A new report by the Center for American Progress has shown that women of color are a major driving force in the United States economy by virtue of entrepreneurship. Women of color own about one-third of all women-owned firms in the U.S. Between 1997 and 2013, the number of female-owned firms and businesses in the U.S. grew by 59%, African-American women-owned businesses grew by 258%, the highest of any racial group. This increase in entrepreneurship has been attributed to inequalities and challenges faced by women of color in the traditional workplace. Some of these challenges include limited access to mentors, exclusion from elite networks, and gender wage gap. In 2012, African American women made 64 percent of their white male counterparts’ wages, compared to Latino women (53%), Asian women (87%), and White women (78%).
While there has been major growth and success experienced by African American women in entrepreneurship, challenges still remain. Almost half of all African American women business owners reported facing challenges in trying to obtain business financing. Research has shown that women are less likely to receive loans compared to their male counterparts. Also, minority-owned businesses encounter difficulties in receiving loans from financial institutions, compared to white-owned business. This puts African American women business owners in an extremely difficult and daunting predicament with being both a woman and a racial minority. Reducing prejudices and inequalities, especially in the financial sector, will help foster a successful and fruitful environment for African American women in the entrepreneurship sector.
Adedotun Ogunbajo, Joint Center Graduate Scholar, Johns Hopkins School of Public Health