The Pink Tax: The Premium on Female Health
You might have noticed the steady stream of media coverage on the Australian government’s new ‘Pink Tax’.
Female health products are not considered ‘necessity items’ like sunscreen, nicotine patches and condoms, instead falling into the ‘luxury items’ category and attracting GST margins. Cue public backlash.
True to character, the Minister for Women and Prime Minister Tony Abbott responded: “I understand that there has long been a push to take the GST off goods which are one way or another regarded as health products. It’s certainly not something that this government has a plan to do.”
Using sanitary items is not optional for a lot of Australian women, which begs the question: What else do women pay a premium for?
Australian women earn an average 18.8% less than men. Not only that, but marketers often attach a premium price to ‘feminine’ products. Underpaid and overcharged.
Gender marketing is alive and well in the modern market place. Why do companies price women’s products higher than men’s? The answer is simple, because they can, and the sales statistics prove it. For the most part, the origins of the ‘pink tax’ boil down to rudimentary economics.
You have two razors – they’re functionally identical, except one is blue and one is pink. The other difference is the higher price tag on the pink razor. You would expect – in a market where we assume rationality – that a utility-maximising consumer would opt for the cheaper alternative when presented with two functionally identical items. You would think. But once you involve marketing – particularly marketing that plays on the sensibilities of different sexes – we realise that theory does not equal practice.
Companies have tested the demand and price sensitivity of female products, finding that women are willing to pay more for experiential and symbolic value, where product packaging is often the key. It’s good news for a business’s bottom line. Women are easily targeted victims of gender marketing. Premium prices force women to fork out more money, particularly if there are no viable and more affordable alternatives.
Earlier this year, the ACCC took drug manufacturer Reckitt Benckiser (AKA the producers of Neurofen) to the Federal Court, alleging that Neurofen’s claims that their pills targeted specific sources of pain intentionally misled consumers. Neurofen’s range of period pain products contained the same amount of Ibuprofen Iysine as their regular, cheaper, range. In short; same product, different wrapper. Women experiencing period pain were held hostage and deceitfully misinformed by Neurofen.
Disappointing as it is, women will continue to pay more for products if their market prices remain higher. The following video shows how tampons would be marketed if men had their monthly (hint: MANpons designed by NASA).
What can be done? Will anything be done?
Perception is everything and gender marketing has deep roots in Australian culture. Whilst the product may perform exactly the same function, the symbolic meaning inherent in a pink razor with daisies on the packaging allow companies to charge a premium.
Unfortunately, whether or not the ‘pink tax’ will be eradicated is at the mercy of politics and power – two invisible hands notoriously resistant to change. Cutting GST and regulating gender price discrimination means both companies and the government lose out on revenue, meaning it probably won’t happen (grim, but reality). For now that means ‘luxury’ items will not only be charged GST, but the days of stereotyped products and discriminatory pricing are far from over.