“Women- and Minority-Owned Businesses” Is a Meaningless Category

Posted by Miriam Axel-Lute on February 26, 2015

How many times have you seen the phrase "women- and minority-owned businesses" or seen an organization list a single number to account for all the "women- and minority-owned businesses" supported?

If you've been reading the same things I have, I'm guessing the answer is at least occasionally.

Now, I expect that most of those organizations are actually keeping track of the two things separately. I know that programs to increase diversity in subcontracting generally have different and separate target percentages for each.

And yet they are also too often conflated when they are reported publically.

For example, New York state agencies set separate targets for each category, but you wouldn't know it from most of the material online, which treats MWBE (minority- and women-owned business enterprises) or SWaM (small, women, and minority) as singular categories. I've seen articles that are all about the challenges of lending to people of color drop the "women- and" in at the end as if it were the just the fuller name for the phenomenon in question, and research treating them as one category. 

I am reminded of a discussion at the community advisory committee for the land bank of Albany County, on which I sit. As we discussed trying to make sure that contractors working on land bank properties (and their hires) came from the neighborhoods affected as much as possible, the executive director mentioned that W/MBE guildelines (women and minority business enterprises) would automatically be in effect because the land bank is a public authority. An African-American woman from one of our focus neighborhoods expressed doubt, noting that she's seen the same old suburban companies just "stick a white woman on there" as a figurehead and get the credit. She sensed a gulf there so wide as to be laughable.

Whether or not that would have actually been allowed to trump any minority-owned contracting preferance or not, the way they get lumped together certainly gives that impression.

Supporting women enterpreneurs and entrepreneurs of color are both important goals. Of course they are not mutually exclusive categories either, so anyone working on either should be aware of both sets of challenges and how they interact and compound each other.

But they are also different. Women and people of color have different kinds of obstacles and histories of exclusion and stereotypes leveled at them in the business world. A middle-class white woman trying to earn respect running a tech company or carpentry shop is a completely different kettle of fish from the person of color turned down for a loan and cut out of business social networks because of a history of systematic redlining and discrimination.

(Women are also not segregated geographically the way people of color are, so women-owned businesses' role in place-based economic development work is different.)

That which gets measured gets done. And perhaps even more so that which gets measured and reported on. If we don't conscientiously sort out these two very different aspects of what we're doing, perhaps we should not be surprised if one or the other of those goals might suffer. Perhaps one of the reasons that the field is not doing as well as it wants to be doing in lending to business owners of color is that fuzzy data, or a lack of commitment to making any of the breakdowns public at all, has sometimes been hiding how poorly it's doing? (Note: This is not universal. Some groups do in fact make these breakdowns public, and government seems to be the greater offender in conflating them.)

A community lender that does micro-enterprise business lending and nonprofit affordable housing lending would never report those loans in the same bucket in describing its impact, even if they overlap somewhat in terms of creating jobs and opportunity and are both "mission appropriate."

I think it's time that we consider not lumping "women- and minority-owned businesses" together either.

(Photo credit: Flickr user gaelx, (CC BY-SA 2.0)

About the author more »

Miriam Axel-Lute is editor of Shelterforce and associate director of the National Housing Institute. Her email is miriam at nhi dot org.

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COMMENTS

Stella Adams
3 Mar 15, 10:05 am

While I agree that there is some conflation in the reporting the issue is NOT what you call the category but rather the Aggregation of the information.  Rather than cries for dismantling categories or decoupling categories.  Let’s focus on demanding transparency in the current reporting methodologies through disaggregation of the existing data.

When the AVERAGE woman owned business in America represent only 28.8% of all businesses despite the fact we comprise 50% of the population and black owned businesses represent 7.1% of all businesses when we comprise 13% of the population. When the average woman owned business gross receipts are less than $50,000, I am less concerned about the labels and more concerned with the lack of real effort made by government contractor’s and government agencies to fulfill their commitment to support and encourage these business sectors.

By focusing on the labels instead of the data points you want to see you confuse the issue.

I want to see how many “independent contractors” are included in the aggregated total.  Many “independent contractors” are essentially employees but are treated as “independent contractors” in an attempt to avoid Davis-Bacon requirements. The result, many “independent contractors” ended up making LESS than minimum wages for their work.  In North Carolina alone this resulted in nearly 1/2 billion in wage theft.

I want to see what the average sub-contract amounts are broken down by race, ethnicity and gender.

I want to see what types of contracts and sub-contracts are let by race, ethnicity and gender.

I want to see how many people are employed by the Prime, and the Sub-primes and I want this data by type of job (executive, managerial, supervisory, skilled, administrative, unskilled, etc.) broken down by number of positions, race, ethinicity, and gender.

Let’s talk data points not labels.

Marc Brenman
3 Mar 15, 10:33 am

Of course the category is not “meaningless.”  The meaning is that these are traditionally discriminated against groups.  The objection seems to be disaggregating reporting statistics.

Miriam Axel-Lute
3 Mar 15, 6:53 pm

Yes, I agree with you both, my point is that the problem is lumping the two together and using it as one category without the data disaggregated. Not in describing a business as either or both women-owned or minority-owned, which is clearly relevant. But telling us just one number for both obscures how you are doing on supporting either.

And good point about the independent contractors, Stella. That too would be a good thing to disaggregate.

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