Women, Microenterprise, and the Politics of Self-Help

Cheryl Rodriguez

• Publisher: Taylor & Francis
• Year: 2016
• Print ISBN: 9781138244375
• eBook ISBN: 9781351986564
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Theories on the eradication of poverty abound. Self-help, self-reliance and self-sufficiency are touted as solutions, and are indeed critical to an economically stable life. Yet, for economically disadvantaged women (America's poorest citizens), self-help is not as simple as grabbing sturdy boot straps or climbing elusive ladders. Creative ideas for self-sufficiency do not flower and flourish in environments that are void of resources. This book, first published in 1995, examines the questions raised around the concept of self-help by introducing microenterprise and exploring its relevance to poor women.

Women, Microenterprise, and the Politics of Self-Help

I
Welfare and Entrepreneurship:
The Critical Intersection of Gender Class Economics and Policy

In a 1988 hearing before the Committee on Small Business, in the United States House of Representatives, Kathryn Keeley, of the Women's Economic Development Corporation (WEDCO), introduced some members of the 100th Congress to an uncommon notion. Ms. Keeley testified that a significant number of economically disadvantaged women have the desire, talent and motivation to create jobs in order to support themselves and their families. An expert on creative survival for women, Ms. Keeley developed WEDCO in St. Paul, Minnesota, in 1983. This nonprofit organization assists women, including those who are unemployed, or AFDC recipients, in achieving economic self- sufficiency through ownership of very small businesses (U.S. House 1988a, 205).

The hearing, entitled "New Economic Realities: The Role of Women Entrepreneurs", was one of a series of six Congressional hearings held in April and May of 1988. The purpose of these hearings was to examine and document the discrimination that women entrepreneurs face in gaining access to credit and in obtaining Government contracting opportunities. The panelists consisted of successful women entrepreneurs who described the tremendous odds which they overcame in order to compete in the business world. Among the witnesses was Polly Bergen, noted performer and chair of the Polly Bergen Company, who testified on the validity and vitality of women-owned businesses. Describing her own success, Ms. Bergen recounted the story of her $3,000 investment in a cosmetic and fashion enterprise which led to a five million dollar business. Gillian Rudd, president of the National Association of Women Business Owners, testified on the economic impact women business owners have made on the national economy. Ms. Rudd appealed to the Small Business Committee and the Small Business Administration to take the lead in developing policies that would allow women's entrepreneurship to grow. Lillian Lincoln, owner of Centennial One, Inc., an eight million dollar a year building maintenance company, spoke from the perspective of an African-American woman who started a business in 1976. Ms. Lincoln argued that, despite her high level of education and expertise in business development, customers, suppliers, and bankers were "slow to believe in a business plan" if it was submitted by an African-American woman (U.S. House 1988a, 12).

These testimonies by highly educated, economically privileged women, primarily spoke to the neglected but emerging relationship between gender and economic development policy. Indeed, women's roles as initiators, developers, and owners of businesses has been ignored. However, Ms. Keeley's testimony on WEDCO added another dimension to the discussion on women's needs for greater economic opportunities. Ms. Keeley brought attention to the critical interweaving of gender, class, economics, and policy by arguing that economically disadvantaged women, particularly those who are welfare recipients, are rarely able to pursue even modest dreams of business ownership. The stark realities of limited opportunities and restricted financial and technical resources, force many women to remain in very low wage jobs or connected to the welfare system.

What self-employment opportunities are there for poor and low-income women? Kathryn Keeley and other advocates for self-help initiatives argue that there could be and should be limitless opportunities for those seeking to take control of their own economic lives. These opportunities can be created through microenterprise, a term that became popular during President George Bush's Administration and is still used in President Clinton's economic development jargon. Quite simply, a microenterprise is a very small business. Such businesses are similar to, or evolve from, informal economic activities, and are often initiated with relatively minimal amounts of startup capital. These businesses are service oriented, labor intensive, and are usually operated by persons with limited financial means.

