Women and the Market; S. Staley

As a group, women are unquestionably dis criminated against in the market place. Women often have fewer skills, are more inexperi enced, and more likely to leave the labor market than are men. Further, men often pre clude their advancement, whether consciously or unconsciously. Faced with these impediments, what are the most effective means for women to achieve economic success? While many have chosen political solutions, legislated approaches to the problems of discrimination have failed. Laws rarely change fundamental attitudes and preju dices. At the same time, however, a growing number of women are trying a much more ef fective approach: entrepreneurship. In a market economy, economic develop ment can only occur through initiative, innova tion, and, above all, risk taking. Contrary to popular belief, the market has a long and suc cessful history of taking people of all ethnic and racial groups from "rags to riches."

The market, however, works in a subtle way Sam Staley is a freelance writer and graduate student in economics at Wright State University in Dayton, Ohio. His articles have appeared in the Chicago Tribune, the Houston Post, the Santa Ana Register (CA), The Times of the Americas, and several other papers. that few people fully comprehend. A market economy is driven by entrepreneurship which thrives on providing a socially desirable product efficiently and effectively. It is only through the utilization of means compatible with the market that any person or group can succeed. The Current Economic Challenge Women now make up 44 per cent of the work force. The number of women re-entering the work force· soon after childbirth rose to 57 per cent in 1985. This feminization of the work force has dramatically altered the scope and dy namics of the economy, and, contrary to pop ular belief, the economy is responding accord ingly. Business increasingly realizes that it must cater to the needs of women if it is to re main competitive, and herein lies the real op portunity for economic progress.

"One of the most interesting things I see happening in the late 20th century is that the corporation is· changing because women are starting to participate in it," observes econo mist Jennifer Roback. "Women's greater par ticipation· benefits small companies at the ex pense of big ones. Big companies are not willing to be flexible about child care and ma ternity leave and home emergencies. Small businesses can handle things like that, and, in particular, your own business can handle it. ' '1 Twenty-four per cent of all the businesses operating in the United States are owned by women, accounting for $98.3 billion in receipts in 1982. While these businesses are still con centrated in low income service companies (over half earn less than $5,000 per year), their Table 1: Family Income by Ethnic Group on their ethnicity and race. However, racism has not prevented the Jews, Japanese, or Chi nese from becoming economically successful in the United States. Furthermore, these groups have not been favored by government interven tion.

The key element of economic success for these ethnic groups has been their relative con centration in business and enterprise. Indeed, aside from the well-known position of Jews in business, the Chinese and Japanese have a long history of entrepreneurship stemming from their immigrant background in the United States. "[T]he social histories of Americans of Chinese and Japanese descent, " writes sociolo gist Ivan H. Light, "offer empirical illustration of the manner in which poverty, discrimina tion, and ethnic visibility stimulated business proprietorship among some disadvantaged im migrants. "3 For example, almost 12 per cent of Koreans are self-employed, while 7.9 per cent of all Japanese and 7.6 per cent of all Chinese are self-employed. These percentages are well above the national average of 6.8 per cent. 4 Despite extreme discrimination against Asian Americans in the past, they remain one of the most upwardly mobile income groups in the United States.

The recent experience of Korean immigrants most dramatically illustrates this phenomenon. Ethnic and immigrant businesses provide an es sential alternative to the general labor market. 144 THE FREEMAN. APRIL 1987 representation is increasing. The 1986 White House Conference on Small Business in Wash ington, D.C., serves as one indicator: participa tion by women doubled from 1980 to 35 per cent of all delegates. More important, however, is the service ori entation of these businesses. Service-oriented businesses, which are becoming increasingly important in the innovative information so ciety, offer unique opportunities for many women. First, they often are labor intensive, requiring little capital but many hours of work to succeed. Second, they can be started on a small scale and built over time, utilizing skills that can be developed in the process. Third, they often do not require, immediately, the complete commitment of the entrepreneur.

