Why Low Self-Worth Drives Lower Wages for Women Freelancers — and What You Can Do About It

Summary: This week's training episode, written by my good friend and colleague Dianna Huff, is one of the most important we've ever published at the Academy. It addresses the elephant in the room everyone has been ignoring for years

2012 Freelance Industry ReportEd Gandia’s 2012 Freelance Industry Report has some interesting data pertaining to women and money.

For instance, female freelancers earn more per hour than do their male counterparts at almost every rate level from $20 to $59. And, at $60 to $99 per hour, men and women are just about equal.

But as soon as you get to the $100, $150 and $200+ per hour ranges, men are consistently outearning women.

Ed believed he knew why — but he needed a woman to tell the story.

I am that story. Yes, I’m in the $200+ per-hour range now, but I struggled for years to get there and couldn’t figure out why men — with less experience — were making a whole lot more money than I was.

What was I doing wrong? I knew it wasn’t because I dumb or lazy.

It took me awhile to figure it out. It’s because I undervalued my experience and skills. I believed I was worth less because I was a mom who worked from home — one who didn’t “need” the money. And, I bought into negative beliefs and lack thinking.

This article is about the elephant in the room that none of us want to talk about — namely, that we women earn less due to our own fears, lack of money knowledge and low self-worth.

Women Begin Their Careers With Lower Salaries — and Never Catch Up

I started my business in 1998. I already knew quite a bit about how to run it because I had been a business manager for a small manufacturing firm for seven years.

I knew the ins and outs of doing my own payroll and paying taxes, ordering supplies, invoicing and even getting clients. And, because I had worked corporate marcom, I knew all about marketing.
What I didn’t know was how to charge for my services.

When I started, I had just quit my corporate job where I had been making $42,000 a year complete with two weeks of vacation, full medical insurance, and other perks.

Since I was now working from home part-time and had lower expenses, I determined that I only needed to make half of that $42,000. So, I made that my goal the first year — to bring in $21,000.

The problem? Women, I’m afraid to say, make less then men even for the same jobs. Because I was in the “pink collar ghetto,” my salary was already very low. Of course, when I was offered the job, I didn’t think to negotiate for a higher salary. I just took what they gave me. I thought I was lucky to have it! (More on that later.)

So by cutting in half my already low salary, I set myself up for poverty wages. In addition to paying for household expenses, that $21,000 also had to cover my business expenses.

The first few years in business, I was miserable. My low point came when a client hired me to write a sales letter for a very high-tech product. That letter cost him $165 because I was charging by the hour. “Wait a minute,” I thought, “something isn’t right here.”

And so started my journey on how to increase my earnings. I spent years reading books and doing the exercises. My income did increase — how could it not with all that work! — but I couldn’t reach the level at which I knew I could and should be earning.

The problem, I know now, is because I approached earning money from the female perspective.

In her book, Knowing Your Value: Women, Money and Getting What You're Worth, Morning Joe co-host Mika Brzezinski talks about her own challenges with earning a salary that matched her experience and worth.

For many years, Mika’s co-host Joe Scarborough made 15 times what Mika made. Why the discrepancy? Mika didn’t know her value — and thus worked mega hours at a freelancer’s wage.

Like me, she made the classic mistake of taking a low starting salary — and then spent the next few years clawing and fighting her way to a better one. It wasn’t easy.

Since reading her book (twice!) and recommending it to many women, I’ve come to see the same problems Mika experienced in my own life and in other women’s. When it comes to underearning, women, especially women freelancers, make these three very huge mistakes.

Mistake #1 — We Undervalue Our Experience

A couple of years into my business, I discovered Bob Bly’s book, How to Make $85,000 a Year Copywriting. This book was a lifesaver for me because in it, Bob listed his fees for many of the same types of projects I was doing.

I could see immediately that I need to do two things: change from hourly to project fees (which I did) and raise my rates.

But again, I made a huge mistake. Instead of setting my project fees to match Bob’s, which were quite nice, I made them lower. Why? I determined I wasn’t “qualified enough” to charge those fees.

I can still hear my thought process to this day . . .”Well, I’m not Bob Bly. I haven’t written dozens of books. I don’t do direct response. I don’t have a track record. I can’t charge what he’s charging. So I’ll charge 50% of what he’s charging.”

Yep. That’s what I did. This despite the fact that I was perfectly able to write just about anything for high-tech and manufacturing companies and do an excellent job at it, too.

I know now that what I did is a typical female response. And I’m not the only one who does this. In my travels, I’ve met lots of really smart, really bright women who charge peanuts. Why? Some of the reasons I’ve heard are:

“I don’t have the experience.”

“I just need pin money.” (“Pin money” refers to the household “allowance” men gave their wives upon marriage. It was spent on small household items or personal adornment. That alone should be a clue to rethink why you’re in business if you’re working for “pin money.”)

“I’m lacking awards and things.” (Yes, a woman actually said that to me.)

“The going rate in my industry is .10 cents a word. That’s all I can get.”

Undervaluing our skills and experience is probably the biggest mistake we women make when it comes to setting our fees as consultants and freelancers. Why do we sell ourselves short? I think it’s due to this next mistake.

Mistake #2 — We Consider Ourselves So LUCKY

In her book, Mika interviews a number of high-powered women about money, the mistakes they’ve made and the lessons learned.

The one phrase I kept seeing over and over in those interviews was, “I am so lucky to have . . .” a flexible job, a great position, a good salary, health insurance, the ability to attend a child’s Halloween parade, [fill in the blank].

