Business in America is undergoing fundamental change. We are 30 years into the Information Age, which emerged nearly a century after America’s Industrial Revolution. Recently, The History Channel aired a miniseries entitled “The Men Who Built America,” offering an in-depth and provocative look at historical figures that shaped America’s future, and served as the bedrock of her dominance for decades to come. This begs an important question: What about The Women Who Built America?
Historically, people have often failed to recognize the important role that women have played as key contributors to the American business sector. With March being “Women’s History Month”, this is a good time to remind ourselves of the importance of women to America’s dominance, and of advancements they have made over time. In doing so, we must bring to light the challenges that they continue to face, and propose solutions for the future.
The Industrial Revolution doesn’t happen without the emergence of women in the labor force. The Revolution was in no way the beginning of work for women. Rather, the Revolution was the beginning of a slow, arduous process towards change for them. With industrialization came a shift from home offices towards factories, and although a lot of the work that women did throughout the Revolution did not change, their effective roles in society, and at home, began to.
This is because the Industrial Revolution provided them with the opportunity to enter the paid workforce. Now, let us not forget that the Industrial Revolution was infamous for its poor working conditions, which, I must note, were arguably worse for women. The truth, though, is that for industrialization to succeed, the contributions of women were an economic necessity. In fact, this development was more than likely an inevitability created by the reluctance of many of their male counterparts to do ruthless factory work under someone else’s management. However, this waged work allowed many American families to sustain a better standard of living that would otherwise have been unattainable, and set the foundation for the gradual ascension of the role of women in society.
Hardship was a key theme for women in the years that followed the Industrial Revolution, however several movements ensured continued progress. By 1869, the National Woman Suffrage Association was created, setting the stage for women to gain voting rights in 1919. This was arguably the greatest step towards gender equality ever seen in the United States, and set the stage for a century of significant progress for women in America.
Soon after came the roaring twenties, and the emergence of “The New Woman”, as personified by the flapper. Throughout the decade, women built on their newfound freedoms and began to adopt key roles in many white-collar jobs. Although much of this progress was partially stunted by the emergence of the Great Depression, the period surrounding World War II advanced their role in the American economy.
With some 200,000 women entering the military services, and even more entering the labor force, women were taking on jobs traditionally filled by men, becoming anything from lumberjacks, to crane operators, to toolmakers. Here, women were truly fueling the war effort from home. Productivity in factories was rising, quality had reached unprecedented levels, and production times were reduced. By 1950, the labor participation rate of married women nearly doubled the rate seen in 1940, and the American labor landscape was undergoing a significant cultural shift.
No woman characterized this decade of progress more than Rosie the Riveter, a strong character still revered today for her exemplification of the fact that women must try new things, test their limits and believe in themselves.
Although many women returned to their domestic occupations after the war, a substantial number also remained, playing key roles in industries previously reserved for men.
In the decades following the war, women began play important roles as entrepreneurs in the American economy. By 1945, Ruth Handler had founded Mattel, before forever changing American culture with the creation of the Barbie doll in 1959. In 1951, Brownie Wise was named the Vice President of Tupperware Home Parties, running the sales division of the company, and becoming the first woman to grace the BusinessWeek cover in 1954. By 1972, Katharine Graham of the Washington Post became the first female CEO of a Fortune 500 company, and women owned 4% of all American business. This figure had climbed to 38% in 1991, and represented the employment of 27 million workers and $4 trillion dollars in cumulative sales.
These developments did not occur without struggle, however. One key obstacle in the way of women in business was their inability to gain access to capital. Despite the passing of the Equal Credit Opportunity Act of 1974, approval rates to women seeking business loans have since been significantly lower than those for men. In fact, on average, women today start their businesses with half as much capital as their male counterparts. This inexplicable disparity serves as a reminder that gender, keeping all other factors constant, remains an important determinant of access to capital. And yet, despite this financial reality, women-owned and women-led firms have reported higher levels of financial performance compared to exclusively male-owned firms.
Recognizing this disparity and the financing gap for women business owners, a multitude of online lending platforms have emerged to try and make these facts a distant reality. Leaning on technology, which is a great democratizer by virtue of its agnostic nature, online lenders are better able to analyze data and increase the chances of providing business loans to women that have otherwise been traditionally excluded from financing. This development has the potential of replacing the process of walking into a bank and facing the unfair reality of rejection for a loan request.
Such innovations can bridge the financing gap, and thereby lead to greater parity across the business sector. A higher emphasis on the establishment of a transparent meritocracy will unlock a slew of business opportunities that have traditionally been withheld from women entrepreneurs. Lowering such barriers to entry and to accessible finance for women could hold the key in shaking up a business sector that has come a long way, but still has much room to grow.
It is developments like these that will inspire a new wave of important contributions from women to the American economy. Women have continually displayed impressive resilience in the face of societal resistance, and it is time that the business community removes all unequal obstacles in the way of our mothers, daughters, and S&P 500 CEOs. The emergence of initiatives like online lending are a good start, but much work remains to be done.
Michael Finkelstein is CEO and Founder of The Credit Junction, an online lending platform that helps owners of small and midsized businesses grow their companies by providing fast, flexible and efficient access to as much as $5M in capital.