Spread the word: Starting a business is job creation.

By Shelley Hughes, Summer Fellow

“If one in three microbusinesses were to hire a single employee, the U.S. economy would achieve full employment.“

– Association for Enterprise Opportunity (AEO)

Job creation remains a hot topic in this year’s presidential election as our nation continues to tackle the unemployment crisis. At Women’s Initiative we are well aware of how microbusiness development can positively affect job growth and job creation. After all, within five years of graduating from Women’s Initiative, our clients create an average of 2.5 jobs for others.

So how can we keep track of policy issues that will keep entrepreneurs top of mind when politicians talk about job creation? Thankfully the Association for Enterprise Opportunity (AEO) makes it their mission to keep us informed on relevant issues as they advocate for policy change to support entrepreneurs.

AEO lists the following legislative proposals as key initiatives they are supporting this summer:

• The Microenterprise and Youth Entrepreneurship Development Act (H.R. 2809), introduced by Rep. Cedric Richmond (D-LA), would strengthen the SBA’s PRIME Program and create one single access point for information on the government’s business assistance programs.
• The Entrepreneur Startup Growth Act (H.R. 3571), introduced by Rep. Judy Chu (D-CA), would provide grants to nonprofit microbusiness development organizations to provide tax preparation services to disadvantaged and underserved entrepreneurs.
• The Entrepreneur Access to Capital Act (H.R. 2930/S.1970), the “Crowdfund Act” would ease and simplify reporting requirement for small value investors for certain crowdfunded securities in small businesses.

Interested in helping push for this legislation? This summer the AEO released an advocacy toolkit that outlines how individuals and organizations can take part in the dialogue. Best practices and tips for engaging with elected officials is covered in more detail in AEO’s Engage and Empower Toolkit, which can be found here.

A Win-Win-Win Collaboration – Circle Bank and Women’s Initiative

By Elizabeth Krueger, Summer Fellow (@elizlk)

You may have heard that Women’s Initiative partnered with Circle Bank to make loans to Women's Initiative graduates. Now in its second year, the program is expanding, and is a win for all concerned. Why does this partnership make so much sense?

Under Community Reinvestment Act (CRA) regulations, banks are required to provide a portion of their investments/services to underserved communities in areas where the banks do business. This can range from helping to finance low-income housing projects, to providing low-fee services.  Microlending can also meet CRA requirements, but the effort to do underwriting (background & credit checking, and business plan due diligence) can outweigh the small loan amounts, which range from $1,000 to $50,000 currently. (Typical bank loans tend to start at $500,000.) The bank regulatory requirements for tracking the risks of their loan portfolios can also add to costs. These combined underwriting and regulatory costs discourage banks from microlending as part of their CRA activities.

In the Circle Bank partnership, Women’s Initiative is able to offset the underwriting costs. The Women's Initiative financial services team does the necessary work to ensure the borrower meets the agreed underwriting standards, and provides the documentation to Circle Bank.  Because Women's Initiative has an existing relationship with the borrowers, the underwriting effort required is lower than if the bank were to do it directly, so the process overall is more efficient.

Through the Circle Bank/Women's Initiative partnership, more Women's Initiative graduates have access to appropriate loans for starting or expanding businesses. This increases the impact of women in their communities and families, helping more women on the way to economic self-sufficiency.

It’s a win-win-win proposition that more banks and microenterprise service providers should consider: 

• Circle Bank wins by meeting CRA needs and helping grow its customer base

• Women’s Initiative wins by meeting financing needs of more graduates by providing underwriting at lower costs than banks could 

• Women’s Initiative graduates and their communities win by getting access to capital for new and growing businesses, and the positive ripple effects they generate.