If you’re a mom and you work at home, you know what I’m talking about. You feel soooo grateful to be able to work from home and be with your children. I know. I’ve been there.

Working from home gave me the best of both worlds. I got to work, and I got to be with my son.

That’s what I’d tell myself over the years when I learned that men doing the same type of work as I were making a lot more money. “Stop complaining,” I would tell myself. “You’re lucky to be home.”

But deep down, I was really resentful. I remember when I first met Ed Gandia. He was in the process of launching his freelance business, and he asked me if it were possible to make $100,000 a year copywriting. I laughed. I wasn’t making that much money.

Ed hit the $100,000 mark at about the same time I did. It took him two or so years to get there after starting his business. It took me eight.

I was so lucky! Oy.

Mistake #3: We Buy Into Lack Thinking

I hate to say this but it’s a truth — we women are sometimes incredibly nasty when it comes to judging our fellow sisters. (This is something Mika discusses in her book, too.)

We judge each other on how much time we spend with our kids, who brings the home-baked versus store bought goodies to the class party, and whose kid shows up in the lovingly made-from-scratch costume at Halloween.

We also judge each other on how much money we spend on ourselves. If we spend on ourselves, we’re not putting our children first (baaaaad). Don’t believe me? Just watch What Not to Wear and listen to the women explain why they stopped buying clothes for themselves.

I would read those articles about how you didn’t need a wardrobe, manicured nails or good shoes when you worked at home. I read articles and books about how to pinch pennies, cut costs and live on the cheap. (I don’t think men ever read these books.)

And boy, did I take this advice to heart. By the time I began working with an image consultant in 2009, I was still wearing to client meetings the slacks, shoes, and blouses I wore in the mid-1990s! I can remember showing up at one client meeting wearing a scarf to hide a hole in my sweater — because I believed I couldn’t afford to buy myself a new one.

No wonder I wasn’t making more money!
If you’re not earning the money you want, take a look at YOU. It’s easy to blame your lackluster earnings on the economy, clients who won’t pay, the fact that it’s a man’s world, or that in your industry you can only charge certain rates.

If you want to earn more money, here are three steps you can take (you can do lots more, but I don’t have the space to list them out):

1. Determine your worth

It’s easy to look at the Freelance Industry Report and other similar sources and determine that yes, you’re making “enough” if you fall in the middle or high end of the range. After all, as one woman said to me, “You know, $100 dollars an hour is a lot of money.”

Yes, it is, IF you believe you don’t “need” the money because your husband brings home a good salary or you’re able to live on less due to penny pinching (that’s what’s referred to as noble poverty).

Charging what you’re worth, however, has absolutely nothing to do with what other people charge, how cheaply you can live or what your husband makes.

Charging what you’re worth has everything to do with your skills, your experience and the value you provide to your clients.

Take a pause and go back and read those two statements again.

It doesn’t matter if your husband or partner pulls in a cool million or you’re a trust fund baby. If you have the skills and experience, you charge what you’re worth. Period.

How do you determine your worth? Take a good long look at the work you do to see how you help improve your clients’ bottom line or their business in general.

Also look at the skills and experience you bring to the table: what makes you unique or different? What skills do you have that aid you in your work? Are you showcasing those skills?

For me, these skills include my intuition and sensitivity. These are my “female” gifts, which I devalued my entire adult life — but they’re what make me great at what I do. Once I figured this out, I was able to place a higher value on them — which made it much easier to raise my fees.

2. Charge What You’re Worth

It really bothers me when I hear women say, “I can’t charge any more than what I do. That’s the going rate.” Usually the going rate is something absurd -- .10 cents a word to translate or to write a blog post, $8.00 an hour for virtual assistant work.

I used to pay my babysitter $6 - $8 dollars an hour — and she was in high school. You, with your degrees, experiences, skills and expertise are worth way more than babysitter wages.

As prosperity guru Randy Gage says, prosperity is a value for value exchange. If you have a low value of yourself, you’re basically lowering the value of your work — and you get low value in return.

If you’ve done your homework from Step One, you now know what you’re worth and how your work helps companies’ bottom lines and overall performance.

This is where it gets hard, however. Maybe what you’re worth is more — much more — than the “going rate.” You can already hear the voice in your head, “I can’t charge that! No one will hire me.”

If you have the experience and skills, face your fears and charge your new fees.

Here’s what will happen: some prospects won’t be able to afford you. But others will. Instead of having six clients at your low fees, you’ll have two clients at your new higher fees — clients who will VALUE you.

And let me tell you, that is really nice place to be.

3. Raise Your Rates -- Regularly.

In her book, Mika talks about how Joe would have knock down fights with NBC brass to get a higher salary for his work. (Mika, however, continued to struggle along at slave wages.)

Men, for some reason, have something in their DNA that gets them to ask for more money anytime they’re asked to do something new. Women don’t.

You learn quite a bit in the course of a year. If you’re like me, you read everything. Maybe you attend a conference or two or a few workshops. And, you learn while on the job. You take on new projects that stretch you a little bit — or a lot.

All of this growth means you have more worth — and that you’re worth more. So raise your fees. Regularly.

If you lose a client or two, that’s ok. It just means you’re making room for new clients — the ones who will give you gigs that will help you grow and change even more.

What’s your experience with charging what you’re worth? Please share your stories. The more we talk about this important topic, the more we all benefit.


Dianna Huff, President of Huff Industrial Marketing, Inc., is also the author of Cash Flow for Freelancers, a guide for freelancers and their variable income. You can hear Dianna's interview at Ed Gandia's High Income Business Writing Podcast.

 

 

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