For Mother’s Day, I took Mum to see the movie Life of the Party, with Melissa McCarthy.  I loved it – but then I would watch Melissa open an envelope.  In the movie, just after they’ve dropped off the daughter at college, her husband drops a bombshell by asking for a divorce, and oh, by the way, he’s also selling the house since it’s in his name.  Apart from the emotional devastation, even worse, it puts her in a real predicament as she now finds herself with no home, no money, no job and no skills as, like many other women, she dropped out of college when she fell pregnant and had devoted her life to being a wife and raising a family.  Fortunately, she manages to go back to college - has an absolute blast in the process - and finishes her degree in archaeology (which, by the way, is a profession that pays peanuts, but that’s beside the point here). Unfortunately this is not the happy ending we usually see in real life!

My point is that women are, and have always been, more likely to experience poverty in midlife than men. I don't intend to create a gender war or sound like a raging feminist here,  I am just a single parent and a business woman who, through personal experience, knows what struggling to keep it all together is all about.  Fortunately I have had the benefit of a good education and I have decided to make it my purpose in life to share my knowledge, teaching others, particularly women, business skills so that avoiding poverty is something they never have to think about. The statistics are frightening.  According to the Sydney Morning Herald, 1 in every 3 women in Australia lives below the income poverty line.  The number of women over 50 who are couch-surfing, or sleeping in their car, has almost doubled in the past four years. More than 330,000 single women over 45 in Australia are living in conditions of serious economic stress. And their prospects are not good! Even if they are lucky enough to have a permanent job, their wages are likely to go down, not up, as they get older; their superannuation will not be enough to support them after they retire; and if they don't own their own home, it's highly unlikely they ever will! Statistics for the UK and the USA, are no different - this is a global issue.

It paints a very frightening picture indeed for single women as they age.

Most of it can be explained by the gender pay gap; the disproportionate amount of time women spend out of the workforce caring for children; the significant economic hit taken by women after a divorce; and the cumulative effect all this has on a woman's ability to achieve financial security as she gets older.

A 2017 article by the Sydney Morning Herald created this scenario based on statistics:

Andrew and Sophie graduate from university and start work in the same year, but Andrew earns around $48k a year and Sophie earns $40k.

They get married at 26, buy a small house and both work full time for another two years until Sophie gets pregnant. By that time, Andrew is earning around $20k a year more than Sophie so it seems to make sense for her to take time off work to look after the baby.

Ten years and two more children later, Sophie returns to work as a part-time receptionist. It's the only job she can get after 10 years out of the workforce that will still allow her to manage school-age children. She earns $25k a year.

Andrew has had several promotions and is now earning around $100k a year.

After another five years, Andrew and Sophie get divorced. They split the superannuation and house equally, Andrew buys a new home but Sophie can't get a mortgage for a house big enough for herself and her three children, so she rents and puts the rest of the money in the bank.

By the time they are both 55, Andrew has paid off his home and Sophie has had to spend most of the money she got in the divorce on living costs.

At 65 they both retire. Andrew owns his home and has a superannuation balance of around a $650k Sophie is still renting and only has $130k in super.

Andrew can afford a comfortable retirement, Sophie is living a precarious life in rental accommodation she can't afford and becomes one of the statistics of homeless women in Australia.

This is the data this scenario is based on:

Superannuation

The Association of Superannuation Funds of Australia calculates that a single person who owns his/her own home would need a superannuation balance of about $545k to retire at 65 and fund a comfortable lifestyle. The 2017 HILDA report shows the number of men and women who retired to live off their superannuation in the past five years to be about the same, but the average balance for men was about three times higher than for women.

According to the Australia Bureau of Statistics, the average superannuation balance in 2014, for men aged between 45 and 54 was nearly 70% higher than that for women of the same age ($151k and $90k respectively).

In the 55 to 64 age group, the difference was as high as nearly 80% ($321k and $180k).

Gender pay gap

The gender pay gap is usually calculated by comparing the average earnings of men and women working full time. This, however, ignores the gendered reality of most people's working lives.

• 40% of women with children under five are not in the workforce at all and of those who are working, a staggering figure of 62% are only working part-time!
• In contrast, only 9% of men with children under five are not in the workforce, and a mere 8% of the men who are working are doing so part-time.
• In 2014, the average weekly cash earning for men and women (both full-time and part-time workers) was $1,430 for men and $940 for women.
• Men in paid work are earning an average of 52% more than women.

To put it in perspective, on average, in Australia and New Zealand, women work for free from early November to New Year.

Divorce

There are around 110,000 registered marriages in Australia each year, and around 48,000 divorces. Nearly half these divorces involve children.

According to a study, by the AMP, of the economic outcome for men and women after divorce:

Divorced women with children spend 21% more on basic items than divorced men with children.

• Home ownership drops by 16% for women, but only 9% for men after divorce.
• Divorced women earn 10% less than married women of the same socio-economic background.
• Divorced fathers earn 26% more than married fathers of the same socio-economic background.
• 20% of newly divorced mothers as opposed to only 2% of newly divorced fathers can't afford school clothing, leisure activities, or school trips for their children.
• Super balances for divorced women are 70% less than for married women, but only 28% lower for divorced men compared with married men.

Statistics in the US and UK are no better, and let’s not even get started on what’s going on in the third world.  It’s an absolute disgrace!  Whilst governments are taking steps to try to help combat this major social issue, it is not enough. Much, much more needs to be done. We need to teach our daughters from an early age that they need to take care of themselves and educate themselves as much as possible.  Women need to take control of their financial future as much as they can, and understand that they need to care for themselves as much as they care for others. 

My mission is to help them do just that!

Full Article: https://www.linkedin.com/pulse/teach-woman-fish-angela-sedran/

Sedran, A. (2018, May 17). 1 in 3 women in Australia, the UK and the USA over 45 live below the poverty line - including professionals. Retrieved from
https://www.linkedin.com/pulse/teach-woman-fish-angela-sedran/