Barriers To Self-Help

Among those persons who are most likely to operate microenterprises are low income women who are also recipients of Aid to Families with Dependent Children (AFDC), Food Stamps, the Special Supplemental Food Program for Women, Infants and Children (WIC), or other governmental assistance programs known as welfare. Like other potential entrepreneurs, poor women generate ideas for businesses based on their talents, their family situations, or their dreams. However, welfare recipients face some extraordinary challenges in their attempts to begin microenterprises. One barrier is the difficulty in obtaining capital for business ventures. Access to even very small business loans is often impossible for low income women. Arguing that the transaction costs for these loans are high relative to the interests and fees, lending institutions see no profit in lending small amounts of money. Another barrier to business ownership for low-income women is the culture of banking which is founded on upper class, patriarchal, Social Darwinist beliefs in the value of competition. Low income women are invisible to bankers. Hoke (1990) gives several reasons for this invisibility. First, women microentrepreneurs have few, if any assets to use as collateral. Secondly, many women attempting to start businesses have no previous experience in the business world. Third, low income women, particularly public assistance recipients, usually have no significant credit history. Fourth, low income women entrepreneurs often lack sophisticated business or accounting practices.

The stigmatization of women welfare recipients by the banking community is only one of the many obstacles these potential microentrepreneurs face. There are many others, including a lack of support from welfare case managers and hindrances posed by family and friends. However, of all the encumbrances, the most formidable barriers to self-sufficiency are embedded within the welfare system itself. Welfare regulations specifically address self-employment, and include restrictions which are typically not imposed on middle class business owners. For example, in her efforts to develop a new business, a woman can lose welfare eligibility if she reaches certain assets and income limits. Even before a business has stabilized enough to provide adequate income for family support, the accumulation of working capital exceeding $1,000 can disqualify a family from receiving AFDC benefits. In most states, welfare recipients seeking entrepreneurship cannot separate business loans, or the value of capital equipment bought for a business, from personal assets. Further, welfare recipients cannot deduct repayment of loans as business expenses, nor can they deduct equipment depreciation (Feit and Das 1990, 3). The potential loss of Medicaid, Food Stamps, and subsidized child care are other severe barriers to business ownership for low income women. As with AFDC, income eligibility requirements for these programs restrict accumulation of assets over a certain dollar amount.

The 1988 hearing before the Committee on Small Business did not directly address issues related to the self-employment needs of public assistance recipients. Instead, the Congress proudly commending itself on acknowledging the success that a select group of women had achieved in the business world. Further, issues of class and ethnicity, and their impact on women business owners were only superficially addressed. However, in her final remarks, Ms. Keeley urged the Congress to consider the needs of economically disadvantaged women, as well as America's need for feasible and successful economic development models like WEDCO:

The country is hungry for quick fix models to end poverty, create jobs and successful businesses and transform welfare recipients into tax payers. There are no quick fixes to solving poverty. Creating jobs and economic changes requires time as much as money. We must use a longer time frame and provide opportunities to the economically disadvantaged. They will then be better able to pursue their own ideas and develop their own opportunities (U.S. House 1988a, 30).

Politics And Self-Help

Since 1988 both the Executive and Legislative branches of the United States government have made small steps toward addressing opportunities and choices for economically disadvantaged people. The Bush administration's response to America's outcry for answers to domestic poverty was a construct called the New Paradigm. Billed as an empowerment package, the New Paradigm featured allocations for "housing, education, enterprise zones, Indian affairs, small business and possible welfare reform" (Solomon 1991, 204).

The New Paradigm was full of lofty, promising ideals. It offered remedies to the housing, health care, education, and poverty crises facing America today. Yet, despite glossy rhetoric, some of which did receive bipartisan support, the New Paradigm was hollow political language from an administration struggling to piece together a domestic policy.

The Clinton Administration has also voiced its support for self-help initiatives, including programs that lend money to the poor for microenterprise development. As a candidate, Bill Clinton strongly advocated economic parity for people living in poverty, "I'll give people a chance to show that poor folks know how to borrow money, know how to pay it back, know how to make a living, and they have been deprived of that opportunity for too long." (Glastris 1993).

