Volume 5, No.2
Summer 1999

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Archive Articles:
Women in Business: 9.1 Million Women-Owned Businesses in the US

Illinois Wineries: A Growth Industry

Mass Layoffs

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Women in Business: 9.1 Million Women-Owned Businesses in the US... And Still Growing
By: Lee F. Sundholm

A Note from IDES Director Linda Renee Baker:

In the Spring 1997 issue of the Illinois Labor Market Review, Dr. Sundholm reported on the expanding role of women in business. In light of new data recently published both for women in the labor force and as entrepreneurs, including information on the emergence of minority women as entrepreneurs, the need arose for a follow-up article to update previous data. As we approach the new millenium, more women are starting businesses than ever before—with many entering non-traditional industries. I want personally to call to the attention of our readers, the importance of this little-known demographic fact of the economy.

Women in the Labor Force -- An Update

As previously reported in the Spring 1997 issue of the Illinois Labor Market Review, the U.S. Department of Commerce found that in 1970, 38 percent of the 82.7 million-person labor force was made up of women. By 1994 this number had climbed to 46 percent of the labor force which was then 131 million. In 1997, women's numbers increased to 46.1 percent of the labor force of 136.3 million, and by 2006, it's projected that women will account for 47.4 percent of a 148.8 million-person labor force.

Not only are the numbers of women entering the labor force increasing, but their participation rate is also rising. The participation rate is a measure of the percentage of the working age population in a given group who are in the labor force, not a percentage of the total population of that group. In 1970 the participation rate for women was 43.3 percent, by 1994 it had risen to 58.8, in 1997 it was 59.8, and by 2006, projections put this number at 61.4 percent. Comparable participation rates for men in the same years are 79.7 percent, 75.1, 75, and a projected 73.6 percent, respectively.

High Participation by Black Women

The U.S. Department of Labor Women’s Bureau found that Black women historically have had higher participation rates than both White and Hispanic women. In 1980, Black women had a participation rate of 53.1 percent, White women 51.2, and Hispanic women 47.4. By 1990, these rates were 57.8, 57.5, and 53 percent, respectively. By 1998, Black women had a participation rate of 62.8 percent, White women 59.4, and Hispanic women 55.6. All three groups of women have increased their presence in the work force.

Table 1
Of the nearly 63 million women in the labor force in 1997,
53.4 million were employed in three occupational categories

Women in Management -- An Update

The Managerial and professional specialty classification has two major components: Executive, administrative, and managerial, and Professional specialty. Managerial-type jobs are in the former category. In 1983, women represented 34.2 percent of the managerial-type jobs, and in 1997 they represented 44.3 percent. Professional specialty includes such occupations as architects, engineers, mathematical and computer scientists, natural scientists, and teachers. Of the professional specialty group, women were 48.1 percent in 1983 and 53.3 percent in 1997. According to the Bureau of Labor Statistics (BLS), women’s earnings are the highest in the Managerial and professional specialty category, currently $655 per week, compared to $419 in the Technical category, and $296 in Services.

From 1983 to1997, women’s employment has grown fastest in the managerial jobs category. In fact, in April of this year, the BLS reported that 46.4 percent of workers in the Executive, administrative, and managerial classification were women. Table 2 focuses on this classification. Looking at Table 2, we see three areas (see 1997 percents shown in bold) in which the percentage of women had declined between 1994 and 1997, although their absolute numbers have increased. This change is not necessarily a trend. In all the other categories, the percentage of women has continued to increase.

Women as Employers -- An Update

The National Foundation for Women Business Owners (NFWBO) is the non-profit research and leadership development foundation established by the national Association of Women Business Owners. According to a NFWBO publication, Women-Owned Businesses in the United States: 1999 A Fact Sheet, there are currently 9.1 million women-owned businesses in the U.S., representing 38 percent of all firms. Fifty-one percent of these firms are in Services, and 28 percent are in finance/insurance/real estate and retail trade classifications (the Technical, sales, and administrative support category).

Women-owned firms employ 27.5 million people, and account for $3.6 trillion in sales. According to NFWBO estimates, from 1992 to the present employment at these firms increased by 108 percent, sales advanced by 132 percent, and the total number firms rose by 42 percent.