These businesses can be started relatively easily and have extraordinary possibilities for growth. Ironically, these types of businesses have often fueled the development of other minority groups facing severe discrimination. Asian Americans, for instance, started out in labor intensive industries such as laundries and res taurants. Indeed, the experiences of other groups lacking suitable job skills, experience, and capital indicate that the process of entrepre neurial development applies to many sectors of the population. The Legacy of the Market: Ethnic Enterprise Traditionally, economic success for minority and disadvantaged groups has come through business not politics. Jews, Asians, blacks, and Hispanics have all succeeded in the American economy through employment in small busi nesses or entrepreneurship, whether in store front shops or professional careers. No group has been successful in using the political system to affect significantly their relative in come. In fact, "some of the most dramatic rises from poverty to affluence in the United States have been among groups who did not at tempt to use the political route to economic ad vancement . . . ." 2 Table 1 provides statistics about various ethnic groups and their relative family incomes.

Notably, the groups with the highest family in comes have faced severe discrimination based Ethnic Group Jewish Japanese Polish Chinese Italian German Irish Filipino West Indian Mexican Puerto Rican Black American Indian Source: Sowell, p. 8. Relative Income (per cent of national average) 172 132 115 112 112 107 102 99 94 76 63 62 60 WOMEN AND THE MARKET 145 Suzanne Boughton, owner-operator of PSG Typesetters, Ltd. Table 2: Ranking of Women-Owned Businesses Personal services Real estate agencies Health services Restau rants Special trade contractors Food stores Apparel and accessory stores Wholesale trade, non-durable Total Women-Owned Businesses: Source: 1982 U.S. Economic Census13 419,113 225,551 128,389 66,811 47,219 37,635 29,130 22,231 2,884,450 Self-employment helped Korean immigrants overcome tremendous disadvantages in the work place and attain more secure work at higher incomes, accelerating the pace of social mobility. 5 Immigrants face many of the same disadvantages as native born minorities (in cluding women), and, in many cases, the dis crimination is more severe: "Immigrant doctors, pharmacists, engineers, or attorneys may pump gasoline in service stations, but they are looking for escape from this level of em ployment. Hence, their labor force disadvan tages (poor English, unrecognized professional degrees, under-and unemployment) confer on educated immigrants a motive to open their own businesses."6 Further, these groups main tain a propensity toward self-employment through successive generations. 7 For minorities, especially immigrants, the market has allowed them to take advantage of their undervalued human capital. Instead of at tempting to overcome institutional barriers to social mobility, many minority groups have chosen the entrepreneurial route to success.

Asian-Americans in particular have much higher rates of self-employment than other groups. 8 Women and Economic Change The market provides a remarkable opportu nity for women as well. When people shop for services in the Yellow Pages, or buy a product on the supermarket shelves, they do not check the ethnic background or sex of the producer. 9 Sexual discrimination, like racism, cannot be legislated away.l0 By participating in the market, and taking advantage of the renewed trend toward small companies and entrepre neurShip, women will make more headway against discrimination than at any other time in their history. The problem, however, is much more com plex than getting more women into business. Corporations, with their hierarchy of power brinksmanship, allow men to exercise their prejudices to the detriment of women. While some have made progress in hiring women, large corporations often institutionalize impedi ments to progress. Furthermore, men may not realize that they are discriminating. In a recent Woman's Day survey 81 per cent of the women polled felt that men underestimate them in the work place. ll Since men often dominate deci sion-making in larger corporations, women are often fighting the perceptions of their male su pervisors.

Yet, with the current trend toward an economy driven by smaller corporations, the prospects for women are looking better. The 1980s is hailed as the decade of entrepreneur ship, and companies such as Federal Express and Apple Computer successfully challenge corporate giants. Deregulation has sparked en trepreneurship in many sectors of the economy, and this trend has clear implications for the role of women. Jennifer Roback notes that "We are starting to observe a strengthening of the smaller firm as opposed to the larger firm because the small 146 THE FREEMAN. APRIL 1987 firm can accommodate the other needs that women have in their lives."12 Women are be ginning to dominate the labor supply, and newer and smaller firms have the managerial flexibility to more effectively utilize female workers. As Table 2 illustrates, women are currently concentrated in flexible, service-ori ented firms. Many, such as personal services, allow for future growth, building from the ground floor up.

