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

they

M

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.'

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."

Although there can be little doubt that racism and sexism are different, there can also be little doubt that the roots for each are similar, and the results are the same.

At root is the belief that someone is inferior, or unable to perform some task, because he or she is either of a certain race or sex. The result of this belief has been to unfairly limit access to economic power in our free-enterprise system.

In fact, in 1973, the Supreme Court noted that the position of women in our society has been, in many respects, comparable to that of blacks under the pre-Civil War slave codes. Neither slaves nor women could hold office, serve on juries, or bring suit in their own names, and married women were traditionally denied the legal capacity to hold or convey property or to serve as the legal guardians of their own children.

Women could not practice law until the end of the 19th century; they could not vote until 1920; and it was not until 1972 that sex discrimination was prohibited in educational institutions, opening admissions to qualified women as well as qualified men.

Economically, their disadvantage has been even more pronounced. It was only in 1943 that all common law States granted women sole ownership and the right to retain earnings, along with the right to contract, manage their own property, and sue or be sued, rights taken away from them by the Married Women Property Acts in the mid-1800's.

It was not until 1963 with the passage of equal employment opportunity laws, that women received the right to equal pay for equal work, and not until 1974, with the passage of the Equal Credit Opportunity Act, that they received the rights to equal access to credit regardless of sex, marital status, or childbearing potential. However, even this act has less stringent provisions for commercial credit, a factor that affects business ownership.

The President's Task Force on Women's Rights and Responsibilities, in 1970, pointed out that "sex bias takes a greater economic toll than racial bias."

Today, this situation has not changed. In 1976, the median income of white men employed full time was $14,272; of black men, $10,222, of white women $8,376, and of black women, $7,831.

The impact of this cultural and economic discrimination on ownership opportunities is obvious. Not only have women been excluded from apprenticeship and management occupations which can lead to self-employment, but their earnings have been low. Both of these affect the key factors looked for by investors in small businesses-adequate capital and management track record.

The composition of the work force has changed drastically in the last 20 years, narrowing the gap between male and female participation in the work force. However, the gap in earnings has actualÎy increased. Women still dominate the work force as clerical, educational, and service workers, predominantly low paying fields. Women are the Nation's bank tellers rather than bank officers; bookkeepers rather than owners; secretaries rather than managers. Women with college educations still earn less than men with high school educations. Only 1 in 20 women held managerial or administrative occupations in 1977 compared to 1 in 7 men.