“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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