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Everyone pays the 'pink tax' — whether you know it or not

The gender-specific premium put on products marketed toward women impacts the whole economy. Here are ways to fight discriminatory pricing amid the lingering she-cession.
A woman shops for feminine hygiene products.
A woman shops for feminine hygiene products.zoranm / Getty Images

Just because you don’t buy jasmine breeze deodorant or BIC women’s razors doesn’t mean you don’t pay the “pink tax.” When most people hear this term, they think about the price differences between gendered items, such as a blue toiletry kit and a pink one.

What they don’t think about are the various manifestations of the “pink tax” and how it impacts everyone, not only women. Because that’s the thing about gender inequity. It’s not a “me” problem, it’s a “we” problem. One that’s exacerbated during this period of record inflation.

More than what meets the eye

You won’t find the “pink tax” on your store receipt, tax return or the revenue section of the government’s financial statement. That’s because, unlike income tax or corporate tax, the government doesn’t explicitly levy the “pink tax.” The federal government does, however, allow it to exist. So when you see Levi’s 501 CT jeans priced at $68 for men and $88 for women, you’re seeing the pink tax in action.

This pricing phenomenon applies to a wide range of goods and services, not only clothing. If a brand can pink it or shrink it, then there’s a good chance that product carries an inflated price. In fact, the New York City Department of Consumer Affairs analyzed 800 products across 90 brands and found that 86 percent of categories charged more for women’s items than men’s.

For example, girls’ toys cost more than boys’ toys 55 percent of the time, women’s clothing cost more than men’s clothing 40 percent of the time, and women’s senior health products cost more than men’s 45 percent of the time.

The “pink tax” is part of a family of gender-inequitable taxes

A close cousin to the “pink tax” is the “tampon tax.” Again, you won’t find this tax on your Target receipt. But you will feel it at the checkout when you see your menstrual hygiene products classified as luxury items and thus slapped with a 4.7 percent to 9.9 percent sales tax depending on the state. (Yes, people who menstruate generate revenue for the government simply by attending to a basic bodily function.)

Currently 23 states classify menstrual hygiene products as nonessential goods. The “tampon tax” is one reason why, of the nearly 17 million people in the U.S. who menstruate and live in poverty, two-thirds cannot afford menstrual products. These aren’t trivial splurges. The average woman will spend $6,360 on menstrual hygiene products over the course of her reproductive years. In the midst of this lingering she-cession, 35 percent of Black, 36 percent of Hispanic, and 23 percent of White people who menstruate struggle to afford period products.

Another cousin in this family is the “makeup tax,” or the barefaced expectation that women never leave the house with, well, a bare face. Society penalizes women for both compliance and noncompliance to this beauty standard. Comply and spend an average of $15,000 over your lifetime on makeup, plus approximately two weeks per year applying it. Fail to comply and the labor market will punish you for not being attractive enough.

Where does the “pink tax” come from?

The price differentials between gendered items come, in part, from import taxes. Each foreign good is assigned a category when it enters the country. Every category is assigned a tax rate, and some categories use gender to classify merchandise. Men’s apparel receives an average 11.9 percent import tax while women’s apparel receives an average 15.1 percent import tax.

As a result, women are more likely to pay higher prices for their clothing than men because businesses frequently pass import taxes onto consumers. In 2015, U.S. consumers paid $2.77 billion more for women’s clothing than men’s due to gendered import taxes.

Couple that with the current inflation and you'll how the prices of goods and services targeted specifically to women have shot up twice as fast as those targeted to men.

This is happening against the backdrop of a she-cession that wiped out 29 years of hard-earned progress toward gender equity in the labor market. If we included the 1.17 million women missing from the labor market since the start of the pandemic, women’s real unemployment rate would be 4.6 percent. For Latinas it would be 7.1 percent and for Black women, it would be 7.6 percent.

The past year has also witnessed the widening of the gender pay gap for mothers and women of color.

Everyone pays the “pink tax”

Women not only have less money coming into their wallets because of pay inequity, they also have more money leaving their wallets because of this gendered tax. And while women directly bear the brunt of this cost, everyone indirectly pays the price for gender-based inequity. That’s the way the economy works.

When we weaken women’s economic power, we weaken their ability to provide for themselves and their households. When people cannot meet their basic needs, they turn to taxpayer-funded public assistance programs to survive. Before the pandemic almost 22 percent of families across the country depended on these types of programs. Of these households, half were one-parent families headed by women. Moreover, 58 percent of SNAP households are headed by a single adult, and 92 percent of those households are headed by women.

This is particularly concerning because since 1982, more than half of Black U.S. households with children have been headed by breadwinner moms. Black breadwinner moms have the most egregious gender pay gap of any group of women in the labor force. They earn just 44 cents for every dollar earned by breadwinner dads. In other words, our future entrepreneurs, policy makers, and essential workers who live in households headed by breadwinner moms have become the collateral damage of inequity.

Our economy needs more women in politics

Closing this gender inequity would expand the economy by $3.1 trillion. One way to chip away at the gap is to eliminate the “pink tax.” Some states such as California and New York have already passed legislation prohibiting gender-based markups. Now we need federal protections for gender-inclusive pricing. Increasing the number of women in politics can help us move in this direction.

While today we have the most gender-balanced Congress in history, there’s still has a 24-point gender gap. Political inequity drains the economy, and not just because women are proven to be more effective legislators than men. It’s also because women politicians provide the lived experiences that inform inclusive policy creation, such as policies to end these biased tax structures.

One step we can take today to close the political gender gap is to urge party leaders to tap into local school boards for candidates, where women are 43 percent of board members. Another step we can take is to support existing organizations that light the way for women in politics, like Emily’s List, She Should Run, and Vote Run Lead.

As we head into the 2022 midterms, let’s remember that gender equity benefits everyone. So when it comes to the “pink tax,” it’s in everyone’s best interest to eliminate it.

Katica Roy is a gender economist and the CEO and founder of Denver-based Pipeline, an award-winning SaaS company that leverages artificial intelligence to identify and drive economic gains through gender equity. Pipeline launched the first gender equity app on Salesforce's AppExchange. The Pipeline platform was named one of TIME Magazine’s Best Inventions of 2019, Fast Company’s 2020 World’s Most Innovative Companies, Fast Company’s 2021 Next Big Things in Tech and in Fast Company’s 2022 World Changing Ideas. In 2020, Katica was named the Colorado Entrepreneur of the Year. She also serves on Fast Company’s Impact Council and Bloomberg’s New Economy Forum’s Trade Council.