Woman putting 'Open' sign in window (© Shutterstock)
When a business owner goes from being a sole proprietor to an employer, it's a big deal. (© Shutterstock)

Women business owners are hiring in the United States — and at increasing rates.

Historically, women-owned businesses have been more likely to be small — even one-woman proprietorships — while firms led by men have supported bigger payrolls.

But women-owned businesses with employees grew approximately 2.8% year over year in the most recent data released by the U.S. Census Bureau’s Annual Survey of Entrepreneurs.

“That’s very promising because those are the successful firms,” said Robert Fairlie, an economics professor at the University of California, Santa Cruz, who studies trends in entrepreneurship. Fairlie is optimistic that this growth will continue as women gain visibility in business. “As more and more women become successful entrepreneurs, then young women, and especially girls, will see that as an attractive career opportunity,” he said.

Lauren A. Wright, a lecturer at Princeton University, said that when women’s leadership becomes normalized, it in turn inspires women to take new risks.

Although the Census Bureau survey reports that, in the United States, women own just 20 percent of all employer businesses, the rate of women starting new businesses has grown for most of the past several years, according to Fairlie. 

Sameeksha Desai, of the Kauffman Foundation, a Kansas City, Missouri, nonprofit that focuses on entrepreneurship, says differences remain between men and women. “The rate of new entrepreneurs in 2018 was 0.41% for men, compared to 0.24% for women. That’s definitely a gap,” she said.

But, she said, of the businesses started by women, 90% are started because the owner sees an opportunity, not because the owner is unemployed. That share is only 83% for men. “The higher ‘opportunity share’ for women has been pretty consistent over recent years,” Desai said. It may mean that women business owners are more motivated to succeed.

As women’s businesses become more successful, with larger workforces, they boost local economies. “Diversity of business owners can support new ideas, new approaches, new markets, new ways of serving customers and new innovations,” Desai said.

This article is by freelance writer Linda Wang.