There exists eminent gender discrimination against women in society for centuries. Even in the 21st Century, there exists discrimination against women by way of payment of wages, opportunities, education, and sometimes even in their own house when it comes to decision-making. It is imperative to note that studies have shown that women undertake 66% of the world’s labor, yet do not manage to earn more than 10%. One such alleged discrimination that has been brought to light is termed as ‘pink tax’. The pink tax is the alleged extra price that women have to pay for similar products to that of men. It is true that while the price of the necessary products for women, such as shampoos, razors, body wash, perfumes, etc., are more than that of men, it must be kept in mind that the only reason for the price difference is (a) the choice of women and (b) the fact that the products are similar and not the same. When the question of tax on sanitary pads and tampons is considered, it is the tampon tax that is applicable and not the pink tax, and the same has been banned in various countries. This means that women’s products are designed and produced to suit their needs. Here, the market is just adhering to the principle of demand and supply.
PINK TAX IN THE MARKET
A pink tax usually establishes a distinction between male and female products. Pink tax, taken more broadly, is simply the additional cost a woman must pay to purchase a good designed especially for her.
‘Pink Tax’ refers to the notion that the prices for female and male products are different for similar products. For example – women’s razors are priced more than men’s. A study, named Gender-based Stereotyping and Cost Discrepancies for Razors conducted by Michelle J. Chang and Shari R. Lipne concluded that women’s four-blade razor is 66% higher than men’s four-blade razor. It is imperative to note that the pink tax is not a government-imposed tax, i.e., it is not a real tax. It is just another revenue-generating source that is adopted by the producers. Thus, the benefit received by the pink tax is only for the company and not the Government.
BAN ON PINK TAX: LEGISLATION ANALYSIS
The Governments of California and New York have imposed a ban on the pink tax. California’s Gender Tax Repeal Act of 1995 prohibits companies to price similar products differently solely on the grounds of gender. Nonetheless, the legislation allows the companies to set varying prices based specifically on the amount of time, difficulty, or cost of providing services. However, on January 1st, 2023, owing to the inefficiency of the above-mentioned Act, a law was passed stating that California businesses were prohibited from charging different prices for products that are substantially similar.
However, just like in the 2022 law, does not prohibit different prices for products for which:
- “The amount of time it took to manufacture those goods
- The cost incurred in manufacturing those goods
- The difficulty in manufacturing those goods
- The labor used in manufacturing those goods
- The materials used in manufacturing those goods
- Any other gender-neutral reason for charging a different price for those goods.”
New York has also prohibited pink tax from September 30, 2020, and it doesn’t prohibit price differences in goods or services on the same grounds as that of California’s
In the study named “Investigating the Pink Tax: Evidence against a Systematic Price Premium for Women in CPG”, the prices of personal care products such as shampoos, perfumes, deodorants, etc., of both men and women were compared. It was observed in the study that out of nine products, four products – bar soap, deodorants, body wash, and razor blades for women were priced higher than men’s products. However, it is so, because of the appearance and content that is used to produce products for men and women. The same study also observes that product differentiation is what result in the difference in prices of products for men and women. Thus, when the product itself is different, compelling the producers to charge the same prices would be unfair. The study further states that the Pink Tax Repeal Act, introduced in 2015, bans price differences for substantially similar products with no proper grounds to evaluate the similarities. Thus, women’s deodorants are priced higher than men’s solely because they contain different products, which gives rise to different costs of production and thereby cannot be termed as gender-discriminating prices.
Apart from this, the California Chamber of Commerce gave a fresh perspective that the ban on pink tax is nothing but a Job Killer which attracts unnecessary litigation costs for products that claim to be substantially similar, but are two different products with two different formulas.
Before unveiling the economic perspective of pink tax or price differentiation between men’s and women’s products, it is prime to note that the study conducted by the New York Department of Consumer Affairs, titled From Cradle to Crane: The Cost of Being a Female Consumer. Observed that women’s products cost more than 42 percent of the time while men’s products cost more than 18 percent of the time.
However, in Investigating the Pink Tax: Evidence against a Systematic Price Premium for Women in CPG the study reflects that in personal care products, women pay higher prices for Soap bars, deodorants, body wash, and razor blades; men spend more for hair colouring, disposable and non-disposable razors, and shaving cream. Thus, from the above substantiation it is proved that products are priced according to the formulas and products used, which forms a rational and valid ground for price differentiation.
The products of men and women are different because they use different products and formulas in their production. For example, women’s razor comes with moisturizing oil, and soft ends, and also consists of attractive packaging. These add up to the cost of production of the company. Hence, it is completely justified for the company to price higher than the men’s product.
Different categories of people opt for different products which will give them maximum utility and thus create a demand for that particular product in the market. Further, the companies try to match the demand in the market by supplying the demanded products. Thus, it is true that women pay more for products because they demand specifically for them. For example – Women are willing to pay more for certain perfumes because they have a strong preference for how it smells.
It is well established that the product’s value is derived from payout. It is well observed that despite the product/service offered being similar, the emotional utility derived by both groups is different. Thus, women have a wider range of products for varied prices. It provides a bigger basket for the women to choose from. This is due to consumption choice which is in turn driven by their emotional satisfaction from different products. The other products that are of utmost necessity for women are female hygiene products, such as tampons, sanitary pads, etc.
TAMPON TAX & PINK TAX
The Tampon tax is the tax levied on the menstrual product. The tampon tax, also known as the period tax is the reason behind the skyrocketing of these products. This situation eventually creates period poverty where many girls/women are not able to afford the necessary items. However, it has to be noted that the pink tax and tampon tax are not the same since the one is not a real tax whereas, the latter is a tax imposed by the Government on female hygiene products.
The society that we live in is majorly driven by private owners, making it a capitalist economy. In such an economy, the demand and supply set the prices of the products. The motive behind the ban on the pink tax is that it creates an extra burden on women which leads to the casting down of women’s position. However, it is arguable that if the motive is to uplift women, then the market system should be changed from a capitalist to a socialist economy. Apart from this, the production of more gender-neutral products can bring down the prices which can ultimately remove the false notion of gender pricing. It is further emphasised that higher pricing of female products cannot be termed as a pink tax is not a real tax and it does not amount to gender discrimination mainly because the products are different in terms of formula, raw material, time, other items which adds up to companies the cost of production. The economic phenomenon of price differentiation makes it justifiable for companies to exploit the preference gap between men and women. Apart from this, the fact that few men’s products are also priced more than women’s products shouldn’t be turned a blind eye on. Thus, it is rightly said by Anna Tuchman that, “There’s not a lot of money being left on the table if people truly do prefer the product formulations that they’re choosing.” Hence, the notion that by way of the pink tax, the necessity cost more for women is false since the pink tax doesn’t exist.
Author(s) Name: Meghana G (M S Ramaiah College of Law, Bengaluru)