Black women in the C-suite are an endangered species, but before we bemoan the dearth of successful black women who climb to the top, consider that instead they may be hanging their own shingles. As National Minority Enterprise Development Week comes to a close, our leaders should pass tax cuts and reform our tax code to breathe new life into the entrepreneurial spirit of black women.
The pipeline of black women running Fortune 500 companies has run dry. Last year, Ursula Burns stepped down as CEO of Xerox leaving no black women at the helm of these leading companies. Twenty-six women (5.2 percent) lead S&P 500 companies, which is progress. Of this list Pepsi’s Indra Nooyi is the sole woman of color.
An absence of black female CEOs is being called a step back. I counter that it’s a step aside. Not every woman wants to climb the ladder in heels, some black women want to start their own businesses where they are the CEO on day one — and that kind of entrepreneurial spirit is needed for our communities.
As I wrote, entrepreneurship is the real #BlackGirlMagic. The proliferation of black women-owned businesses (BWOB) is startling as they make up the fastest-growing demographic of entrepreneurs coming out of the recession.
Black women own 1.5 million of 2.6 million black-owned businesses and employ nearly 300,000 workers. They are the only demographic of women to outpace their male counterparts (58.9 percent versus 39.3 percent).
Minority businesses represent nearly a third (29 percent) of all firms, but they face challenges of size and scale. Today, just 11 percent of them have paid employees. Black businesses also skew young. Some 14.3 percent of black- or African-American-owned businesses had been in operation for under two years, compared with 8.9 percent of all employer firms.
For most women-owned businesses and black-owned businesses, the firm was the owner’s primary source of personal income. Companies owned by black women lag behind their counterparts in revenue.
If we want to help these women to stay in business and foster an environment where they can expand, we must address funding.
Investment funding has been hard to come by for small firms even after the recession ended, but the challenge is magnified for minority-owned businesses. According to government data, they are 3 times more likely to be denied loans than non-minority businesses, more likely to pay higher interest rates, and get approved for lower loan amounts.
I’m glad President Trump continued the tradition of highlighting the contributions of minority-owned businesses this week. More important than an annual proclamation though is the White House’s commitment to the survival of small businesses in America.
Tax reform and promised tax cuts are critical to helping black-owned businesses thrive.
The White House framework for tax reform caps the small business tax rate at 25 percent and cuts the corporate rate to 20 percent.
Taxes matter to black female business owners. Georgia, Florida, and Texas are the three leading states for black women-owned firms — housing 428,000 (28.2 percent) of their businesses. New York and California round out the top five adding another 227,000 firms between the two of them. For black women in these two high-tax states, corporate and personal tax cuts will be needed relief.
For minority-owned business, this is an injection of capital to reinvest in growing their business. Female entrepreneurs can launch a new social media campaign to acquire customers, upgrade their computer equipment, or pay their employees and themselves a little more.
More than tax cuts, small business owners want to compete in a fair business environment.
Our tax code is laden with exemptions, credits, and deductions that favor some corporate constituencies, which are moneyed and connected enough to lobby for special treatment. A whopping eight out of ten of small business owners (85 percent) feel that the current tax code unfairly benefits large corporations over small businesses.
Tax reform can be an equalizer for small business owners and large companies to compete in the marketplace with the best products and services. As consumers, we win from better products at lower costs, but small business owners can get ahead.
Black women are contributing to the nation’s prosperity though their businesses which are as diverse as hair extensions and home health aids. As their businesses grow, they create new pathways to wealth accumulation for the black community. Congress has a chance to spur these entrepreneurs forward by passing tax and tax cuts, let’s hope they take it.
Patrice Lee Onwuka is a Senior Policy Analyst at the Independent Women’s Forum and a contributor to Bold Global Media. Onwuka has worked in the advocacy and communications fields for more than a decade. Prior to joining IWF, she served as national spokeswoman and communications director at Generation Opportunity, and worked at The Philanthropy Roundtable and the Fund for American Studies in policy and media roles. She was also a speech writer for a United Nations spokesman. Onwuka is a regular guest on Fox News, Fox Business News, MSNBC, and PBS programs. Her writing has appeared in The Washington Post, The Hill, Bloomberg, The Washington Times, the New York Post, the Christian Science Monitor, and other outlets. She holds a bachelor’s degree in economics and political science from Tufts University and a master’s degree in economics and international relations from Boston College. Follow her @PatricePinkFil. To read more of her reports — Click Here Now.
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