We’ve been seeing a lot of pink these past few weeks – the Barbie movie just hit theaters, out-performing box office expectations, by the way. Movie-goers went all out for their screenings, with many dressing up in fully pink outfits ranging from basic shorts and shirts to extravagant squad getups.
As someone who attended an opening night screening of Barbie (and wore a fantastic pink shirt that would have made Stereotypical Barbie proud), seeing the pink, predominantly-female audience made me think about something that Barbie herself even has to deal with – the Pink Tax.
The Pink Tax Explained
You’re probably familiar with what the Pink Tax is, but let me catch you up to speed. Ken buys a pair of blue rollerskates for $50 that are made for and marketed toward men, and Barbie buys the same pair of rollerskates, with the exception that they are pink, therefore made for and marketed toward women and pays $75. This is the Pink Tax.
According to Investopedia, a good definition of the Pink Tax is “a markup on goods and services marketed to women and for which men pay less for similar products and services.” Remember, the Pink Tax is not an actual government tax, nor does it mean that this is a tax that applies to physically pink items; it simply refers to price discrimination that inflates the cost of goods marketed to women.
Does the Pink Tax Actually Exist?
Yes, it really does exist. A New York City Department of Consumer Affairs study examined gender pricing in 794 comparable products and found that women’s products cost 7% more on average. The Pink Tax shows up in many places, from clothing to bike helmets, even extending beyond retail to higher quote prices for women than men at new-car dealerships. I’m sure Barbie paid more for her pink convertible than Ken would have.
Pink Tax Examples
The Pink Tax is very common in the following several product groups:
- Toys and Accessories – 7% Price Difference
- Children’s Clothing – 4% Price Difference
- Adult Clothing – 8% Price Difference
- Personal Care Products – 13% Price Difference
- Senior/Home Health Care Products – 8% Price Difference
The following chart is from the same study listed above, comparing the average price of women’s personal care products to men’s, resulting in an average 13% price difference in similar products.
The True Cost of the Pink Tax
A Business Insider article cites a 1994 study conducted by the California Assembly Office of Research, stating that women paid more than $1,300 extra per year because of the pink tax. If that money were invested for ten years and saw a return of 5 percent, it would add up to around $16,000. If $1,300 was put yearly into a similar fund, like the S&P 500, it would increase to roughly $160,000 in 40 years.
While paying 13% more for products marketed towards women may not seem like the end of the world, there is more at play here. Gender-based price discrimination on consumer items and services is only one part of a greater issue. One needs to remember that women are paid, on average, only 83.7% of what men are paid. Earning less affects purchasing power – lessened purchasing power coupled with gender-based price discrimination means fewer funds for women to put towards everything from necessities to retirement savings.
While Barbie may not have to worry about her financial future as she already has her DreamHouse and definitely maxes out her Roth IRA every year, paying 13% more for everyday products may be a factor in the lack of secure financial futures for many women in our country.