Hispanic Americans, and other minorities, are both economically and socially disadvantaged unless SBA can prove, on the basis of substantial evidence, that an applicant who is a minority has not experienced impediments in the business world as a result of being a minority.

Under the provisions of H.R. 11318, nonminorities may also be found eligible for program participation, but only if the applicant can prove to SBA's satisfaction that he or she has experienced impediments in the business world which are not common in kind or degree to all small business generally, and which result from both social and economic causes over which the individual has no control. This last method of proving disadvantage is identical to the one found in the Senate Bill, but I do believe a two-tiered approach is both just and reasonable and I urge your consideration of that method.

I do concur with those provisions of your Bill which clearly indicate that the 8(a) program should be used as a development tool and not solely as a means to channel contracts to the disadvantaged. However, at this point in time, I am constrained to express reservations concerning the creation of a program "Director" and delegating to that office certain functions which may duplicate the activities of the Office of Minority Business Enterprise of the Department of Commerce. While I believe that reorganization of Federal programs to help racial and ethnic minorities is a topic deserving of serious discussion, I do not believe that topic should be melded with substantive program improvements since each subject must be considered on its own merits. I pledge to you now my commitment to jointly explore reorganizational topics as soon as we finally pass and send to the President a comprehensive package of major improvements to existing programs. But there are two distinctive issues presented which demand separate study. While reorganization is an important topic, I believe that it must be subordinated to consideration of substantive program improvement, because that latter activity will result in the direct passage of desperately needed aid to the minority business community in the shortest period of time.

Finally, I would urge that this Committee continue to give its most serious consideration to improving the subcontracting program and the indirect Government procurement program, both of which are addressed in the House Bill H.R. 11318.

Let me once again express to this Committee my sincerest thanks for allowing me to testify this morning, and I look forward to working with you in the future to achieve our mutual goal of assisting our small and minority business community.

** * **

-3

*Source:

U. S. Department of Commerce, Office of Minority
Business Enterprise

COMPARISON U. S. BUSINESS OWNERSHIP, 1972*

*Source: Department of Commerce, Office of Minority Business Enterprise

Senator NUNN. I see that Senator Chiles has not arrived as of the moment.

Is Ms. Anne Wexler here? If you do not mind, we will lead off with you. We welcome you this morning to our hearings. Introduce the people with you for the record and then proceed.

STATEMENT OF ANNE WEXLER, DEPUTY UNDER SECRETARY OF COMMERCE, AND CHAIRPERSON, TASK FORCE ON WOMEN BUSINESS OWNERS, ACCOMPANIED BY CHARLOTTE TAYLOR, EXECUTIVE DIRECTOR, TASK FORCE ON WOMEN BUSINESS OWNERS; AND CAROLYN JEFFERSON, CONGRESSIONAL LIAISON, DEPARTMENT OF COMMERCE

MS. WEXLER. Senator, on my right is Charlotte Taylor, Executive Director, Task Force on Women Business Owners, and to her right is Carolyn Jefferson, Congressional Liaison, Department of Com

merce.

Senator NUNN. Thank you for coming. Glad to have you.

MS. WEXLER. Shall I proceed?

Senator NUNN. Go right ahead.

MS. WEXLER. Mr. Chairman, it is a pleasure to be here today on behalf of the Interagency Task Force on Women Business Owners, which I chair. As you are aware, the task force was established by the President following hearings last summer by the Subcommittee on Minority Enterprise and General Oversight of the House Small Business Committee.

At those hearings, Secretary Kreps pointed out that, while women are a growing force in our economy, the Federal Government has focused little attention on their specific problems in entering the mainstream of our economy as business owners. Therefore, the President appointed a special interagency task force to address this particular issue.

The mandate of the task force is to look at both the problems faced by potential and existing women business owners and the Federal programs aiding such women. The more detailed objectives and the membership of the task force have been provided for your record.

The task force is currently in the last phase of its study and will report its findings to the President in early May.

In the course of our research, we have found that women face severe disadvantages in the marketplace as business owners. Women have traditionally been excluded from the economic mainstream of our society. They have been inhibited, and sometimes prohibited, from taking certain jobs, and they are predominantly, as you know, in low-paying occupations. Both of these factors affect their access to business ownership in that they limit management experience and discourage equity investment.

A recent study released by the Commission on Civil Rights noted that women and minorities still lag in economic gains, despite this Administration's efforts to improve the situation. This is particularly true for women business owners.

As owners, women face all the traditional problems of small business owners, plus one: A negative attitude toward women in the business environment. This locks out money, it locks out markets, and it locks out management credibility. It is similar to the

barrier of negative attitudes toward minorities. However, if we look at the statistics from the Bureau of the Census 1972 survey of minority- and women-owned firms, they indicate that women are in an even worse position in the marketplace than minorities.

