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Women’s Entrepreneurship and Labour Market Trends in Canada

As a woman, you have a choice of working as a domestic servant, unskilled worker, sex worker, nun or a teacher. Few of you may be sole proprietors of businesses or professional services, but that’s only if your husband dies and leaves you his business. You also have the option of running a brothel, tavern or alehouse (that is of course if you are unmarried and unafraid of being labeled a “social pariah!”). Most women will work until they marry, and once married, their only job is to be a homemaker. (These were the employment opportunities for women in the early 19th century.)

Fast forward to today, female entrepreneurs are prevalent in sectors including education and healthcare (63.1 per cent); accommodation and food services (52.8 per cent); information, culture and recreation (44.1 per cent); finance, insurance and real estate (38.5 per cent); and professional services (38.1 per cent).

In the last 30 years, we have seen an increase in female entrepreneurs, yet female business owners still face wage and gender discrimination. You may wonder: how could self-employed women experience wage discrimination if they set their prices? This is because they aren’t taken as seriously as their male peers, and so they charge less to get and keep clients.

To better understand the evolution of female entrepreneurship, we must examine labour market trends, and determine what key events throughout history have affected female leadership.

1990: Third-Wave Feminism Begins

Third-wave feminism is an iteration of the feminist movement, where feminists question, redefine and reclaim existing philosophies about gender, womanhood, sexuality, masculinity, and femininity. This movement influenced much of the economic changes and women’s entrepreneurship growth in the 1990s.

Between 1990-1995, self-employment for women was steadily growing at a rate of approximately 25 per cent per year, and there was even an observable trend of female entrepreneurs increasing faster than men. Women’s income also rose (relative to men’s), moving up to 76.5 cents for every dollar earned. It is important to note there was an income gap between women of different races, where white women still made more than Latina and Black women, who made 54.5 cents and 64.1 cents, respectively.

Pop culture also played a major role in the rise of female leadership. There were intelligent, outspoken feminists-in-the-making musicians like Sarah McLachlan, who helped teach the next generation of women that being a girl meant whatever they wanted it to mean. Girls in the ‘90s were encouraged to pursue every career opportunity, even in the face of adversity.

2000: Fair Pay and Steady Strides in the Workplace

At the turn of the century, feminism became a real threat to masculinity, and spawned a social sector that was much more conducive for female business owners. From Martha Stewart to Oprah Winfrey to serial entrepreneur and award-winning mentor Vicki Saunders, these women helped to pave the way for female entrepreneurs everywhere.

On February 17, 2016, a special committee on pay equity was formed, to mandate issues of pay equity. After a report titled It’s Time to Act was produced, the Government of Canada reaffirmed its commitment to developing proactive pay equity reform.

From 2000 to 2020, the number of female CEOs of Fortune 500 companies increased from two to 37, representing 7.4 per cent of the top spots. This advancement drove up earning power, and these statistics will presumably increase as women in leadership roles beget more female leaders.

2010: Female Breadwinners Hit an All-Time High

By 2010, female breadwinners almost quadrupled from the 1970s, from 8 per cent to over 30 per cent. Women were now earning more degrees than men, and because of this, they were increasingly closing the breadwinner gap.

More men also chose to be stay-at-home dads, and although this looked like a shift in societal norms, some evidence suggests this likely had more to do with a major economic downturn and a loss of manufacturing jobs, than with any great strides forward in pay equity or gender parity.

2020: Impacts of COVID-19

Challenges for female entrepreneurs have been amplified during the COVID-19 pandemic. Many self-employed women have found themselves ineligible for business support ─ particularly those working in the services sector, where often they rely on contractors instead of employees, and therefore, they’re excluded from programs focused on companies with employees. Bearing childcare responsibilities also disproportionately affects them.

To take economic recovery seriously, you must efficiently evaluate and address the challenges faced by women and other underrepresented groups of entrepreneurs. Entrepreneurial diversity is essential not just for women, but for the entire economy. For example, increasing the number of female entrepreneurs provides a potential $150 billion GDP economic gain. A recent study titled The State of Women’s Entrepreneurship in Canada highlighted some important issues:

  • Women are majority owners of about 15.6 per cent of all small and mid-size enterprises (SMEs) with one or more employees – about 114,000 companies (2017). However, women account for over 37 per cent of self-employed Canadians – that’s 1,050,000 (2019).
  • Women are less likely to seek and receive financing than men (32.6 per cent vs. 38 per cent respectively), and firms owned by men are more likely to receive venture capital, angel funding, and/or other forms of leverage, such as trade credit or capital leasing.
  • SMEs with under 20 employees have been the hardest hit during the pandemic, and women are more likely to own newer and smaller businesses, making them the most affected.
  • Female-owned start-ups have lower growth rates of income (on average, it takes up to five years to catch up to male-owned counterparts).
  • During the pandemic, the percentage of female-owned businesses that laid off staff (40.6 per cent), is about equal to the percentage of male-owned businesses overall (40.5 per cent). 

Future research needs to focus on a better understanding of questions like why female-owned businesses experience a lower growth rate than male-owned businesses, and what drives these differences. Also, the research, programs, and any plans for economic recovery (resulting from COVID-19) must have a gender and diversity lens. If not, we risk turning back the clock on decades of progress.

Susan Gebrezgie | Contributing Writer

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