Today is American Business Women’s Day, a celebration of the accomplishments and legacies of female entrepreneurs and business owners.
Starting a business can provide the financial freedom, independence, and flexibility that women desire. It’s not surprising that so many “hang their own shingle” each day in America.
It’s for that reason that policies at every level of government should encourage business formation and growth, not stifle it.
Check out these 5 facts about women-owned businesses:
- There were 12.9 million women-owned businesses in the U.S. in 2019
- Women-owned businesses employed 9.4 million workers and generated $1.9 trillion in revenue.
- U.S. women started an average of 1,817 new businesses per day in 2019.
- The number of women engaged in part-time entrepreneurship (aka “sidepreneurs”) has grown by 39%, nearly twice as fast as the overall growth in female entrepreneurship.
- Women of color are starting businesses at 4.5 times the rate of all businesses. From 2014 to 2019, firms owned by women of color grew an astounding 43%, while women-owned businesses grew 21% and all businesses increased just 9%.
(Source: 2019 State of Women-Owned Business Report, commissioned by American Express)
Half of all women-owned businesses are concentrated in three industries. They mirror the industries that female workers are concentrated in: Other services such as personal care and grooming (22% of all women-owned businesses), healthcare and social assistance such as daycare and home healthcare services (15%), and professional/scientific/technical services such as lawyers, bookkeepers, architects, public relations firms and consultants (13%). Although not as many women start businesses in retail trade–which is a large employer of women–it is the second-highest industry for their revenue.
What policymakers should do
Flexibility is increasingly important to women. These statistics predate the pandemic, so we can surmise that the shift toward sidepreneurship has probably accelerated as women explored ways to supplement their family incomes while remaining at home to oversee children’s educations or to care for other family members.
Many of these women are independent contractors and do not prefer full employment rather independent work. Policymakers should respect that choice.
Unfortunately, liberals in Congress seek to force independent contractors into full employment and traditional jobs. This will not work for a substantial number of men and women who say that their personal situation prevents them from working in a traditional setting. The Protecting the Right to Organize (PRO) Act would force a mass reclassification of workers that could lead millions of freelancers across the country to lose their independent work and livelihoods.
Federal regulators may also attempt to erect new hurdles for independent contractors if Congress doesn’t pass legislation.
States, like California, enacted restrictive legislation (AB5) and killed critical flexible work opportunities for many residents from translators to mall Santas.
Tax increases and burdensome regulations on business are other challenges that make it more difficult for women to grow their enterprises. Congress is considering both as part of the $3.5 trillion Bernie-Biden budget bill.
At the state level, occupational licensure, or permissions granted by the state for a person to practice an occupation, can become hurdles for women to start their own businesses. From hair braiders to yoga instructors, there are ample opportunities for women to start enterprises fueled by their passions for food, beauty, fashion, wellness, faith, and more.
However, these entrepreneurs run into work requirements and regulations that have no health or safety rationale, but simply make it difficult for new competition to enter the industry. For military spouses, immigrants, and those with a criminal background, the hurdles to work can be daunting.
As we celebrate how far women-owned businesses have come, we should work to ensure that we remove the government-imposed obstacles at the federal and state levels. The economy is generating the opportunities that women want, the government should not be a roadblock to this progress.