Money Matters - Men vs Women through economic eyes

Monday 21 March 2011

Money Matters - Men vs Women through economic eyes


by David Rootsey
Port Douglas Branch Manager, Commonwealth Bank

Being a banker my whole working life makes me a strange individual, I am the type of person who enjoys numbers, stats, trends etc. So this month I’m going to indulge myself with a report that was issued this week by the Commonwealth Bank and the National Centre for Social and Economic Modelling (NATSEM).

The report called Viewpoint (nothing like The Newsport opinion pieces of the same name) focuses on the economic achievements, challenges and overall sentiment of Australian women.

Commonwealth Bank processes around 45% of Australia’s electronic transactions every day through our EFTPOS terminals, retail outlets, and through our credit card platform – collectively, this data paints an accurate picture of overall economic vitality, and what’s happening in the Australian economy at any point in time.
The report itself is 28 pages long with some fairly technical data and conclusions.

So here is a quick summary of the financial well-being of the Australian community.

1.    Across successive quarters, Commonwealth Bank consumer sentiment surveys have recorded consistently lower levels of economic optimism among women compared to men. In January 2011, 38% of men said the economy was ‘strong ‘compared to just 21% of women.

   The differences in gender sentiment and the factors influencing these may provide some insight into consumer spending patterns. Women tend to dominate retail spending, and given current spend levels are lower than trend, this may reflect the less positive perceptions of female shoppers.

In contrast, males typically account for a larger share of non-retail spending. Greater resilience evident in non-retail spending may reflect the more optimistic perceptions of male shoppers.

3.    Men enjoy 40 years of peak income-earning capacity – a period when their salary or wage income is at its highest – between the ages of 25 and 64. Women have just 20 such peak income earning years, from age 35 to 54.

4.    Many women have less confidence than men that they will have adequate resources to retire when they want to; 35% of men compared to 29% of women.

This lower confidence appears well founded, the differences in lifetime earnings between men and women generates large gulfs in financial wellbeing and asset accumulation: women have, on average, less than two-thirds of the superannuation balances of men on retirement.

5.    Amongst those with a partner, 73% of women rely on their partner at least partially for financial support, compared to 45% of men.

6.    Almost one in three (31%) families whose parents have returned to work use paid childcare, and among these parents, 11% say the fees paid for childcare outweigh their earnings.

For a further 13% of parents, the cost of care means they will only break even. Therefore one in four families with children in childcare works for no net financial gain (despite often receiving some form of government assistance).

7.    Women bear much of the responsibility for household money management, giving them day-by-day awareness of the household economy – something that profoundly influences their view of the national economy.

8.    In terms of job losses, women fared far better during the global financial crisis (GFC) than men. As the NATSEM report indicates, at the height of the turmoil women experienced fewer job losses than men. As the recovery process got underway though, employment levels for men recovered more quickly than for women.

9.    Both men and women claim that improvements in the labour market are a key factor that would boost their economic optimism

If you wish to read Issue 3 of Viewpoint, the whole report can be viewed here. I hope you have found it as interesting as I have reading the report.