Despite their large numbers, however, women are still relative newcomers to the economy. In the past, significant economic progress has not occurred for a generation or two. While this may seem slow, no other system has permitted faster change or growth for any particular group. In fact, the free market is often derided for the pace of eco nomic and cultural change inherent in it as a social system. Implications The influx of women, like immigrants in the late nineteenth century, has created an imbal ance of resources in human capital. This condi tion' however, merely sets the creative and in novative forces of the market in motion. As long as it is free to change, the economy will adjust. In effect, the market economy is driven by a "causal loop" between resources and human wants. 14 The evolution of the market so ciety has created institutions which distribute natural resources (including people, human capital) so that the most valued wants of society are met.

In achieving this, the market has developed an amazingly diverse, decentralized economic system unparalleled in the modern world. "This diversity in the forms of economic life . . . is important not for its own sake but be cause it is an earmark of successful adaptation and full utilization of the resources available. The thematic terms are thus autonomy, experi ment, and diversity. "15 Women, like various minority groups, may find that their talents, skills, and needs are best met outside the corporate world and in the realm of small business. By moving into entre preneurial enterprises, they are more likely to expand their own opportunities and open up the road to economic progress. The ultimate result of this challenge is a more competitive and more productive society. Rather than attempting to find political solu tions, then, women should be moving into the market· through their own business ventures.

Instead of regulating policies and practices of existing businesses" women should be setting the standards for future generations by pro viding more efficient and effective alternatives in the market. Instead of mandating the ap proval of men in existing corporations, they should be maximizing their effectiveness by providing a better product cheaper within an economic climate suitable to their needs and wants. Thus, the needs of women in the market may be better served by deregulating the economy - by allowing people to provide capital to new and "risky" businesses without the burden some rules of the Securities and Exchange Commission or potential regulation of the Fed eral Trade Commission. The key to the success of women and minorities is access: protecting the ability of all people to enter the market and provide products that consumers desire without paternalistic and counterproductive restraints perpetuated by the state. 0 1. Cato Policy Report, Volume VIII, No.4, July/August 1986, p.9.

2. Thomas Sowell, Markets and Minorities (New York: Basic Books,Inc., 1981), p. 106. 3. Ivan~H. Light, Ethnic Enterprise in America: Business and Wel fare Among Chinese, Japanese, and Blacks (Los Angeles: Univer sity of California Press, 1972), p. 5. 4. Ivan H. Light, "Immigrant Entrepreneurs in America: Koreans in Los Angeles," in Clamor at the Gates (San Francisco: Institute for Contemporary Studies, 1985), p. 170. 5. Light, 1985, pp. 172-178. 6. Light, 1985, p. 175. 7. Light, 1985, p. 169. 8. See Table 1 in Light, 1985, p. 170 for a breakdown of statistics on self-employment by ethnic groups. 9. For a readable explanation of the relationship between the market and economic discrimination see Walter Williams, The State Against Blacks (New York: McGraw-Hill Book Company, 1982), chapters 1, 2 and 11. 10. For a clear, concise discussion and analysis of the relationship between government, law, and discrimination see Thomas Sowell, Civil Rights: Rhetoric or Reality? (New York: William Morrow and Company, Inc., 1984), chapters 1, 2, 5 and 6.

11. Reported in the Dayton, Ohio Journal Herald, June 26, 1986, p.25. 12. Cato Policy Report, p. 9. 13. Reported in Dayton, Ohio Journal Herald, August 7, 1986, p.30. 14. Nathan Rosenberg and L. E. Birdzell, Jr., How the West Grew Rich: The Economic Transformation of the Industrial World (New York: Basic Books, Inc., 1986), p. 33. 15. Rosenberg and Birdzell, p. 33.