Fact Check:Charting Growth Of Women-Owned Businesses

By W. Gardner Selby
Austin American-Statesman.

In an email blast, Greg Abbott’s campaign said Texas businesses owned by women have flourished with Barack Obama in the White House.

But Abbott, the attorney general and Republican gubernatorial nominee, wasn’t saluting the Democratic president.

In the email, Kim Snyder, Abbott’s deputy campaign manager, called Texas the “land of opportunity — especially for women.”

Texas does better than other states, Snyder wrote, adding, “Let’s compare: the growth rate of women-owned businesses in Texas has nearly doubled that of the nation since President Obama has taken office.”

A reader, bringing the email to our attention, wondered about those growth rates.

Abbott spokesman Avdiel Huerta told us Abbott’s near-doubling reference was based on reports by American Express OPEN, which American Express describes as the leading payment-card issuer for small U.S. businesses.

According to the 2013 State of Women-Owned Businesses Report, Huerta said, there were 8,617,200 woman-owned U.S. firms, including 737,300 in Texas, in 2013. In 2007, AMEX said there were 7,793,139 woman-owned firms nationally and 610,007 in Texas, Huerta said.

Those numbers were the basis for the percentages cited in the email. But we noticed one problem immediately: The beginning date, 2007, was two years before the start of Obama’s presidency.

The report, we found, was based on an outside firm’s extrapolations starting from U.S. Census Bureau business surveys taken every five years; the government’s latest available figures trace to the 2007 surveys.

Nationally from 1997 to 2013, the report said, the number of women-owned firms increased by 59 percent — and women-owned firms in Texas increased by 93 percent, the second-highest growth among the states behind the 112 percent surge experienced in Georgia.

Nationally, women-owned firms account for 29 percent of all enterprises, the report said, but women-owned firms only employ 6 percent of the country’s workforce and contribute just under 4 percent of business revenues — roughly the same share they contributed in 1997.

To our inquiry, the Michigan-based researcher behind the report, Julie Weeks, said the growth in women-owned businesses in Texas has outpaced growth nationally, but it’s meaningful to look at how states compare in the number of employees in women-owned firms and annual revenues, a metric that Weeks folds in with growth rates as “combined economic clout.”

By her clout measure, averaging together rankings of growth in the number, revenue and employment of women-owned firms, Texas ranked 11th among the states and the District of Columbia for 1997 through 2013, according to the 2013 report.

Weeks told us an updated report, drafted at the time Abbott’s camp sent out its email blast, shows Texas ranked ninth in 2014 by the clout measure.

For another assessment, we reached economist Alicia Robb at the recommendation of the National Women’s Business Council, a federal advisory body.

In April 2014, Robb co-authored a paper for the council cautioning that less than 30 percent of U.S. businesses are owned by women and only 12 percent of those firms employ anyone other than the owner herself. Only 2 percent of such firms have 10 or more employees, the paper said.

Robb told us Weeks’ methodology was adequate for estimating the growth rate in women-owned businesses, but she said that indicator alone isn’t very meaningful since any growth would look impressive considering how few businesses were previously owned by women.

Our ruling:

Abbott said the “growth rate of women-owned businesses in Texas has nearly doubled that of the nation since President Obama has taken office.”

A reasonable estimate shows the described growth rate in Texas was nearly double the national rate from 2007 into 2013.

Then again, Abbott’s trumpeting of Texas under Republicans versus the country under Obama also goes back into the last two years of George W. Bush’s presidency, which the Abbott email didn’t acknowledge.

Also, the implied message that women-owned businesses are booming ignores that most women-owned firms remain extremely small and don’t generate huge revenues.

We rate this statement Half True.
Greg Abbott
Statement: “The growth rate of women-owned businesses in Texas has nearly doubled that of the nation since President Obama has taken office.”


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