Does Our Economy Work for Women?

Undervalued, unappreciated, and overworked. Something’s not adding up for women.

Does the Economy Work for Women?

Anyone familiar with a few alarmingly standard statistics — 54% of women have experienced unwanted sexual advances at work, per national averages women make anywhere from 53–77% of men’s earnings depending on their race/ethnicity, women hold only 6.6% of Fortune 500 CEO roles — would have to answer no.

The Entrepreneurial Alternative

Women have been leaving traditional jobs for entrepreneurship at breakneck speeds. In the past 9 years, the growth of women-owned businesses has been 9 times faster than the national average. Women are now majority owners of 42% of the nation’s businesses. In 2019, women launched over 1,800 new businesses per day. While these figures seem like something to celebrate, they also tell only part of the story. Morran Aarons-Mele, founder of Women Online suggests “Perhaps instead of unquestioningly cheering women starting businesses, we need to more critically examine why so many women are leaving [bigger companies] and how we might get them to stay. Entrepreneurship has been marketed as a great alternative to the strictures of a traditional job — but that vision is often a fantasy.”

Out of the Frying Pan and Into the Fire: The Real Story of Women’s Entrepreneurship

Despite impressive growth rates, women-owned businesses tend to be smaller, in both revenue and number of employees. Nationally, 88% of all women-owned businesses generate less than $100,000 in revenue per year; in contrast, only 1.7% of women-owned businesses make over $1 million. And while women-owned businesses make up 42% of businesses, they represent only 4.3% of all business revenue. According to the SBA, for every dollar in revenue a woman-owned business generates, a male-owned firm earns $2.30.

From the American Express 2019 State of Women-Owned Businesses Report

It’s About Access to Capital

Access to capital is one of the most challenging issues women entrepreneurs and small-business owners face, not only at the onset of their entrepreneurial journey but throughout their businesses’ life spans. Women-owned businesses generally receive only 4.4% of all dollars lent to small businesses each year. Further, women are often penalized with higher interest rates, paying, on average, 6.4 percentage points higher on personal loans and 5.4 percentage points higher on short-term loans than male entrepreneurs pay.

“Women Should”

The reoccurring message for women “trying to make it” either in the corporate world or as entrepreneurs and business owners is to adopt the extra work of learning how to play catch up in order to assimilate. To be successful, women should network, hone assertive communication skills, get on the finance committee, practice asking for a salary raise, or take on more responsibility and risk. Sitting in on workshops designed to help democratize women’s access to capital, for example, is the equivalent of a college drinking game. Every time you hear the phrase “women should”, drink!

Social scientist; devoted to designing spaces, policies, & programs for women all women.

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