By Rebekah Rast
When President Reagan signed into law The Women’s Business Ownership Act, H.R. 5050 in 1988, many wonderful changes began to happen to women-owned businesses.
The U.S. Census Bureau states that the number of women-owned businesses reached 6.4 million in 1992, representing one-third of all domestic firms and 40 percent of all retail and service firms. Businesses owned by women generated $1.6 trillion in business revenues and employed 13.2 million people.
Today, women are starting businesses at twice the rate of any demographic. About 23 million Americans are employed by women-owned businesses and they contribute nearly $3 trillion in economic activity.
These small businesses are what make America prosperous and profitable. With new laws being passed by this Administration on top of other policies already in place, this trend may begin to falter. Until the president turns his focus to cultivating a prosperous environment for entrepreneurs, this industry will continue to suffer and the recession will carry on.
“Policies like climate change, Cap-and-Trade legislation and a whole range of different taxes being proposed to fund specific interests and new programs are barriers to entrepreneurs,” says Karen Kerrigan, President and CEO of Small Business and Entrepreneurship Council (SBE Council). “There is a dark cloud casted over our country in terms of entrepreneurship.”
Kerrigan explains that there are two different kinds of small businesses being started in America today, those out of necessity and those out of opportunity. “When women start businesses out of necessity they are not built for the long term or growth,” she says. “If the business starts out of opportunity, then these are the types you like to see—they are viable, create more jobs and add more to the economy.”
Since our economy is bad and people are losing jobs, small businesses are starting out of necessity. And with new taxes and regulations on the horizon, the situation is only going to get worse—women-owned businesses will suffer even more.
Louann Livengood owns her own business called What a Stitch, LLC, in Mount Airy, Maryland. As her love and talent for embroidery grew, her business grew out of her garage to a space boasting 50 commercial sewing heads and two 10-hour shifts a week. The exact kind of job creation that has historically made our nation’s economy thrive.
When the economy plummeted in 2008, Livengood had to cut employee benefits and reduce the amount she contributing to their retirement funds. Livengood herself doesn’t even take home a paycheck after all the business costs are paid. In fact, the state of Maryland just increased its unemployment tax more than three times the amount it was for 2009, an amount Livengood has to pay even though she’s never laid anyone off.
She says that state and federal laws and regulations are only hurting businesses. “They are detrimental to small businesses. It’s designed to ruin small businesses,” she says.
Women have been in a constant battle in the workforce through the years facing such issues as equal pay between men and women and being taken seriously in the workplace. Now current policies are making owning a small business even more difficult.
ObamaCare is one law that includes many provisions that are harmful to women entrepreneurs as previously reported by Americans for Limited Government (ALG). Many are hopefully that the health care bill gets tossed out or reformed at best.
“The health care legislation makes it much more difficult to be a business owner,” Kerrigan says. “If you are self-employed you know there is a small cost, but now you have a new tax—you have to have insurance, whether you can afford it or not.”
The tax mandates become even worse if you try to grow your company.
“What you instill in women when they start a business is a vision for growth,” Kerrigan says. “If you grow now, you’ll be penalized for that.”
Health care isn’t the only new barrier women will have face when starting a business. “On the tax side there needs to be some certainty,” Kerrigan says. “There are some taxes that are about to expire, capital gains and income investments, and a lot of taxes are going up in the near future. The Administration needs to build soundness in the system.”
With an ever-changing tax code, starting a business can be a big risk for anyone. Women though often face other obstacles that may not be quite as obvious.
Access to government contracts for a small business owner can be tenuous and often expensive, yet very beneficial for a small business. However, the Obama Administration’s push to force government contracts to companies with organized labor agreements disproportionately hurts women business owners attempting to compete on a level playing field.
“Preferences go to labor-agreement firms,” Kerrigan says. “This works directly against women-owned businesses ability to compete for contracts. It’s them saying one thing and doing another.”
The Administration is well on its way to working women-owned small businesses out of business.
“This Administration needs to understand the importance of small businesses, and the impact they have on job creation,” says Bill Wilson, president of ALG. “As more and more women are starting new businesses, Obama’s war on these businesses in effect is a war on women’s independence.”
Small businesses are the engine that runs our nation. If the Administration continues to create more laws and regulations that make it increasing difficult for small businesses to survive that engine will stop.
America has an unemployment rate of 9.9 percent, record federal deficit and debt; these will continue to grow unless small businesses are given the freedom to flourish. Women are growing businesses quickly and successfully. It is best for our nation to let that continue.
ALG Editor’s Note: To read Part I of this series, click here.
Rebekah Rast is a contributing editor to ALG News Bureau.
