From the Advocate

By Tara Lynn Gray 

July 2022

Valuing Women’s Self-Determination

As I was preparing this column, the headline flashed in my notifications. It wasn’t a surprise. But I still needed a moment to catch my breath.

Roe v. Wade is overturned. Tomorrow women will wake up with fewer rights than they had this morning. We are diminished, I thought.

Fortunately, however, I live in California, and my daughter lives in California, and I work for a Governor who has not only been vocal and unequivocal about the primacy of women’s power over their own bodies and their own choices but who has been preparing for this moment. This includes very specific measures in this coming fiscal year to support women entrepreneurs, which I’m proud to tell you about as we still reel from the shock of the Supreme Court decision.

Within hours of the ruling, Governor Newsom had rallied to protect the medical rights of women not only in California but those in states that have foreclosed on a woman’s right to choose: In Response to Supreme Court Decision, Governor Newsom Signs Legislation to Protect Women and Providers in California from Abortion Bans by Other States | California Governor

But, while I have strong feelings on this issue, I’m not here to talk about the constitutional or moral dimensions of the matter.

I want simply to underscore the relationship that our current constitutional crisis creates between the political and the economic climate in our state. Despite whatever concerns anyone may have had about California’s business conditions or the drought or housing availability on June 23, 2022, the Supreme Court decision on June 24, 2022, means that business-owners must now factor in the rights of their female employees – and LGBTQ employees as well — as part of the decision-making on WHERE to do business.

Not since Jim Crow laws in the South were oh-too-gradually overturned has business site selection had to include such a significant moral dimension.

Protecting the right to choose is not the only way in which this administration is protecting women in the workplace and empowering female entrepreneurs. Let me point to just three examples.

Childcare Availability

It is no secret that California has some of the highest childcare costs in the country. It’s also no secret that COVID-19 did real structural damage to the already fragile childcare industry, including centers and family child-care providers.

Other than medical service providers, probably no other essential service providers have run a higher risk of infection than childcare providers, including right now as vaccines for infants and very young children are just becoming available. Businesses have faced enormous pressure to stay open despite the risks, both for the well-being of the families they serve and the financial security of their own families.

Providers were put in the impossible situation of choosing between their health and their financial well-being. Eighty percent of open programs said they stayed open only because they didn’t have the resources to survive a closure, according to the July 2020 report “California Child Care in Crisis” from the Center for the Study of Child Care Employment.

Their choices had ripple effects across the workforce too.

This is why, as part of the broader COVID-19 economic recovery plan, the Newsom administration recognizes that the availability of affordable childcare is a critical infrastructure need.

In response, the Governor’s May budget proposal included $6.3 billion for childcare programs, including continued support for a historic commitment to supplemental funding to providers in the state’s first such collective bargaining contract ratified last year. The funding undergirds the administration’s commitment to expand childcare access by 200,000 slots by 2025-26.

In my Office, I’m very proud to have approved as part of the $35 million Dream Fund rollout multiple childcare training programs designed to spur the creation of new family childcare businesses. Childcare specific training programs supported by CalOSBA include the License to Care program from the California Capital Women’s Business Center in Sacramento and the Childcare Business Program from the El Pájaro Community Development Corporation  headquartered in Watsonville and providing services across Monterey County as well as childcare training programs hosted by the San Diego Imperial Valley SBDC network, the San Diego Imperial Valley Women’s Business Center and the Central California SBDC network, among others.  Completing the training makes the childcare provider eligible for a Dream Fund grant of up to $10,000; both programs are still accepting applications.

Female Business Leadership

In 2018, California set a history-making precedent with the passage of a law mandating gender diversity on corporate boards. The law has required publicly held companies headquartered in California to have one member who identifies as a woman on their boards of directors by the end of 2019. By January 2022, boards with five directors were required to have two women and boards with six or more members were required to have three women.

Governor Brown understood that enforcing the law was always going to be difficult. And, indeed, a Superior Court Judge in Los Angeles ruled in May that the law as written is unconstitutional. The state intends to appeal, but its legal future is unclear.

Nonetheless, the Women on Boards law had already proven its point.

The number of women on boards in the state grew from 766 in 2018 to 2,055 now, and more women than men were named to boards of publicly traded companies in the state in 2021, according to a report by the California Partners Project co-founded by First Partner Jennifer Siebel Newsom.

As of March, the percentage of board seats held by women climbed to more than 32.5 percent in California, compared to 27.3 percent nationally, according to the advocacy group 50/50 Women on Boards. Ninety-nine percent of California companies have at least one female director. (The Central Valley has the best regional record.)

“All-male boards are essentially a thing of the past among California’s public companies — and that gives us a competitive edge,” said First Partner Jennifer Siebel Newsom in a statement.

Support for Growth and Access to Capital

Sadly, the recent data for female entrepreneurship is less encouraging.

There are an estimated 13 million women-owned businesses in the U.S. employing nearly 10 million people and generating nearly $1.9 trillion in annual revenue according to the Census Bureau. Since 2014, the fastest growing sub-category are firms owned by women of color.

In 2021, however, the average annual revenue for women-owned businesses dropped from $493,401 in 2020 to $475,707 in 2021, a 4 percent decline while earning dropped by 26 percent from $119,654 in 2020 to $88,895 in 2021. Male-owned businesses dropped too, mind you, but not nearly as far, according to a report from biz2credit sponsored by the Association of Women’s Business Centers (WBC).  Even average credit scores from women dropped by eight points in 2021 (although in this case men’s scores dropped even more).

Source: Annual Women-Owned Business Study 2022, biz2credit

According to the same study, California ranks fifth in the nation for number of loan originations for women, following Texas, Georgia, Illinois and Florida. Nationwide, the average loan size for women-owned companies was $49,712 in 2021, compared to $83,198 for men-owned companies.

Clearly, we have work to do here.

I’m excited, however, to have the legislature and the Governor’s support to do it. The FY 2022-2023 budget that took effect July 1 includes $8 million in technical assistance funding for Women’s Business Centers in California. This is in addition to the $23 million in annual permanent funding that the Governor already approved for California’s Small Business Centers, administered by my office’s Technical Assistance Program.

This new funding will continue to support a couple of bright spots in the pandemic-related data for women’s businesses: an increase in the number of women-owned business startups and a significant uptick in the delivery of services to women entrepreneurs from the Women’s Business Center network.

WBC’s FY21 Results Overview

Source: Annual Women-Owned Business Study 2022, biz2credit

Knowing that California continues to value female self-determination and knowing that this makes California more competitive, in a perfect virtuous circle, comforts me as I digest the reality of a country after Roe v. Wade.

Stay tuned for the soon-to-be-released 2022 COVID-19 Impact on Women-Owned Businesses funded by my office.