The Pink Tax

The Pink Tax is a new name for an old problem. It refers to the extra amount women are charged for certain products or services compared to what men are charged. This form of price discrimination involves companies selling almost identical products, such as razors, for more money when marketed specifically towards woman than when they are marketed towards men. But just exactly how much more money are we talking here? Recent studies have concluded that women pay almost $1400 a year more than men do for essentially the same products or services.

This shocking number mostly comes from price differences in several major areas: self care products, clothing, and services such as dry cleaning and, somewhat shockingly, vehicle repair. For example, a news program based in Atlanta compared the prices of self care items such as razors, shaving cream, face wash, and deodorant at various stores in the area. They found that some products, such as a five-pack of razors or a two-pack of deodorant, can cost up to $5 more for women simply because it is packaged and marketed towards them.

Clothing is another big area of price discrimination. Some of the biggest offenders currently are Club Monaco, Urban Outfitters, and Levi's, who charge an average of 28.9%, 24.6%, and 24.3% more respectively for women's items than men's. Old Navy also came under fire somewhat recently for charging $12 to $15 more for women's plus-sized jeans than regular women's jeans, but charged the same amount for men's jeans, whether plus-sized or not. The Pink Tax also applies to dry cleaning, where it costs about $2.09 more to dry clean a woman's shirt ($4.95) than a man's shirt ($2.86).

One aspect of the Pink Tax that didn't know about until researching it is that women often pay more for car repairs. Northwestern University conducted a study in 2013 that had both men and women call various vehicle repair shops and ask about the cost of fixing a broken radiator. Women who said that they were uninformed about how much a repair like that should cost were quoted an average of $20 more than men who made similar remarks. This is because repair shops often believe that women are on average less informed than men about the pricing of vehicle repair.

But if the Pink Tax is so obvious, then why does it continue to work? Why are women's products and services consistently higher then their male counterparts? According to Dr. Christopher Lemley, a marketing professor at Georgia State University, women are more willing to pay more for certain goods. Lemley also says that women "enjoy the shopping experience" and will spend more time "being lured by packaging and presentation." Personally, I don't think that women really have much of a choice when it comes to, literally, buying into the Pink Tax. While it is possible for women to avoid paying more for things like razors and shaving cream by simply buying men's products, they cannot help having to pay more for clothing items and dry cleaning.

So now what?

Well, we are making some progress on this issue. For example, under the Affordable Care Act, insurance companies can no longer charge women more for identical policies. Insurance must now also cover women's birth control (which, if you were wondering why this is a big deal, insurance used to cover Viagra but not the pill). California passed a gender pricing discrimination law that makes it illegal for companies to charge more for women's products when they are identical to men's. Violation of this law is punishable by a minimum fine of $1000. New York has also passed a similar law, but as of right now, these are the only two states to have outlawed the Pink Tax.