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Female Breadwinners Have Doubled, But Barriers Remain

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female breadwinners

female breadwinners

This Markets in a Minute chart is available as a poster.

The Rise of Female Breadwinners

Who is the higher income earner in your family?

Over time, the U.S. has seen a rise in female breadwinners. In fact, the proportion of women who earn more than their male partners has almost doubled since 1981.

Today’s Markets in a Minute chart–from New York Life Investments–illustrates the historical trajectory of women’s earning power, as well as systemic challenges women still face.

Then and Now: Gaining Ground

In the last 40 years, there has been considerable progress in both the percentage and number of female breadwinners.

 19811991200120112018
% Female Breadwinners16%21%24%28%29%
# Female Breadwinners4.1M6.5M8.1M8.8M9.6M

For families that had dual incomes, only 16% of households in 1981 had a female breadwinner. This was equal to about 4 million women across the country at the time.

Fast-forward to the present, and close to 10 million married, female breadwinners were part of the U.S. labor pool in 2018.

Breakthroughs Could Link to Education

Higher education rates and rising earning power are helping to decouple women from pre-existing financial stereotypes.

For married female breadwinners*, the impact of education often plays out as follows:

Education level
% of Women Earning Equal or More Than Partner
More education than partner49%
Same education as partner29%
Less education than partner20%

Source: Pew Research Center
*Over age 25

The odds of a woman earning the same or more than her partner skyrockets nearly 250% if she has more education, compared to if she has less education.

Interestingly, when it comes to career trajectories, women and men share similar decision-making rationales. Among surveyed women, 83% were more likely to delay having kids in order to advance their careers, compared to 79% of men. The primary reason: to help secure a stronger financial standing for their future children.

While it is clear that women have become a growing financial force over time, they still face many persistent challenges today.

A Chorus of Systemic Barriers

Women experience a litany of headwinds, both overt and subtle. What are some variables that continue to have a pervasive impact on women’s finances?

Media Bias
According to one study, 65% of media language directed towards women and their finances surrounded “excessive spending”. In contrast, 70% of language towards men discussed “making money” as a masculine ideal.

Financial Well-being
According to a global survey, 85% of women manage day-to-day expenses as much as or more than their spouse. However, 58% of women defer long-term financial and investment decisions to their husbands.

Gender Wage Gap
Based on the median salary for all men and women, women earn 79 cents for every dollar men make in 2019. The gap starts small and continues to grow as people age. How can women close the gap? The Georgetown Center on Education and the Workforce has some advice:

  • Get one more degree
  • Pick a high-paying college major, such as the STEM fields
  • Negotiate starting pay

If current earning trends continue, women will not receive equal pay until 2059.

Leadership Roles
While more women are in the workforce compared to previous generations, they tend to be in lower positions.

Women in S&P 500 Companies

RoleWomen's Representation in Role
CEOs5.8%
Top Earners11.0%
Board Seats21.2%
Executive/Senior-Level Officials and Managers26.5%
First/Mid-Level Officials and Managers36.9%
Total Employees44.7%

Why are there so few women CEOs? Men dominate management roles that influence the company’s bottom line, such as COO or sales. On the other hand, female executives typically fill roles in areas like human resources or legal—which rarely lead to a CEO appointment.

The Road Ahead

The last 40 years have shown immense progress, yet there is still plenty of room for further advancement.

Women belong in all places where decisions are being made… It shouldn’t be that women are the exception.

—Ruth Bader Ginsburg, U.S. Supreme Court Justice

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Markets in a Minute

Explainer: A Visual Introduction to Fed Tapering

Broadly speaking, Fed tapering is the reversal of quantitative easing. We show the history of Federal Reserve bond tapering and how it works.

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Fed Tapering

Explainer: A Visual Introduction to Fed Tapering

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The Federal Reserve began tapering its large-scale asset purchases in November 2021, a move likely influenced by:

  • Rising inflation
  • Improving unemployment
  • Strong U.S. GDP growth

More than $4 trillion in capital was injected into the economy through quantitative easing (QE), over the course of the pandemic, inflation is at 40-year highs, and unemployment levels hover below 4%.

As Fed policy responds to a recovering U.S. economy, this Markets in a Minute chart from New York Life Investments shows how Fed tapering works, and its impact on the economy.

How Fed Tapering Works

Fed tapering is the unwinding of the Federal Reserve’s large-scale asset purchases.

After the 2008 financial crisis, large scale asset purchases were introduced for the first time to inject liquidity into the market and help restore confidence. During the pandemic, they were introduced once more, at a rate of $120 billion per month.

Here’s how it works:

  1. The U.S. central bank buys government bonds typically in the form of Treasuries and mortgage-backed securities (MBS).
  2. This influx of demand leads to a rise in these bond prices and their yields (interest rates) fall.
  3. As this lowers the interest rate on the government bonds, what often follows is lower interest rates on loans for households and businesses.
  4. Lower rates stimulate spending.
  5. When the economy is running well, the bank may unwind asset purchases to help keep inflation low, otherwise known as Fed tapering.
  6. Notably, Fed tapering and QE is hotly debated among economists. Those in favor say QE is a critical tool for stimulating the economy. Those against say that it inflates asset prices and contributes to inequality.

    Inflation Levels

    The consumer price index (CPI) rose 7% in December, the highest rise since 1982.
    Fed Tapering

    Given this increase, Lawrence Summers, former U.S. Treasury Secretary and Jason Furman, former chief economist for President Obama say that the Fed didn’t taper soon enough. Other financial heavyweights suggest this is just the beginning of a hawkish approach to inflation.

    So how does Fed tapering impact inflation?

    By tapering asset purchases, the amount of money circulating in the economy that can be used to borrow to buy a house or car is reduced. According to this theory, when there is less spending, inflation will gradually cool down.

