It hit me like a well-struck softball taking an odd bounce into a third baseman’s face. The FIRE movement will help narrow the gender pay gap over time.
Let me explain my logic on why ardent supporters of equality should embrace the FIRE movement to the fullest. I’ve been writing about FIRE since 2009, when Financial Samurai first started. As a pioneer of the modern day FIRE movement, we could be on to something new and great!
Why The FIRE Movement Will Create Income Equality For Women
When I removed myself from full-time work in 2012, my active income pay went from a $250,000 base salary to $0. I was a diligent worker who would readily work 60-70 hours a week to make more money. You did not want me as a competitor because I would consistently out-hustle my peers.
With one less male in the office, the income balance shifted slightly to female earners.
If my firm had filled my vacated position with a female worker, then the income balance would have tilted even more towards women in my office.
Alas, my firm didn’t replace me with a female worker. Instead, it eliminated my position and made my junior male colleague do more of the heavy lifting, just as I had suggested during my severance package negotiation.
But despite not replacing me with a female worker, the gender pay imbalance still lessened with me out of the equation. My junior male colleague was forced to do more work for less commensurate pay.
Now this may sound bad for my junior male colleague in the short-run. But in the long-run, me leaving provided him a fantastic opportunity to accelerate his career.
A Good Example
Take me as a typical example of the FIRE movement – a highly motivated male leaving full-time work during his rising income years. Multiply my example by the thousands, then perhaps millions and eventually, you get to female gender pay equality or even dominance!
When 53% of the workforce is made up of men, even if the percentage of men and women seek FIRE was the same, there would be more men on an absolute basis exiting the workforce than women. If the gender wage gap is true, this is a good thing.
Family Dynamics May Change For The Better Too
As more men FIRE to earn little-to-no money for the life of leisure, even more responsible men will FIRE to become stay-at-home dads.
Being a stay-at-home parent is one of the most important jobs in the world. But being a stay-at-home parent has so far been dominated by mothers.
As a result, women are the ones who’ve taken the biggest income and career hits because they’ve exchanged time in the workforce for the care of their children.
Biologically, this may make sense due to a woman’s ability to breastfeed. But from a financial and career perspective, this seems unfair, especially to single mothers who are forced to juggle everything.
Further, the pandemic has caused roughly 3 million women, many of whom are working mothers, to leave the workforce. The imbalance of childcare duties has been a tremendous problem.
The Parent Penalty
When my friend Kathy attempted to rejoin the workforce after eight years of being a stay at home mom, she could only find jobs paying her 65% of what she used to get.
Clearly, her situation is a hit to gender pay equality.
If stay-at-home dads decide to reenter the workforce years later, they too will face similar hits to income as their industries will have moved on without them. Due to globalization and technology, competition has only intensified over the years.
Not only will more stay-at-home dads narrow the gender pay gap, studies have shown there are plenty of other benefits of having fathers more present in their children’s lives.
Below are some of those benefits for children just having a father. Now imagine the benefits for children if fathers were also predominantly at home.
Stay-at-home dads could lead to better adjusted children, which in turn could result in a better functioning society down the road.
One Last Proactive Step To Take
Millions of men truncating their careers and their earnings to be free are important parts of the solution to narrowing the gender pay gap.
But there is still another integral part to the solution.
It is this: Men must also be the champions of women. Men must encourage women to work at higher paying jobs in higher paying industries. Men must encourage their partners to fight for pay increases and promotions. In addition, men must also be supportive of women going back to work after having children.
Taking time away from work, often uncompensated, to care for children is one of the biggest determinants of an employee’s total income. To overcome this shortfall, fathers must step up to their fatherly duties.
This means more cooking, more cleaning, more playing, more diaper changing, more putting kids to bed, being responsible for making doctors appointments and playdates, and much more.
By doing so, mothers will be able to rest easier knowing their childcare concerns are being addressed. They can then focus on grinding at work to climb up the corporate ladder and make more money.
Feeling Less Guilt To Focus On A Career
“As soon as I knew my husband was competent at changing diapers, bottle feeding, and performing the Heimlich maneuver, I felt better going back to work,” wrote Nancy, a Financial Samurai forum reader.
Having a stay-at-home father also helps ameliorate the guilt many mothers feel when deciding whether to go back to work.
“I could not get over my guilt of leaving my precious baby in the hands of a stranger, no matter how caring or experienced that stranger seemed. When my husband decided to put his career on pause for one year so I could pursue my career, my guilt declined drastically. I trust my husband more than anybody in the world,” said one mother I spoke to at the playground.
The decision between career or family has always gnawed at parents. But having a partner you trust and care for the most take care of your little one helps.
The FIRE Moment Will Help Achieve Pay Equality
The combination of more men leaving the workforce early and more mothers going back to work will ultimately make income equality a reality. In my opinion, once the ratio of stay-at-home-moms to stay-at-home-dads equals 50:50, we will have 100% gender pay parity.
Once the ratio is 50:50, there will be less inherent discrimination by employers towards women because they will now factor in that both men and women have an equal chance of leaving the work force to take care of children.
Without the FIRE movement, the lines from the chart above will intersect in about the year 2070 according to the long-term trend. With the FIRE movement, I can see gender pay parity by the year 2040 if not sooner.
Let’s encourage more men to retire early and more women to have longer and more lucrative careers. Together, we can make gender equality a reality in our lifetimes!
Readers, what do you think about the FIRE movement helping narrow the gender wage gap? What are some other big structural changes that can help narrow the gender wage gap? What are some of the other reasons why the gender wage gap exists? If you do not believe the gender wage gap exists, please explain why.