What is the pink tax?

Gender Inequality Researchers often point to what is known as the “pink tax”, a markup on goods and services marketed to women and for which men pay less for similar goods and services. Several years ago, the issue attracted a lot of attention when the New York City Department of Consumer Affairs uncovered numerous instances of gendered pricing when it reviewed 794 products sold in the city for consumers of all ages. ages. However, researchers have been noticing and analyzing this phenomenon since at least the 1990s.

Key points to remember

  • Academic studies, government studies, and women going about their daily lives have come across many instances of products marketed for women costing more than nearly identical products marketed for men – and far fewer examples to the contrary.
  • The pink tax is not an actual tax, but many clothing products designed for women have higher import tariffs than their male counterparts.
  • Hundreds of products and services have been found to have a pink tax.
  • A handful of states and local governments have regulations prohibiting price discrimination based on gender. The US federal government does not, although bills have been introduced.

Attempts to regulate the pink tax

When a company sells a pink product (the female version) at a higher price than a blue product (the male version), the additional revenue from the pink product does not go to the government. The only beneficiaries of the “pink tax” are companies that charge women more than men.

There “stamp taxon the other hand, is a true sales tax that many states impose on feminine hygiene products, a cost largely borne by menstruating girls and women (but also, in many cases, by their fathers or husbands). . This is a separate issue from the pink tax, and although it is related, we will not discuss it here. Nor does the pink tax refer to the cost of items such as lipstick and menstrual products that many women use and pay for throughout their lives, but most men don’t.

Several states have passed laws against discriminatory pricing of products and services based on gender. There has also been at least one attempt to pass such a law at the federal level. The aim is to regulate seemingly unfair price differentials. After all, women already earn less; why should they also pay more for equivalent products and services?

“Repeal the pink tax” is a marketing slogan. Gender-based price differentials are not a tax and therefore cannot be repealed.

California

In 1996, Governor Pete Wilson of California implemented the Gender Tax Repeal Act of 1995 requiring merchants to charge women and men the same price if a service required the same time, cost, and skill. It specifically targeted services such as haircuts, dry cleaning, clothing alterations, car repairs and other services, not products.

The author of the bill, MP Jackie Speier, told the Los Angeles Times that it was the first such state law. At the time, the term “gender tax” was used to describe this type of apparent price discrimination. An earlier version of the bill that also targeted products did not pass.

New York City

Similarly, in 1998, then-New York City Mayor Rudy Giuliani signed a bill to prevent retail establishments such as hairdressers and dry cleaners from basing prices solely on the sex. It allowed the city’s consumer department to collect fines from violators. Specifically, the law prohibits displaying discriminatory pricing, which means you shouldn’t see a sign that says “women’s haircut $45, men’s haircut $25” when you walk into a barber shop in New York. York.

New Yorkers can report gender-related price complaints through the city’s 311 website.

Miami Dade County

This Florida county’s gender price discrimination ordinance applies to both goods and services. The Miami-Dade County Department of Consumer Services is responsible for enforcing this local law, which applies to all types of sellers, from individuals to businesses. It prohibits price discrimination based solely on the gender of the customer, but allows price differences based on the time, difficulty or cost of providing a good or service. Complaints can be addressed in writing to the service. Injured parties may sue the offending party for damages, attorneys’ fees and court costs.

United States House of Representatives

Speier, who sponsored California’s 1995 law, also introduced pink tax repeal legislation at the federal level in 2016. The bill was introduced several times but did not pass. Its purpose is “to prohibit the pricing of consumer products and services that are substantially similar if those products or services are priced differently based on the gender of the persons for whose use the products are intended or marketed or for whom the services are provided or offered.” Companies violating the law would be considered to be in violation of the Federal Trade Commission rules on unfair or deceptive acts or practices affecting interstate commerce.

The Real Pink Tax: Unequal Tariffs on Women’s Products

Most pink tax talk isn’t about an actual tax, but in one case it is: importing prices. In the United States, clothing companies pay higher import duties on women’s items – such as silk shirts, woolen jackets, cotton suits, suit jackets, blazers, shoes leather and golf shoes – according to a study published by the Mosbacher Institute at Texas A&M University, which focuses on business, economics and public policy. On the men’s clothing side, import duties are higher on cotton shirts, woolen suits, synthetic fiber suits and swimwear. Some products have no gender-based price difference, while others have large differences. Overall, customs duties on women’s items are higher.

Clothing companies can remedy this discrepancy by increasing the price of the item with the higher import tariff, which can result in a price difference based on gender that is actually based on the cost of the item. . The other option is to set the same price for both items (assuming they are otherwise identical), which means the producer, retailer or consumer takes a hit. A 2007 lawsuit filed by apparel companies against the U.S. government tried, but failed, to eliminate these price differentials.

The price gap persists. A 2020 study published in the journal American journal of political science describes a study of 20 years of tariffs on men’s and women’s clothing in 167 countries. The authors of the study found that “imports of goods for women are on average taxed 0.7% more than imports of goods for men” and contribute to the pink tax. They also found that increasing women’s representation in legislatures could help address the problem.

“Governments can contribute to gender price discrimination through distinct tariff rates on…products that are substantially identical in form except for the gender of their intended consumer. Higher import taxes on female versions of products are in turn passed on to wholesalers, then retailers, and finally imposed on female consumers. —Timm Betz, David Fortunato, and Diana Z. O’Brien, “Descriptive Representation of Women and Gender-Based Import Tax Discrimination.”

Why Pink Tax Isn’t a $1,351 Problem

A 1994 analysis conducted for the law that the California Senate eventually passed as the Gender Tax Repeal Act of 1995 (AB 1100) found that women paid $1,351 more per year for similar products and services per year. relation to men. This 1994 figure is still widely quoted as if it were current. For example, the University of Missouri-Kansas City includes the figure in a short pink tax post, or #AxThePinkTax on social media.

It is highly unlikely that this figure is still accurate, and simply by adjusting it for inflation wouldn’t make it accurate either. Changes in product prices based on supply and demand, as well as campaigns to neutralize gender gaps, have certainly changed the amount since then. It is understandable, however, that no one has attempted to update the figure, as performing this type of calculation is a big undertaking. However, citing outdated estimates does women a disservice.

How does the pink tax work?

The pink tax is not a tax in the literal sense. It refers to how women pay more for the same or similar products and services than men.

Does the pink tax still exist?

Although the pink tax is not a real tax, it still exists. A few state and local governments have laws prohibiting price discrimination based on gender, but not the federal government.

What are examples of the pink tax?

Hundreds of products and services are subject to the so-called pink tax. Clothing, such as a pair of jeans, or services such as a haircut, are some common examples. Another example is children’s toys marketed to girls.

The essential

The pink tax may not be an actual tax, except in the case of disparate import tariffs on women’s clothing. But hundreds of products for women end up costing more than nearly identical products for men. There is clear evidence of gender-based price discrimination, although it is debatable why it exists or how serious or costly the problem is.

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