Closing The Gap

Women live paycheck to paycheck roughly 5 times as often as men—here's why

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Crystal Sing | Twenty20

Almost half of Americans say they live paycheck to paycheck. But women are roughly five times more likely to say they fall into this cycle than men.

Of the 43% of Americans who say they live paycheck to paycheck, 85% are women, according to a new poll from insurance and employee benefits provider MetLife of over 8,000 U.S. adults over the age of 18.

This trend is driven by a "a perfect storm of factors," Loi Stoddard-Graham, MetLife's vice president of planning and business development, tells CNBC Make It. The pay disparity between men and women certainly plays a major role, Stoddard-Graham says.

While there is a "sizable pay gap," the disparity goes beyond just the fact that women are paid less than men for comparable jobs, Elise Gould, senior economist with the nonpartisan think tank the Economic Policy Institute, tells Make It. Women's lower lifetime earnings can be attributed to the fact that the occupations that women enter tend to be paid less than fields that are traditionally male-dominated.

Because women are more likely to work in minimum-wage and lower-income occupations than men, they may also face more erratic schedules that could lead to a less stable paycheck. Plus, the positions men take are also generally more likely to evolve into manager and executive roles. "That leads to lifetime earnings being lower and savings being lower," Gould says.

Click to expand the chart.

Women carry more responsibility

The reason so many women face economic instability is tied to more than just pay. Stoddard-Graham says that women often carry more responsibility when it comes to caring for their loved ones and extended families, for example.

"There's what's happening in the labor market and then there's what's happening at home," Gould says. Research shows that women disproportionately take on more household responsibilities, even when there are no kids in the household, she says. And many women are forced to take time out of the workforce because they can't afford child care costs. That, studies have shown, hits women's careers and lifetime earning potential.

"Not having paid parental leave or affordable, high-quality child care is a disproportionate burden on mothers and therefore a disproportionate burden on women," Gould says.

Another reason for the stark difference in answers between men and women could be how the question is interpreted and how secure people feel financially when answering. "Women may feel more secure with more savings, and therefore they feel they live paycheck to paycheck," Gould says. MetLife's research generally found that women feel less in control of their finances than men and fewer women feel on track to achieve their financial goals.

Breaking free of the cycle

The common step financial experts recommend people take to break the paycheck to paycheck cycle is to build up an emergency fund. But that's easier said than done for many American families.

About one in four respondents to MetLife's survey say they have three months of living expenses saved. Overall, about four in 10 American households would not be able to cover an unexpected $400 expense with cash, savings or a credit card, according to a Federal Reserve report. About 12% of Americans say they would not be able to cover the expense at all.

This comes at a time when middle class life is now 30% more expensive than it was 20 years ago and the average American paycheck doesn't stretch as far, according to Pew Research.

Americans also generally have less help from safety nets and their employers. Most workers no longer have access to the pensions a lot of their parents and grandparents relied on, and health care costs are increasingly expensive and often unpredictable.

Instead of pushing the responsibility on Americans to individually come up with the money, Gould suggests structural changes are needed, not only to help women, but all Americans. Workers need more leverage so they can have higher wages, Gould says, as well as building better health care options so that people aren't impoverished by their health needs.

"Then they can be more economically secure and might actually be able to save," Gould says.

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