What is the Women’s Earning Institute?
The Women’s Earning Institute is dedicated to helping self-employed women and independent professionals overcome underearning. It specializes in understanding why women undersell themselves and provides women the tools and strategies to make more money and earn at their potential.
Mikelann Valterra, MA, founded the Institute in 2005, after nearly ten years of working with clients on their money issues. In 2004, she published her book Why Women Earn Less: How To Make What You’re ReallyWorth (Career Press).
The Women’s Earning Institute strives to help women:
- Identify underearning in their own life
- Process their emotions, beliefs and attitudes about money and earning
- Learn tools and strategies to make more money
The Women’s Earning Institute offers programs and trainings designed to help women uncover psychological blocks around money and earning, as well as offering specific tools and strategies to increase their earnings. From delving into the emotional side of money to teaching negotiation skills and how to increase your fees, Mikelann Valterra and the Women’s Earning Institute helps women transform their relationship to money and earn at their true potential.
Why this is an important issue
The Institute believes that looking at underearning in women is critical. Underearning is simply the pattern of not making enough money throughout one’s life. It is also about chronically earning below your potential. Because it does not seem as overtly harmful as debt and overspending, it has long been overlooked as the serious financial problem that it is. It is not an “in your face” financial crisis, like overwhelming debt or out of control finances, which is perhaps why it has been ignored for so long. But it affects women’s lives even more profoundly than these other behaviors. Because it can go unnoticed for so long, its effects compound to staggering proportions.
The Women’s Earning Institute continually marvels at the veil of secrecy and silence that surrounds underearning. Somehow underearning has escaped detection by financial experts, failed to excite the media, and never found a forum for public discussion. Perhaps it stems from our reticence to discuss money issues in public. In this age of full disclosure and talk shows that reveal our most intimate secrets, talking about money has survived as the last great cultural taboo. As a result, many money problems fester in secret. And when it is hard to talk about something with other people, it’s also hard to face it ourselves.
And as much as some women would like to avoid thinking about money, the reality is that they have no choice. Eighty to 90 percent of all women will be solely responsible for their own finances, at some point in their lives. This is due to the high divorce rate, which hovers between 50 and 60 percent, depending on what you read, and the shocking fact that the average age of widowhood for American women is 56. In fact, 9 out of 10 American women end their lives alone, through divorce, widowhood, or never marrying. So women must think about how to take care of themselves financially; inevitably, it will be all up to them.
We often hear women express concern about their economic futures. They wonder whether they will be able to afford housing, food, and medical care in their later years. Many are afraid that, once they retire, they will have to depend on relatives or government aid to get along. In some cases, this uncertainty can cause extreme anxiety; in fact, we’ve listened to more than one of our clients express her fear of becoming a bag lady, poor and homeless, destined to endlessly wander the streets asking for handouts to survive.
Even if this bag lady scenario seems a bit farfetched, it symbolizes a deep and predominant sense of economic insecurity in women-an insecurity that, unfortunately, is firmly rooted in reality. According to the Social Security Administration, more than 13% of elderly women live below the poverty line-almost twice that of men. And if we look at single elderly women (who are divorced, widowed, or never married), the poverty rate is 19%. That’s almost one in five! And countless more simply do not have enough money to live life as fully as they would wish.
Underearning affects us both now and in the future. When we underearn, we have less money to enjoy life, cover our necessities and save for the future. Not earning enough money, and hence not having enough money, prevents us from taking advantage of many opportunities. And of course, not having enough money leads to a host of stressful financial situations, from not having enough to pay the bills, to running up credit card debt.
Whether you are single or married, taking economic responsibility is an absolute necessity. And if you choose to temporarily leave the work force to raise a family, you may face an especially difficult challenge, for you must compensate for those years of lost earnings. When the effects of underearning are added to this loss of income, the results can be devastating. If you choose to stay home for a time, fulfilling your earning potential during the years you do bring home a paycheck plays an important role in your retirement years.
The Women’s Earning Institute exists to help self-employed women earn more, so they can enjoy life more in the present and feel a deeper sense of security about their future. Overcoming underearning is about self-created financial security. Many women hold the power to make more money, and the Women’s Earning Institute aims to help them unlock this power, whether it be through teaching them negotiation skills and how to increase their rates or helping them uncover the deeper, psychological roots of their own underearning. When women examine the often unconscious reasons that hold them back from making more, they clear the slate and emerge capable of earning at their true potential.
[back to top]
Definition of Underearning
Many self-employed women chronically earn less than they could, and they are tired and frustrated at their apparent inability to increase their earnings. This pattern of not making enough money, or consistently earning below their potential, is called “underearning,” and is a tragic waste of potential and possibility in the lives of thousands of women. Underearning happens when you repeatedly make less than you need or than would be helpful to you, usually despite your desire to make more money. Put another way, an underearner is someone who doesn’t get paid as much as might be expected, given her experience, education, training or results she obtains for her clients.
Underearning takes on many forms and can be as creative and varied as the underearner. While those on a salary may have a hard time asking for that long overdue raise, those who are self-employed might find it difficult to raise their fees, or set their fees high enough to begin with. Sometimes people give their time away by underbilling. Others underearn by using all their energy for volunteer activities, and in the process give away their skills and experience. And some people underearn by failing to market themselves-they do not make themselves visible enough.
It’s important to note that underearning can result from what one doesn’t do, which makes it more easily unnoticed, ignored, or forgotten. For example, many women do not have a career plan. And many women work very hard, and simply wait to be noticed, or hope they can grow by referrals alone. But the end result is the same: when women undersell themselves, the price they pay is very high.