    Fed Tapering and Interest Rates

    The Federal Reserve has outlined that it will taper asset purchases before it increases targets on short-term interest rates. By current estimates, interest rates could rise in March.

    However, if the pandemic takes a turn for the worse, the Federal Reserve can shift direction. This gives the Fed time to assess how the market and economy will react before it raises rates.

    To prevent the taper tantrum of 2013, which led to market volatility and U.S. dollar appreciation, Federal Reserve chair Jerome Powell has stated that the Fed must carefully communicate the sequence of QE and tapering to prevent any fear in the market.

    When Doves Cry

    Like the 1940s, the rise in money growth over the pandemic has been driven by government deficits. By contrast, leading up to the 2008 Global Financial Crisis or during the 1950s and 60s, the private sector spurred loan growth.

    Monetary inflation can impact consumer prices and financial asset inflation.

    As CPI and financial markets have soared over the pandemic, investors will be watching closely to see how Fed tapering impacts future monetary policy.

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Markets in a Minute

Ranked: Real Estate Returns by Property Sector (2012-2021)

From residential to retail, are there patterns in real estate return on investment? We rank them by sector over the last decade to find out.

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Real Estate Return on Investment by Sector

For the ninth year in a row, Americans say real estate is the best long-term investment.

However, what might be less clear to the average investor are the different types of investments available within the real estate sector, and how they compare. Real estate return on investment within property sectors has historically been uneven, and 2021 was no exception. While residential property soared, office real estate has performed relatively poorly.

Are there any patterns in the top performers over time?

This Markets in a Minute from New York Life Investments ranks real estate return on investment by sector over the last decade.

Sector Returns Over Time

We used data from the National Association of Real Estate Investment Trusts to show real estate return on investment by year. A real estate investment trust is a company that owns, operates, or finances income-producing real estate.

Here’s how total returns stack up by property sector, sorted from highest to lowest return in 2021.

 2012201320142015201620172018201920202021
Self Storage19.9%9.5%31.4%40.7%-8.1%3.7%2.9%13.7%12.9%57.6%
Residential6.9%-5.4%40.0%17.1%4.5%6.6%3.1%30.9%-10.7%45.8%
Industrial31.3%7.4%21.0%2.6%30.7%20.6%-2.5%48.7%12.2%45.4%
Retail26.7%1.9%27.6%4.6%1.0%-4.8%-5.0%10.7%-25.2%41.9%
Diversified12.2%4.3%27.2%-0.5%10.3%-0.1%-12.5%24.1%-21.8%20.5%
Infrastructure29.9%4.8%20.2%3.7%10.0%35.4%7.0%42.0%7.3%18.6%
Timber37.1%7.9%8.6%-7.0%8.3%21.9%-32.0%42.0%10.3%16.4%
Mortgage19.9%-2.0%17.9%-8.9%22.9%19.8%-2.5%21.3%-18.8%14.7%
Office14.2%5.6%25.9%0.3%13.2%5.3%-14.5%31.4%-18.4%13.4%
Healthcare20.4%-7.1%33.3%-7.3%6.4%0.9%7.6%21.2%-9.9%7.7%
Lodging/Resorts12.5%27.2%32.5%-24.4%24.3%7.2%-12.8%15.7%-23.6%6.3%

Data for 2021 is as of November 30. Specialty and data center sectors are excluded as this data was only available from 2015 onwards.

Self Storage real estate was the best performing sector for the last two years, and also performed well during the 2015 market correction. It tends to perform well when people’s lives are disrupted, such as when they’re moving for a new job, schooling, or due to marriage or divorce. In the case of COVID-19, self storage got an extra boost from people wanting more space in their home amid remote work.

Timber and Industrial real estate have been in the top three performing sectors for at least half of the last decade. Industrial real estate, a category including properties that enable the production, storage, and distribution of goods, has seen increased demand due to the rise of e-commerce. One estimate says the U.S. could require an extra billion square feet of warehouse space by 2025.

On the other hand, the Lodging/Resort sector has frequently been one of the bottom performers. A form of discretionary spending, hotel stays may be one of the first expenses people cut when the economy is in a downturn. This weakness was compounded by lockdown restrictions during the COVID-19 pandemic.

What is a Good Return on Investment in Real Estate?

In light of the above data, investors may be wondering which sectors are “the best” to invest in.

The short answer: it depends. Here’s how real estate return on investment has varied within sectors, using the minimum, median, and maximum returns. We’ve sorted the data from the highest to lowest standard deviation, a measure of risk.

Real Estate Return on Investment

While Timber and Self Storage have delivered strong returns, they have also been relatively risky, with some of the widest variations in returns.

Industrials have seen the highest median return, and their risk is about middle of the pack. The second highest median return goes to the Mortgage sector, which earns income from the interest on mortgages and mortgage-backed securities. The mortgage sector has seen less risk than most other real estate categories, at least in the last decade.

For investors with a lower risk tolerance, Infrastructure may be a sector to consider. These properties had a positive return on investment for all of the last 10 years, and had the lowest risk of any property sector.

Patterns Within Real Estate Return on Investment

By looking at historical patterns, investors can consider how economic conditions may affect real estate return on investment.

Sectors associated with discretionary spending, such as Retail and Lodging, have tended to perform poorly during downturns. On the other hand, Self Storage and Residential properties have historically been more resilient during the 2015 selloff and the COVID-19 pandemic.

Future trends may also offer food for thought. For example, as the population ages and the government puts an increased focus on critical facilities, could the Healthcare and Infrastructure sectors be poised for growth?

Whichever sector(s) an investor focuses in on, real estate serves as an alternative investment that can help diversify any portfolio.

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