First Open Air Marketplace Attracts Visitors from All Over Concord

Author: Guest blogger, Mechthild von Knobelsdorff, SuccessLink Fellow

Sharon Plousha selling her delicious cookie

Sharon Plousha could not even take a small break – she had just celebrated her graduation from Women's Initiative's Simple Steps program the evening before when she sold her own cookies at the Open Air Market Place in Concord. She was one of 22 local women to exhibit the products of her local business. The range of products was accordingly broad. Visitors could buy products as diverse as sweets, wine, jewelry, special barbecue sauce or a photographer's service. Entering one of the rows of nicely decorated stands, they could already smell the beautiful bees wax candles Jan Schubert crafted. On the other side, Perry's Catering helped to keep bellies full and minds happy as the time passed by. Visitors lined up to taste some of the barbecue and potato salad prepared by the graduate. The next stand invited visitors to enjoy delicious desert of fruit salad and Mexican ice creams.

Barbeque from Perry's Catering

People from all over Concord came to attend this special event, and business people around Water World California used their lunch break to buy a nice gift for Mother's Day, wander around, and eat something. They enjoyed the experience of the market as all vendors were extremely friendly and they had the special feeling that their money would stay in their community. Moreover, the sun broke its way through the morning clouds and warmed people's souls. For Jan's bees wax candles, it almost got too hot, causing them to sweat slightly. “This will give them a nice polish tomorrow,” Jan said.

Jan Schubert's beeswax candles

Surprisingly for many visitors, the open air marketplace was the first of its kind. Very well organized and well attended, the event was a huge success. Sharon sold almost all of her cookies. Her new clients are surely waiting for the next market place already.

Productive Economy ≠ Higher Living Standards

Author: Allyson Stewart, Research & Public Policy Fellow, Women’s Initiative


In a recent issue brief, “The wedges between productivity and median compensation growth,” Economic Policy Institute President Lawrence Mishel debunks a common misconception: Increased productivity growth in the American economy does not benefit the average American. Instead, productivity gains have translated into exacerbated income inequality.


“We are often told that greater competitiveness and higher productivity are the keys to higher living standards,” said Mishel. “In fact, productivity growth only establishes the potential for improved standards of living. In the past four decades, and especially recently, it has not translated into proportionate gains for working families.”


The brief highlights a major divergence between productivity growth (growth of the output of goods and services per hour worked) and compensation growth for the average worker that has contributed to rising income inequality over the past thirty years and in particular the last decade. According to the brief, “Productivity in the economy grew by 80.4 percent between 1973 and 2011 but the growth of real hourly compensation of the median worker grew by far less, just 10.7 percent.” The figure below shows the rising gap between productivity and compensation:





The brief attributes this phenomenon to three causes: The rising inequality of compensation, the erosion of labor’s income share (and corresponding increase in capital income’s share), and a more minor cause, the deterioration in “labor’s terms of trade.” Essentially, firms are making more money, but not sharing it equally, or even close to equally, amongst workers. Instead, most of the gains are going to the highest paid employees and shareholders, and at the same time the cost of goods workers purchase are going up faster than their wages increase. Unless productivity gains are distributed more equally, those gains will continue to exacerbate income inequality.


At the Women’s Initiative for Self Employment we create opportunities for working class Americans to create better paying jobs for themselves, build assets, and make greater investments in labor (as opposed to capital) through small business ownership. Just one year after graduating, our clients' average household income leaps from $22,008 to $34,980—an increase of nearly 60%. Graduates also double their rate of home ownership in the two years after training, and their average household net worth grows by more than 300%, from $12,968 to $53,572. In keeping with The Andersonville Study of Retail Economics finding that local businesses spend 28 percent of revenue on labor compared to 23 percent for chains stores, we find that our graduates consistently make significant investments in their workers - Women’s Initiative graduates provide an average of 2.5 jobs through their businesses and pay an average wage of $16.45 per hour—more than double the federal and State minimum wage. These outcomes suggest that increased investment in microenterprise training and support offered by organizations like the Women’s Initiative could help close the gap between productivity growth in the U.S. economy and the well-being of the average worker.