Millions of women underearn-yet have no idea they are doing so. During the course of a working lifetime, this chronic underselling results in the loss of what most of us would consider a small fortune. In fact, current research shows that the average twenty-five-year-old woman will earn $523,000 less than her male counterpart over the next forty years, according to the Institute of Women’s Policy Research. Imagine-more than half a million dollars lost, never to be recouped! And while gender discrimination is alive and well, it can not explain away the entire pay gap.
Underearning will affect women deeply in the future. If you have spent a lifetime underearning, you will have less money when your earning years are over. Whether it’s social security compensation or your retirement accounts you have paid into, the bottom-line balance in any retirement plan will be significantly lessened by the fact that you earned less than you could have throughout your working life. Because of this, it is not unusual for a retired woman to find that her monthly income just isn’t enough to cover her needs. And although we may be tempted to think there will be someone there to care for us, statistically, this just isn’t true. Again, 80 to 90 percent of American women, at one time or another in their lives, become wholly responsible for their economic welfare.
It is imperative to conquer underearning. And it is possible to earn more! Women need to assess their own underearning history, look deeply at their own psychology, and learn the skills they need, such as negotiation and how to set and raise their fees, to make more money.
[back to top]
Relationship to Pay Equity Issues
Gender discrimination is alive and present in the American workplace. American women make 76 cents on the dollar, compared to their male counterparts. From outright discrimination to glass ceilings that make it hard for women to advance to the highest levels of business, there are few who argue that the gap in pay between men and women is due solely to the decisions that women make. Some employers do not promote women because they fear women will leave the workplace to have children, or will simply not focus on business as much as men, because of their family responsibilities. There is still an “old boy’s network” that makes it difficult for women to access the highest levels of business decision making. Self-employed women also struggle with access to markets and access to capital. These barriers to higher achievement must be eradicated. In an era where more women are graduating with 4 year degrees then men, women still make up a small minority in the board rooms and upper management circles of American companies.
However, the entire pay gap between men and women can never be explained away entirely by gender discrimination. For example, women do not negotiate as often, or for as much money, as men do. And study after study shows us that women pay themselves less money then they pay other people, even when they feel they do equal work to others. (This is particularly troublesome for self-employed women, who determine their own rates.) Pressures from family and child rearing enter the equation, as well as an often conflicted relationship to money, to begin with.
Some women come to self-employment to escape gender discrimination in the workplace. Others start their own business to have greater flexibility in their schedules, for personal and family reasons. And still others have a fabulous idea they want to see come to fruition. According to the National Women’s Business Council, there are an estimated 10.6 million women-owned businesses in the United States. In fact, majority-owned, privately-held women-owned firms account for 30 percent of all businesses in the United States. (An estimated one in eighteen women in the U.S. is a business owner.) Therefore, it is imperative that self-employed women address their earning issues and make enough money to live the lives they long to live.
The bottom line is that the reasons women make less money than men are varied and complicated, and anyone who claims to have a single answer has only studied the issue from one particular side or viewpoint. The good news is that there is a lot that women can do, as individuals, to raise their income. While it can feel overwhelming to work on pay equity issues in general, women can focus on the personal part they play in their own underearning. The Women’s Earning Institute focuses on this personal role that women play in “underearning”, with an aim to helping women understand their patterns and beliefs around money, and most important, helping them make more money.
There are many wonderful organizations dedicated to working on pay equity issues, for those who would like to be more involved in this important work. Many of these sites can be found on our resource page. A great organization is the American Association of University Women (www.aauw.org). There is also The Institute for Women’s Policy Research (www.iwpr.org). Catalyst (www.catalystwomen.org) is also a great organization, focused on helping companies recruit and retain talented female workers.
[back to top]
Personal Message From Mikelann Valterra
Why am I so passionate about underearning? Because in my work as a financial recovery counselor, I have seen it first hand. I’ve seen the effects of long-term underearning. Women come into my office in their sixties after a lifetime of not earning enough money, and they feel as if they have few options open to them. They fear the future and regret the past. It pains me greatly to see the loss of freedom that underearning represents for so many women. But I have also seen the possibilities that open up in women’s lives when underearning is conquered. Life expands and they are able to pursue opportunities. And when women start making enough money, they look forward to the future, and the comfort and security that await them.
Yet I continually marvel at the veil of secrecy and silence that surrounds underearning, despite how deeply it has permeated our culture. No one talks about the fact that so many women are not making enough money. No one talks about the chronic phenomena of always earning below our potential. We need to be honest with ourselves and tell the truth. When we shroud this issue in silence, women continue suffering financially in isolation. And this silence fuels the feelings of frustration that so many feel around money.
There is also a lot of shame that surrounds issues of money. It is as if we say to ourselves, “What is wrong with me that I can’t figure this out?” It is frustrating, because we know we are intelligent women. But why then, do we fall into self defeating patterns around money? The truth is that money issues go far beyond our intellect. Money taps into our deepest emotions and symbolizes what we fear, hope for and desire, in life. With such potent emotional baggage, is it any wonder that underearning is such a problem? Where does one even begin? How does one overcome underearning?
This is why I founded the Women’s Earning Institute. This Institute is dedicated to helping self-employed women and independent professionals overcome underearning. It specializes in understanding why women undersell themselves and provides women the tools to make more money and earn at their potential. I have personally witnessed countless women overcome their underearning and I believe that you can too.
It is my sincerest hope that the Women’s Earning Institute opens you up to the possibility of making more money, and gives you the tools to do so. Many women have overcome their underearning, and you can too. What would it be like if you removed money as a barrier to your dreams? Anything would be possible. And when we earn at our potential, we prove to ourselves that we are in control of our lives. There is nothing that compares to the feeling of self confidence and self reliance that making money provides us.
Mikelann Valterra, MA
The Women’s Earning Institute
[back to top] |
