Inflation hasn’t spared most Americans, but according to Ellevest Founder and CEO Sallie Krawcheck, it’s been particularly brutal for women.
“Everybody is hurt by inflation,” Krawcheck said on Yahoo Finance Live (video above). She explained that “because our wealth is only $0.32 to a white man’s dollar — for women of color, it’s pennies — inflation hurts everybody, but hurts women more. Women were hit by that, which hurts the pocketbook immediately.”
Ellevest’s new Women’s Financial Health Index found that due to inflation and low consumer confidence, the index dropped to “the lowest it has been in the last five years.” The index used a variety of metrics, including women’s employment rate, student debt, the Consumer Confidence Index, inflation, the gender pay gap, paid family leave, abortion access, corporate leadership, and venture capital funding for women.
“When you look at its performance over the past five years, women’s financial health took a big hit during the pandemic because they lost jobs at a disproportionate rate [and it] improved coming out of the pandemic as they were returning to the workforce, but this year has been tough,” Krawcheck said.
How Roe v. Wade 'affects the pocketbook'
The Consumer Price Index (CPI), a key measure of inflation, saw an annual increase of 8.3% in the month of August while the latest jobs report showed that the unemployment rate among women was 3.3% (though notably higher for Black women at 6.4%).
Some of the reasons why women lack confidence in their own financial resilience vary depending on age. For example, according to an Ellevest survey, Gen X and Baby Boomer (91%) women are more likely than Gen Z women (66%) to be worried about inflation, a recession (81% of Boomer women vs 45% of Gen Z women), and having to cut back on spending (76% of Boomer women vs 55% of Gen Z women).
Younger women appear to be more concerned about how political issues will affect their personal finances. Reproductive rights, job security, child care, and housing were among the most discussed in the survey.
“The other thing that women were hit by, which is an economic and financial issue, is the fall of Roe v. Wade, which might not affect them today, but the research is clear that it affects the pocketbook and keeps women in poverty and keeps women from achieving their full economic parity,” Krawcheck said.
Overall, women of all ages don’t feel adequately prepared for an economic recession.
“With the combination of that and consumer confidence falling and looking into recession, just 14% of women say they are financially prepared for a recession,” Krawcheck said. “It is worse for women financially by this measure, by the Ellevest Women’s Financial Health Index, than it has been in the past five years, worse than the pandemic.”
Consumers across the country have pulled back on spending due to inflation, including two-thirds of women, the Ellevest survey found. Still, these women haven’t pulled back on investing in their retirement portfolios — 75% of women are still doing so compared to 66% of men.
According to Krawcheck, “this is the time to continue to make your recurring deposits into your investments if you’re able to. This is the time not to panic and take the money out of your 401(k) or IRA if you’re able to.”
Adriana Belmonte is a reporter and editor covering politics and health care policy for Yahoo Finance. You can follow her on Twitter @adrianambells and reach her at email@example.com.