Research Summary

Business Owners and Gender Equity in the Workplace

Center for Women’s Business Research  ·  September 19, 2000

Gender Composition of the Workplace In general, the gender composition of the workforce employed by women and men business owners shows significant differences. Women business owners employ roughly half women (52%) and half men (48%). Thus, the gender composition of the workforce in women-owned businesses displays gender equity. Men business owners, on the other hand, employ only 38% women and 62% men workers, on average. Thus, the workplace of men business owners favors men by nearly 2 to 1.

Industry Differences As one would expect, both women and men business owners employ women workers at rates that vary by industry. For example, the workforce of women business owners in goods-producing industries (such as agriculture/forestry, mining, construction, and manufacturing) is just 30% female. In personal services, on the other hand, women employees account for three-fourths (76%) of the workforce in women-owned businesses.

Nonetheless, women business owners, regardless of industry, employ women at somewhat higher rates than the national average and by significantly higher rates than do men, who fall below the national average in most industries. In wholesale and retail trade, women business owners employ women at a rate 11% greater than the national average, and 20% greater than men business owners. In fact, in

6 out of the 7 industry groupings, women business owners employed women at a rate greater than the national average.

Men business owners, on the other hand, employed women at a rate lower than the national average for most industries. This under-average employment of women occurred in goods-producing (-8%), wholesale and retail trade (-9%), personal services (-20%), and finance, insurance and real estate (-2%). Only in business services and transportation, communications and public utilities did men business owners employ women at a rate above the national average. Also, the employment practices of men business owners were further from the national average than those of women business owners in 5 of the 7 industry groupings.

The Size of the Business and the Workforce The gender differences in the workplace composition remain, regardless of the size of the business. While women-owned businesses earning less than $250,000 a year employ 53% women, those earning over $1 million employ a similar percentage, 51%. In men-owned businesses, however, the employment of women appears to decline as the size of the business increases. Men-owned businesses earning less than $250,000 a year employ 44% women; those earning between $250,000 and $999,999 employ 37%; and those with revenues over $1 million employ only one-third women (35%).

Study Methodology

Survey packages were mailed in mid-March 1997 to a random sample of men-owned and women-owned businesses throughout the United States, as identified by Dun & Bradstreet Information Services. Twenty-thousand surveys (20,000) were sent to men-owned firms and 5,000 were mailed to women-owned firms. Nearly eight hundred (777) surveys were returned before the cutoff date and were included in the analysis. Prior to analysis, the data were weighted to the correct gender proportions of ownership: 36% women-owned firms, 64% men-owned.

Respondents were asked how many employees their primary business employed, not including themselves. Six hundred and seventy-four (674) business owners indicated their gender and employed 1 or more workers: 243 women business owners and 431 men business owners. The sampling error for survey of N=243 is ±6.3%, and N=431 is ±5%, at the 95% confidence level. This means that, 95 times out of 100, survey responses are within 6.5% and 5% of true population values. This sample of 674 business owners was used in this analysis.

Stratifying the data by industry results in a small sample in some of the categories. Only 5.5% of the owners run a business in the personal services industry and 5.9% in transportation, communications and public utilities. Thus, these two samples may not be indicative of the general population, and further research is needed to examine the gender composition of the workplace in these industries more closely.

The national average was obtained for each specific industry using the Labor Statistics from the 1997 Current Population Survey. This data is available on the Bureau of Labor Statistics’ web site (http://stats.bls.gov/). The percentages were calculated from the annual employment levels of women wage and salary workers (16 and older) with respect to the total employment level. The category of “Business Services” utilized the data in the Current Population Survey for “Business and Repair Services”, and “Other Services” data was compiled from the categories of entertainment, professional, medical, education, welfare, and other services.

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