Friday, November 15, 2013

Entrepreneurs, Women and Industry

When is a handmade good no longer considered handmade? Elizabeth Wayland Barber took up that question in her recent Op-Ed piece in The New York Times, "Etsy's Industrial Revolution." As I read her essay, I realized that she was bringing up topics much broader than the definition of handmade goods. She was also addressing the issue of women starting and running businesses.

Etsy, the site where artisans can sell their hand-crafted goods, has loosened its rules on the definition of handmade. Too many of its participants are finding it impossible to keep up with the demand for their goods, so they agitated to be allowed to start manufacturing their handcrafts. This change is running afoul of the Etsy ethos in some people's minds. Where do you draw the line?

Barber then draws upon history to make a point, women have been turning to machinery -- and inventing their own machines -- to allow themselves to create handcrafts to sell in order to feed and clothe their families. The drop spindle and the loom are both machines used for millennia all over the world to spin thread and make cloth. Would these machines be blocked by Etsy?

But this got me thinking of how hard women in all countries and in all economic levels find ways to start businesses to give themselves more control over their lives. The glory right now is going to tech startups. And Silicon Valley is being chastised for the lack of women-owned tech startups and women-owned venture-capital-backed businesses. Why are people so worried about women getting venture capital? 75% of venture-capital-backed startups fail.

The the small, manageable, low-tech businesses -- like making and selling handcrafts -- are more successful. These startups grow. And many of them are women-owned. Women are the unsung heroes of entrepreneurship. They are creative. They form businesses that create jobs and inject money into the economy. They manage their families and their businesses. Does it matter that they don't create million-dollar or billion-dollar companies?

We need to get away from lauding the male-dominated tech startups and start looking around at the entrepreneurial vigor in our own communities, particularly the women-owned startups.

Here are some choice quotes about women-owned businesses from the National Business Women's Council:

"Even as the nation’s economic growth slowed, employment in women-owned firms continued to expand while men-owned firms were contracting.1 Furthermore, projections indicate that the trend in employment growth among women-owned firms will continue. The Guardian Small Business Research Institute projects that women-owned businesses will create 5 to 5.5 million new jobs by 2018 – more than half the 9.7 million new small business jobs expected to be created and about one-third of the 15.3 million total new jobs anticipated by the Bureau of Labor Statistics by 2018.2

"Women-owned businesses already are serious players in this nation’s economy. An economic impact study conducted by the Center for Women’s Business Research and the National Women’s Business Council documented that majority women-owned firms today are driving more than 23 million jobs – both directly and indirectly."

Let's understand what's really happening out there. Women: stand up and be counted for your contributions to the economy.

Friday, November 8, 2013

Funding the "Affordable" Care Act (aka Obamacare)

When Obama was elected president, he said he wanted to spread the wealth around. The Affordable Care Act, which some people are calling the "Unaffordable Care Act," is making good on Obama's goal.

I heard the best explanation of how the redistribution of wealth is taking place on NPR in their broadcast on November 7, 2013. The title of the piece was "How the Affordable Care Act Pays for Insurance Subsidies."
People who have had very expensive health insurance or no insurance, but relatively low incomes, can now get affordable health insurance plans because the government is subsidizing the plans. The subsidies are paid for in part from a higher Medicare tax on high-income earners ($250,000+ in annual income). That's a clear redistribution of income. Funding for the system also comes from lower Medicare payments to providers and taxes on medical-device and drug companies.

Read or listen to the whole NPR piece. Everything fell into place for me when I heard it.

Unfortunately, there are a lot of unintended (but easily foreseen) consequences from Obamacare -- consequences that Obama has actually apologized for. (Hear interview with Obama on NPR.) Individuals, sole proprietors and small business owners are getting slammed with much higher insurance premiums. Virtually every small business owner I know has had their current health insurance plan cancelled. And they can only find new plans that have 40% to 100% higher premiums, and in many cases lower benefits and higher deductibles and co-pays. Small and new businesses are the engines of economic growth and job creation in this country. These new, more expensive policies are surely going to hurt that engine.

We were supposed to be able to keep the plans we had, if we liked them. Will this problem get solved? Who knows? Obama claims he'll try to get this fixed along with the glitch-filled software running the Federal exchanges.

If I were in charge, I'd expand Medicare to cover everyone. The system is already set up. Businesses would no longer have to pay for health insurance. They'd improve their bottom lines. They would be able to hire more workers and pay them more. Yes, we would have to cover the cost with new taxes. But the benefits would be enormous. And with everyone enrolled, I suspect the taxes would not be as high as the premiums we now pay. People could always buy supplemental plans, just as they do with Medicare. We are the only industrialized nation without universal health coverage. Time to catch up with the rest of the world and stop trying to jury-rig a system that is not working the way it was intended.