Although these statistics do not provide a perfect picture of the size and scope of these enterprises-because minority firms owned by women are included in both the figures for minority enterprise and for women-owned enterprise-they do provide some insight into the situation.

Despite their larger number in the population and supposed advantages, women owned only 4.6 percent of the Nation's businesses and the receipts of these firms represented only 3 percent, or $8.1 billion, of the total receipts of all business firms in America. Minorities, on the other hand, owned 4.4 percent of businesses and earned over twice the gross receipts, about $16.6 billion of women-owned firms. The average gross revenue for a minority firm was $44,000 compared to $20,000 for a woman-owned firm.

It is for this reason that I strongly support opening business development programs to women. We have found in our review of Federal business programs that few recognize the needs of women business owners. Yet, these needs are substantial.

The Congress has also been concerned. In February, at the request of the House Small Business Subcommittee, our task force developed an interim position on the question of including women in the section 8(a) provisions of the Small Business Act.

Senator NUNN. Let me interrupt and ask a question. Concerning what you say about women involvement in businesses-now, I have read in the past about the amount of wealth women possess in the Nation. I suppose you are distinguishing between those two, are you not? I have read where women control over 50 percent of the purchasing power.

MS. WEXLER. That is not accurate. That is a myth. Indeed, when you use the word "control" it is a rather misused, misunderstood word because most of that money is inherited money which is not managed by women, although in some cases it is owned by women.

Senator NUNN. How would you describe it? Could you give us the figures on how much women really control in the percentage of capital assets?

MS. WEXLER. I do not think there are such numbers, Senator. I think that probably since the data is so limited that it would be almost impossible to find out, but let me give you some IRS figures on income for 1972 personal wealth.

Senator NUNN. Thank you.

MS. WEXLER. A small portion, about 4.7 percent of women have estates of more than $60,000 in this country. This is generally not earned capital, but inherited or transferred from the husbands. Of all the people with estates more than $60,000, approximately 60 percent, about 7.8 million, were men while 40 percent were women. In terms of control, it is very, very small and has never been measured and there is no data. It simply does not exist. Senate

they M

NUNN. Of course if women owned assets, the fact that ot controlling the asset is a matter of their choice. R. In most cases, but then

Senator NUNN. Some of it is in trust; some of it would be beyond that.

MS. WEXLER. I cannot give you a percentage because I do not know, but women traditionally who are in that category do not manage those assets.

Senator NUNN. But I think that there is a distinction here that I do not think we can overlook when you are comparing minority ownership with women ownership of assets and I do not come to any conclusion because of that distinction.

MS. WEXLER. You should not.

Senator NUNN. But I would like for all of our witnesses to think about it as we go through this. I would like to be able to analyze it

more.

MS. WEXLER. I think at the same time you want to keep in mind the figure that I mentioned which is the total number of women who control estates of over $60,000 is only 4.7 percent of the population.

Senator NUNN. How would that figure compare with men who have over $60,000? Did you say 4.6 percent?

MS. WEXLER. No, the 4.7 percent is the percentage of the females who have estates of over $60,000.

Senator NUNN. But that does not mean 96 percent of the men do?

MS. WEXLER. Correct.

Senator NUNN. Do you have a figure for the men?

MS. WEXLER. No, I do not but we could get it for you.1

Senator NUNN. I would like to have that.

In other words, I know statistics can talk in any direction and I want to make sure we are comparing apples with apples here. MS. WEXLER. I hope we are comparing apples with apples, too. The point we are trying to make, and I think the task force will be developing as it finishes its work and gives its report, is that there is a substantial number of people in this country who happen to be women and suffer the same disadvantages as other minorities in relation to entrepreneurship.

Senator NUNN. Excuse me for interrupting.

MS. WEXLER. Now, this is in reference to 8(a). We pointed out to the House subcommittee that we opposed the two-tier concept that presumed minority groups were eligible for the section 8(a) program as being socially and economically disadvantaged but made other groups eligible only if they bore the burden of proof as to their social and economic disadvantage.

The majority of the task force felt that all groups should be allowed to participate in the program on a case-by-case determination of need. However, if a two-tiered concept is adopted, making it easier for certain classes to enter the program because of historic evidence of social or economic disadvantage, the task force felt women should be included as one of those groups because of similar historic evidence.

'Ms. Wexler supplied the following information: "According to the Internal Revenue Service, statistics on income for 1972 personal wealth, 7.7 percent of the male population own estates over $60,000, compared to 4.7 for women.'