Despite campaign promises and good intentions, when self-help becomes a political issue, this very viable concept loses its vigor. For example, during the Bush Administration, empowerment packages were proposed at a time when the government was reluctant to spend money on any new social programs. This is also true for the Clinton Administration. In fact, most new initiatives are model programs or pilot projects which do not require significant governmental expenditures. Some economic policy analysts have expressed skepticism about the intentions and success of self-help programs that do not receive adequate financial support. In reference to President Bush's self-help proposals, one policy analyst commented, "Letting people help themselves would cost more than the White House is willing to spend" (Solomon 1991, 208).

Associated with the concept of self-help is the notion of empowerment, which has also become a part of both Democratic and Republican political jargon. In the 1960s and early 1970s, the concept of empowerment was based on liberal demands for social, political, and economic power to the disadvantaged and disenfranchised. Empowerment was synonymous with the political struggle for recognition of the rights of the poor. Activists involved in such movements as the Welfare Rights Movement, the Civil Rights Movement and the Unemployed Workers Movement understood that working-class and poor people must be a part of social change, not as victims but as actors. Thus, empowerment was dependent upon acknowledging the needs of people in communities, and facilitating community mobilization. In contrast, political leaders of the 1980s and 1990s view empowerment as a process that occurs on an individual level. For example, during the Bush Administration, the enlistment of the Small Business Administration for a project to support business ownership by the poor, was based on the assumption that the provision of credit alone, was the sole factor necessary for any entrepreneur's success. This assumption was based on knowledge of and reverence for the culture of the banking community, which is controlled by rich and powerful males. What was ignored was the fact that poor and low-income people, and in particular, poor women, are in need of a multitude of services (including technical assistance, legal assistance, child care, medical plans, and peer support) to ensure the success of a potential business. Moreover, this individualistic, competitive model also ignored those factors contributing to poor women's limited access to and control of the business environment. Those factors include low income women's lack of education about the business world, and their limited incomes which allow little contact with bankers.

In contrast to the rhetoric of ambitious politicians, grassroots advocates of microenterprise assistance programs have a perspective on this issue that is grounded in the realities of small business ownership by low-income women. Within the last five years, a growing number of advocates for microenterprise have persistently explored the concept of self-employment as one viable path toward self-sufficiency for Americans who live in poverty. Various groups affiliated with microenterprise have called for federal policies which would stimulate and support the growth of microenterprise initiatives across the nation. These groups also have sought changes in federal and state welfare regulations which would ease entry into microenterprises by public assistance recipients. A significant change being sought is one which would allow welfare recipients who are attempting to start microenterprises to continue to receive public assistance during the first year of developing their small businesses. In attempting to affect radical but humanistic changes in welfare policy, persons involved in economic development through microenterprise have sought the cooperation of federal policymakers. Aside from testifying in Congressional hearings, directors and administrators of microenterprise assistance programs work with Congressional staff members to educate policymakers on microenterprise and to gain support for this economic development strategy. One Congressional body which was receptive to ideas posed by microenterprise advocates and thereby played an active role in investigating the economic needs of low-income women, was the Select Committee on Hunger. Before its elimination from the U. S. House of Representatives on March 31, 1993, this Committee was responsible for conducting comprehensive studies and reviews of the problems associated with global hunger and malnutrition, including the causes and effects of these problems. Originally authorized in 1984, the Select Committee on Hunger was involved with numerous issues related to health, hunger, and poverty. Some of those issues included: evaluation of food assistance programs; technology and development in economically disadvantaged nations; reduction of infant mortality; women in development; and measuring poverty in the United States. In 1991, the Select Committee developed comprehensive antihunger and antipoverty legislation in the form of an omnibus bill. One component of this bill, entitled "The Freedom From Want Act", proposed to advance the concept of innovative self-help options for the poor in the form of individual development accounts for low income persons, and pilot projects for microenterprise initiatives. This may have been the first time that such an extensive self-help initiative was approached through the collaboration of a Congressional Committee and grassroots organizations. An account of that collaboration is one of the key aspects of this book.

