In a nation grappling with financial obstacles, South African women not only face a persistent gender pay gap, but also contend with a concerning phenomenon known as the “pink tax”. The pink tax, while not an official levy, is a mark-up on certain goods marketed to women, such as toiletries and grooming products. Men pay less for similar products marketed to them.
Informal research conducted by personal finance website JustMoney.co.za in July 2023 lends credence to the existence of a pink tax, revealing a price discrepancy between gender-targeted products from the same brand, at the same retailer. Disposable razors for women, for example, cost R84.99, while the male version was priced at R42.95. Even-tone day cream for women (50ml) cost R179.95, while even-tone cream (R75ml) for men was R68.95. Straight-leg jeans cost R400 a pair for women and R350 for men.
Financial planner Sylvia Walker, author of Smartwoman: How to Gain Financial Independence and Create Wealth, notes that this does not necessarily indicate intentional price inflation by retailers. She emphasises that consumers have the power to choose more economical options, and decide on grooming expenditure.
Gender and finance
The pink tax underscores deeper issues around gender and finance. Women continue to earn less than men, as confirmed in a 2022 study by The Borgen Project. South Africa’s median gender pay gap is between 23% and 35%, exceeding the global average of 20%, the study found. Moreover, households headed by women are 40% poorer than those managed by men. There is also a far greater tax burden on single-earner households – a further blow, as 41.7% of children live with single mothers, versus 4.4% living with single fathers.
It is not surprising, then, that the annual DebtBusters Money-Stress Tracker 2023 Survey released last month revealed that four out of five female respondents experience financial stress.
Read a JustMoney article on handling finances as a single mom.
Necessities versus luxuries
A crucial point of debate around the pink tax centres on whether certain items are considered luxuries or necessities. Despite the South African government’s initiative to zero-tax rate menstrual pads in 2018, VAT is still levied on tampons, menstrual cups, and other related products. These levies disproportionately affect lower-income consumers, especially those relying on reusable options like menstrual cups.
Tips to take financial control
To mitigate the impact of the pink tax and other financial challenges, women can consider the following strategies this Women’s Month, and in the months ahead, says Shafeeka Anthony, Marketing Manager of JustMoney:
Shop around: Explore various retailers and seek special offers for sanitary products and toiletries.
Prioritise affordability: Be open to purchasing products traditionally marketed to men, or that are gender-neutral.
Buy in bulk: If the budget allows, stockpile essential items.
Female first: Consider getting quotes from companies that offer products for women specifically. However, don’t confine your search to these specialists. Get a quote from several companies and/or brokers and choose the one that suits your needs and budget.
Seek female-specific funding: If you are an aspiring entrepreneur, seek out funding vehicles aimed at women. Don’t restrict yourself to asking your bank for a business loan. Approach other institutions and government divisions that offer business finance to women.
Consider applying for a mortgage under your own name: Buying a home can be scary, but it can be managed if you stay within your means and take into account other costs that come with this investment.
Know where the money goes: Some women let their partners handle all financial matters. Don’t fall into this trap, as exiting the partnership will result in a very steep learning curve, at the least.
Educate yourself about personal finance: Find helpful articles on trusted websites such as JustMoney and subscribe to financial newsletters. Listen to podcasts and read personal finance books.
Plan for post-maternity leave: If you want to start earning an income again after taking a sabbatical or maternity leave, consider recruitment websites promoting flexible hours and work-life integration, such as RecruitMyMom. Alternatively, start your own business, or turn your hobby into an income.
Negotiate a raise: Prepare your case and develop negotiation tactics to help you succeed.
“Finally, focus on your retirement at every age,” advises Anthony. “Women face several challenges when it comes to putting away money for their mature years. They generally live longer than men, take time off for childbearing and raising children, have more caring responsibilities for elderly parents, and often earn less than their male counterparts.
“The persistence of the pink tax exacerbates these challenges. The result is that women save less, which limits their retirement funds,” she says. “If you start saving as soon as you start working, you will benefit from compound interest. Talk to a registered finance professional who can answer your questions and help you to plan for your needs now and in the future.”
