found that tariffs disproportionately fall on both low-income groups and women. This further exacerbates the fact that American women are 35% more likely to be poor, and 69% of people working at or below minimum wage are women.

The pink tax hurts everyone
Tax inequality means women not only pay more at the register than men, but it also costs them in their ability to participate in the economy. Over time, those price increases compound to hurt women in the long run, not only in their ability to buy from and support businesses, but in their ability to save and invest.

“With the challenges women already face in building wealth, higher out-of-pocket costs mean women will have a harder time participating in the economy and must financially plan differently,” summarized Skipper.