The report states that women are "diversifying into non-traditional industries." From 1992 to the present, women-owned firms expanded by 68 percent in construction, 65 percent in wholesale trade, 61 percent in transportation/communications/public utilities, 59 percent in agriculture, and 54 percent in manufacturing.

Illinois Ranked Fifth by NFWBO; Chicago Metro Area Is Third

In Illinois, there are nearly 385,000 women-owned firms, or 38 percent of all firms in the state. Sales are close to $195 billion and over 1.4 million persons are employed. From 1992 to the present, sales have increased by 139 percent, employment rose by almost 117 percent, and the number of women-owned firms advanced by just over 41 percent. NFWBO uses an average ranking system based on the number of firms, employment, and sales. Illinois ranks fifth among all states, in fact, in all three categories.

Women-Owned Firms In Illiniois Highest in Construction

The NFWBO reports that 50 percent of women-owned firms in Illinois are in Services, with 17 percent in retail trade. From 1992 to 1999, construction firms grew by 75 percent, transportation/ communications /public utilities by 62 percent, wholesale trade by 59 percent, retail trade by 35 percent, and services by 36 percent.

The NFWBO’s research summary, "Women-Owned Businesses Thrive in Nation’s Top 50 Metro Areas," (citing the NFWBO report, 1999 Facts on Women-Owned Businesses: Trends in the Top 50 Metropolitan Areas), states that for the 50 largest MSA’s, there are nearly 4.6 million women-owned firms, employing over 15.4 million persons, with sales of over $2.1 trillion.

Based on NFWBO’s average ranking system, Chicago is ranked as the third largest metropolitan area "in the number, employment, and sales of women-owned firms," after New York and Los Angeles. Between 1992 and 1999, according to the report, the number of these firms in Chicago increased by 46 percent, employment rose by 126.6 percent, and sales by 148.5 percent.

Women-Owned Firms Now Number Nearly 385,000 In Illinois

Women-Owned Firms In Illinois Growing At About The Same Rate As National Average

Women-owned firms have expanded fastest in the "non-traditional" sector including agribusiness, construction, and manufacturing. Currently, Chicago has 260,200 women-owned firms, employing over 1.1 million persons, with sales of $161.2 billion. Women-owned firms represent 38 percent of all firms in Chicago, matching statewide and U.S. data. See Table 3.

Growth in the nation, Illinois, and especially in Chicago, remains strong for women-owned firms.

Minority Women-Owned Firms Increase Three Times Faster Than Other U.S. Businesses

According to the NFWBO research summary, "Minority Women-Owned Firms Thriving," (citing the organization’s report, 1996 Facts on Women-Owned Businesses: Trends Among Minority Women-Owned Firms), minority women-owned firms grew by 153 percent, employment increased by 276 percent, and sales expanded by 318 percent from 1987 to1996.

Between 1987 and 1996, firms owned by Hispanic women increased by 206 percent. Those owned by Asian/American Indian/Alaska Native women rose by 138 percent. Black women expanded their ownership of businesses by 135 percent.

This report indicates that expansion in minority women-owned firms has been in "non-traditional sectors," similar to what we saw above for Illinois. For example, between 1987 and 1996, there was a 319 percent increase in these firms within the construction industry, 276 percent expansion in wholesale trade, and a 253 percent increase in the transportation/communications/public utilities area.

Minority women own nearly 1.1 million firms throughout the U.S. and their numbers are expanding three times faster than business growth in general across the nation. Minority women-owned firms employ almost 1.7 million people, and account for over $184 billion in sales. Under NFWBO’s average ranking system, based on the number of firms, employment, and sales, Illinois ranked fifth among the 50 states for minority women-owned businesses and Chicago was fourth among the top 50 metropolitan areas.

Education and Knowledge

Education and training will continue to be important for workers now and in the future. The economy is being shaped by the technology of information (IT): the use and sharing of information and knowledge. All workers will not necessarily be in Peter Drucker’s "knowledge worker" category (see "Women in Business" in the Spring 1997 issue of the Illinois Labor Market Review, page 7), but people will be required to work with the equipment and processes (the hardware) which this technology has brought us. In order to do this, workers will have to be more highly trained and educated. In this way, the software will not only be programs and systems, but also the knowledge contained in people.