What women own: U.S. business edition

The other day President Obama celebrated women owning businesses, as well as the problems they face:

More women are also choosing to strike out on their own.  Today, nearly 30 percent of small business owners are women.  Their businesses generate $1.2 trillion last year. But they’re less likely to get the loans that they need to start up, or expand or to hire — which means they often have to depend on credit cards and the mounting debt that comes with them.

Those figures come from data I already was looking at on the question of what women own globally. Most recently, I took a shot at home ownership, with the surprising (to me) finding that women own (or are buying) more homes than men in America. No such luck with business ownership.

Women do own 29% of businesses, as of the Census Bureau’s 2007 Survey of Business Owners. But their share of business receipts — the total size of businesses, as measured by income — is much less: just 4%.

Source: My calculations from the Survey of Business Owners.

The survey defines ownership based on 51% of stock or equity.  So of course there are lots of women with partial ownership of all those other businesses. But the vast majority of businesses in the survey are tiny, with few or no employees. As a measure of wealth, then, owning a business is a bad indicator. Plenty of these people would make more money using their skills working for someone else, if they could (and investing their money in stocks).

Unsurprisingly, there is a distinct pattern of ownership by industry — that is, what the businesses produce. The only industry in which women own a majority of businesses is health care and social assistance, although they are also close in education (think daycare services):

Source: My calculations from the Survey of Business Owners.

Obama went on:

Just 3 percent of Fortune 500 CEOs are women.  Fewer than 20 percent of the seats in Congress are occupied by women.  Is it possible that Congress would get more done if there were more women in Congress?  (Laughter and applause.)  … I think it’s fair to say.  That is almost guaranteed.  (Laughter.)

For some reason this is often a laugh line. As in, “Am I right? Just ask my wife!”

Anyway, I would hate to judge Congressional effectiveness by the quantity of work done, and the evidence that women in Congress do get more done is not clear. But in the world of business our own research (here and here), as well as newer work, does suggest that U.S. women in workplace management positions increase the gender equality around them.