Theoretical Framework For Analysis Of Women's Microenterprise Initiatives

Because nonprofit organizations such as the Women's Economic Development Corporation in Minnesota, the Women's Self-Employment Project in Chicago, Business Owners Start-up Services in Baltimore, and others across the nation have reported participation by a significant number of AFDC recipients, it is essential to ask how microenterprise can become a viable path to true economic independence for low income women who seek this option. Because policymakers can effect the kinds of support received by microenterprise assistance programs, it is important to consider the nature of the assumptions that inform policymakers' perceptions about women and poverty. It is also important to understand the politics of the policy formulation process and its relationship to the concept of self-help. Further, it is imperative to determine how emerging microenterprise policies address the particularly restrictive barriers to entrepreneurship which low income women face. These are the key issues addressed in this book.

The significance of addressing these questions lies in the revolutionary assumption that low-income women and indeed, public assistance recipients, do have a role in economic development. The potential of low-income women as creative contributors to economic development is a subject that is rarely explored. Rather, poor and low-income women are perceived as a mass of dependents contributing only to the expansion of the welfare state. This view of low income women is quite narrow and does not consider the multiple levels of oppression faced by this segment of America's citizenry.

Women, Microenterprise and the Politics of Self-Help presents an anthropological and feminist analysis of microenterprise. This analysis addresses the critical interweaving of gender, class, economics, and policy, which must be considered in the development of any microenterprise support program. Thus, in this research, those entrepreneurial needs that are specific to low-income women were placed at the center of policy analysis. Additionally, this book views microenterprise as an economic strategy that has often been chosen by low-income women worldwide, despite cultural, historical, or governmental barriers.

The explication and exegesis of the key issues involved in this research require a theoretical orientation which explains the relationship of low income women to the state, the validity and significance of low income women's autonomous economic strategies, the role of the state in economic development policy, and assumptions about women's economic roles which inform policy formulation. Moreover, it is important to engage a theoretical orientation which suggests actions for resolving the problems involved.

Although feminist anthropologists have focused on women's political and economic relationships to the state, feminists such as MacKinnon (1983), have argued that feminism lacks a theory of the state. Moore (1988) contends that feminist anthropology is no exception to this rule. Thus, there is a need for theory which embodies both feminist and anthropological principles. The political economy school of anthropology allows analysis of low income women's relationship to the state by viewing the state and the capitalist world system as external forces which act upon classes or groups of people. Admittedly, there is an inherent weakness in the application of Marx's political economy theory to the economic strategies of low income women. Indeed, Marx was primarily directing his theories to "men and masculine circumstances" (Donovan 1987, 65). However, there are some important principles embedded within political economy which speak to contemporary feminist and anthropological thought.

Political economy incorporates cultural or symbolic issues into inquiry on the development of class or group identity, in the context of political or economic struggle (Ortner 1984). Accordingly, this book acknowledges the cultural integrity, the creativity, the capabilities, and the intelligence of low income women who are public assistance recipients, and describes one specific strategy which they may choose to employ for economic survival. Political economy also analyzes the larger systems of relations within which a group is embedded (Ortner 1984:142). Therefore, public assistance recipients and their families are viewed not only as a part of the welfare system, but also as a part of state and federal processes. Political economy also emphasizes the importance of history in anthropological inquiry. Ortner contends that this school of anthropology appears to be the most committed to a fully historical anthropology, and produces sustained and systematic work grounded in this commitment. Within this tradition, this research maintains an historical perspective on the development of federal policy on microenterprise.

Political economy is considered to be one of two distinct Marxist schools of anthropological theory. The other school of thought, structural Marxism, developed along with political economy in the late sixties and early seventies (Ortner 1984). In a discussion of the relationship between Marxism and anthropology, Clammer (1985) argues that the development of a Marxist anthropology radically confronted questions of colonialism, questions of the objects of anthropological inquiry, and questions of the th...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Original Title
• Original Copyright
• Dedication
• Contents
• Preface
• Acknowledgments
• Chapter I Welfare and Entrepreneurship: The Critical Intersection of Gender Class Economics and Policy
• Chapter II Women, Microenterprise and Economic Empowerment: A Global Perspective
• Chapter III A Look at a Microenterprise Project: Business Owners Start-Up Services
• Chapter IV The Select Committee on Hunger: Historical, Political and Ethnographic Contexts
• Chapter V The Select Committee on Hunger: Legislative Activities Related to Microenterprise
• Chapter VI Radical Political Economy: Analysis of Major Concepts
• Bibliography
• Index