Women's Spending Power and How Companies Reach Them
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What macroeconomic and job-market headlines open this Money Briefing?
Here's your Money Briefing. I'm J.R. Whelan at The Wall Street Journal in New York. Women are earning more and more are going to college as compared to 30 years ago, and that means more women are the lead breadwinner in a household. But companies are still playing catch-up in terms of selling and marketing to women. We'll have details in a moment. First, some money and market news you should know. The Census Bureau says that American incomes remained virtually flat in 2018 after three straight years of growth. Median household income was $63,179 in 2018. That's an uptick of 0.9%, though the Census Board says that change qualifies as statistically insignificant from the prior year, based on figures adjusted for inflation.
Now, also last year, the poverty rate declined for the fourth consecutive year down to 11.8%.
How has women's educational attainment and workforce participation changed over 30 years?
It was the first time the official poverty rate fell significantly below the level where it was, at the start of the recession in 2007. And the number of job openings in the U.S. decreased by 3% in July from a year earlier.
Why is there limited research on spending by households where women are the top breadwinner?
That followed a 2% decrease in June. Still, however, the number of available jobs remains high. Job openings exceeded the number of unemployed Americans by 1.2 million in July. That's the 17th straight month that openings have outnumbered job seekers, and that's given workers confidence in looking for other jobs. The rate at which workers quit their jobs ticked up to 2.4 percent in July, after holding steady at 2.3 percent for 13 straight months. Job openings, by the way, peaked at 7.6 million last November, and they've decreased by about 400,000 since.
The fact that women's economic power has grown substantially in the past 30 years is not news. But how women spend and how companies market to them are factors still being determined. We've got Wall Street Journal Heard on the Street columnist Laura Foreman on the line with us to discuss. So Laura, the number of college-educated women in the workforce is growing. That translates to more women as the primary breadwinner in a family. Yet there's very little research on spending habits of women in that position.
We're seeing now more women enrolled in four-year colleges than men today, as well as a growing percentage of household income coming from women's earnings. And recent data shows wives are contributing roughly 26% of a family's income in 1980, and that number is well over 37% now.
How do working women's time pressures shift household spending toward e-commerce and services?
What's odd is that economist Michelle Meyer out of Maryland recently pointed out there's been surprisingly little research into spending patterns where these women are top earners.
But as the leading breadwinner, women have strong influence over how money is allocated in a household.
Right. So in 2011, there was an opinion piece, I believe, in the Wall Street Journal that talked about how women may not control the vast majority of spending, but they definitely have an increasing say in how that family's income will be allocated. In other words, areas in which it will be spent.
In what ways do single women’s spending patterns provide insight for marketers and investors?
An example I'd give would be child care. So as more women, of course, are working full time, more money is going to be allocated going forward to child care.
And women's growing stature in the workforce also has resulted in something of a cultural shift. And that's more time working during the week. And that's meant less time shopping in stores and doing things like chores around the house.
So data shows women are spending more time now working outside of the home and sleeping than doing things like chores and shopping. But obviously they, like everyone else, still need things. So we're looking for companies like e-commerce companies like Instacart and Amazon to be benefiting here and also outsourcing apps because, of course, things still need to get done around the house. So things like TaskRabbit or Handy should benefit too.
But when we look at single women in the workforce, more is known about their spending habits.
Because there's so little research on women's spending within married households, we're hoping we can look toward single women spending as a proxy, which is easier to get a read on because they're obviously just earning for themselves and reporting it as such.
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Chapters
6 chapters
1
What macroeconomic and job-market headlines open this Money Briefing?
0:05–0:56
2
How has women's educational attainment and workforce participation changed over 30 years?
0:56–1:09
3
Why is there limited research on spending by households where women are the top breadwinner?
1:09–2:37
4
How do working women's time pressures shift household spending toward e-commerce and services?
2:37–3:06
5
In what ways do single women’s spending patterns provide insight for marketers and investors?
3:06–4:22
6
How should companies rewrite marketing and product strategies to reach female lead earners?
4:22–6:05
Speakers
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