Pink tax: Real or fictitious?
Business
What is Pink tax?
Pink tax or more appropriately, gender tax, refers to the broad tendency of goods and services marketed for women to be more expensive than those marketed for men, despite either gender’s choice.
Pink tax is not a tax that is levied on the products used by females, it is the extra price, the invisible cost that people using feminine products pay more for the seemingly same product.
Pink tax is real, not fictitious. It very much exists, in India and across the world.
US study across 794 products
In 2015, the New York City Department of Consumer Affairs conducted a study on the cost of being a female consumer across five industries, 24 stores, 91 brands and 794 products.
Conclusion: The cost of products marketed towards women is, on average, 7% higher than the products marketed towards men.
Specifically:
7% more for toys and accessories
4% more for children’s clothing
8% more for adult clothing
13% more for personal care products
8% more for senior/home health care products
Why the difference?
Some people argue that product differentiation can account for the difference in the prices of products. While some argue that since women are willing to spend more on grooming products and apparels, thus, pricing products higher becomes a marketing strategy of brands to make a bit more money off of women.
A counter argument to this is economies of scale. Since men’s products are made in higher quantities than women’s, the increased scale helps in evening out the price and keeping it lower.
A simple google search for men and women razors brings forward different prices for different razors.
Example:
Note: The images are just for descriptive purposes to indicate the difference. The prices for products can differ and be argued upon.
A normal blue razor meets women's shaving needs in the same manner a pink razor does. There is no add-on value to these products, so why is there a difference in prices?
Similarly, even women's deodorants are marked at a higher price than men. Not just goods, even services like salon services, dry cleaning etc charge higher rates for women than men. Even old age care for women is expensive. According to a study by the World Economic Forum, old age care for women is 8% more expensive.
Why is it problematic?
There has been no economic justification for such higher costs of production in goods. It only puts inadvertent financial pressure on one section of society.
The motivation for pink tax comes solely from a capitalist perspective, if you can make more money from something, make it. Social scientists believe that the ability of corporations to make more money from women-centric products comes from the fact that society holds women to a higher standard when it comes to their appearance.
Economic impact
The gender-based pay gap already puts women at a disadvantage with respect to purchasing power.
In the US, women make 89 cents for every USD 1 a man makes. In India, according to the Monster Salary Index (MSI) published in March 2019, women earn 19% less than men. The median gross hourly salary for men in India in 2018 was INR 242.49, while it was INR 196.3 for women.
Pink tax further intensifies the economic inequality between the two genders.
Taxes on feminine hygiene products
While Pink tax can’t specially be applied on menstrual sanitary products as it is used by one section of the society, it is important to see the underlying issue here. Menstrual sanitary products are a necessity for women, not a luxury or even an option, levying taxes on them is unfair. The “economics of menstruation” is involuntary.
After relentless efforts by activists, the Government of India, in 2018, removed the 12% GST on menstrual sanitary products.
First steps
While India has made progress in terms of making menstrual sanitary products tax free, a lot of countries still levy taxes on these products.
Society today has a long way to go in terms of treating men and women equally, especially economically. While discussion around the wage gap is slowly gaining momentum, the conversation around Pink Tax needs to gain momentum too. One important step towards this is a need for a similar study as conducted in the US to understand the price gap in the country.
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