SYLVIE DOUGLIS, BYLINE: NPR.
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DARIAN WOODS, HOST:
Stacey, you've got a new book out this week.
STACEY VANEK SMITH, HOST:
Yes, I do. It is called "Machiavelli For Women."
WOODS: I love the title.
VANEK SMITH: Thank you. It was very fun to write. It's all about women and work, and a lot of it's sort of based on some of the economic data that's kind of frustrated me for a long time.
WOODS: Yeah, no, that's right.
VANEK SMITH: One of the big ones has to do with company leadership. So, Darian, nearly 80% of CEOs are male. Nearly 90% are white. And these numbers haven't really budged in a decade. And I could never understand quite what was going on, especially since some of the other numbers in the economy were so promising and exciting. Things just seemed stuck in this area. And as I was doing research for my book, this article caught my eye. It was written by Alana Semuels. She is the senior economics correspondent for Time Magazine. And apparently, she had been noticing these numbers as well.
ALANA SEMUELS: I was just feeling very frustrated and thinking, you know, what can I do about this? And the only thing I could think of is to stop giving my money to all these businesses that are run by men and giving them instead to businesses run by women.
WOODS: Alana decided to buy only products from companies that were owned or run by women.
VANEK SMITH: This is THE INDICATOR FROM PLANET MONEY. I'm Stacey Vanek Smith.
WOODS: And I'm Darian Woods. Today on the show, we follow Alana on her journey to buy female, and we see what that reveals about women and the U.S. economy.
VANEK SMITH: That does not sound that hard - like, a week, right?
SEMUELS: I did not think it would be that hard.
WOODS: Famous last words.
VANEK SMITH: (Laughter) What could possibly go wrong?
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WOODS: Alana Semuels started out her week-long journey to buy only products from female-owned companies and female-run companies feeling really optimistic.
VANEK SMITH: After all, about 40% of small businesses in the U.S. are owned by women. And that should mean a lot of options.
WOODS: The main thing she needed was food - groceries for the week, most immediately for Monday dinner. She's got a new baby and didn't want anything too elaborate.
VANEK SMITH: Yeah, so Monday dinner was spaghetti with turkey ragu - very simple. She headed to her neighborhood Safeway.
SEMUELS: So just kind of start going up and down the aisles and I would see, you know, there's a pasta sauce, has a woman on the cover. I Google it. And then it'd be like, nope. And so I was getting so frustrated. Every single company is either run by a man or owned by some giant conglomerate, like Johnson & Johnson or P & G, that's run by a man.
VANEK SMITH: So you were, like, in front of - in the pasta aisle, like, in front of all the pastas, like, Googling...
SEMUELS: Yes. Exactly.
VANEK SMITH: ...All the companies.
SEMUELS: Right.
WOODS: So finally, Alana decided to bail on Safeway, and she went across town to a co-op grocery store. And she figured, look. They focus on local products and smaller brands - maybe some hope there.
SEMUELS: But there still was no pasta.
VANEK SMITH: Really?
SEMUELS: So I found one on the end of aisle. And it turned out the CEO was a woman. But this pasta was, like, $13 for a box of penne, which would usually cost, like, $3.
VANEK SMITH: That is some pricey penne, for sure.
WOODS: For a pretty penny, it's a very pricey penne.
VANEK SMITH: (Laughter).
WOODS: Back to the story - Alana was relieved she could find anything at all, and she also scored with the tomato sauce, too.
SEMUELS: I found some pasta sauce that had a woman's face on it. And the business - it was a female celebrity chef.
WOODS: But ground turkey - that was a bust. She couldn't find any women-owned companies selling meat.
VANEK SMITH: Is it surprising to you that she had so much trouble?
JULIA POLLAK: No, it's not surprising.
VANEK SMITH: This is Julia Pollak. She is a labor economist and the chief economist at ZipRecruiter. She says most of the businesses in the U.S. are not, in fact, started by white men. Women start fully 40% of the businesses in the U.S. Black women right now are starting businesses at a record pace. But most of these businesses are tiny. Many have no employees. They're, like, Etsy stores and eBay stores. And the reason that they are so tiny, says Julia, is money.
POLLAK: If you look at some of the figures, they're really quite dramatic. Women-led startups received just 2.3% of venture capital funding in 2020. That's according to Crunchbase figures. And Black women just 0.34% - so it's a pretty staggering imbalance.
VANEK SMITH: Zero point three four percent - so, like, not even a half a percent - like, a third of 1%.
POLLAK: Like a rounding error, yes.
WOODS: And it's not just venture capital. Women are about half as likely to receive a small business loan. And if they do get a loan, that loan tends to be a fraction of what male borrowers get.
VANEK SMITH: And it's not for a lack of entrepreneurs. Right now, in fact, the number of women going into business is rising really fast. In fact, around 17% of Black women are starting a business or running a new business right now. That outpaces white women and white men. The thing is, says Julia, most of these businesses will probably fail.
WOODS: And the reason - Julia says that comes back down to that lack of money.
VANEK SMITH: What happens to people, like, when their access to money in an economy is restricted?
POLLAK: It means that whenever there's, you know, rapid, dramatic growth and the stock market is hitting new highs, they are missing out on those gains. And it means that whenever a crisis hits, they are the hardest hit.
WOODS: We saw this at the start of the COVID pandemic. Women- and minority-owned businesses closed at far higher rates than businesses owned by white men.
POLLAK: These businesses have much smaller financial cushions. And when there is a recession and they aren't able to draw down on savings or to borrow, many women-owned and minority-owned businesses that did not have that ability and - were forced out of business.
VANEK SMITH: And when women and minorities do get funding, says Julia, it often comes with a lot of strings, like higher interest rates or stricter terms. Alana Semuels, our women-only shopper, found this when she started examining some of the products that she did find. Remember the fancy $13 penne? It came from this company called Semolina Artisanal Pasta based in Pasadena, Calif.
SEMUELS: I mean, it was amazing pasta. It was extremely delicious.
WOODS: Alana tracked down the pasta maker, Leah Ferrazzani. And Alana says that Leah told her, at one point, things started taking off, and Whole Foods were interested in carrying her pasta. That would take the company into the big time.
SEMUELS: If she wanted to get into these national grocery stores, she was going to have to get investors and just make her company a lot bigger.
VANEK SMITH: But for Leah, getting those investors was going to mean basically handing over control of her business, giving them the reins.
SEMUELS: I did find a lot of companies that had been founded by women. But then when they had to scale and grow bigger, they were either acquired by companies run by men, or a male CEO took over, or they had to take on a bunch of male investors who were basically calling the shots.
WOODS: Many women that Alana spoke to sold their businesses off or just chose not to grow. That's what Leah Ferrazzani decided. She said no to Whole Foods, and she kept control of her pasta company.
SEMUELS: One of her friends was like, why don't you just stay small? And that's what she did. But I think a lot of women-owned businesses have that choice to either stay small and keep control or go big and get investors and kind of cede control.
WOODS: Julia Pollak says that this has long been the situation, but she thinks that things are now changing. Like, a lot of women and minorities started businesses during the pandemic, and that led to a lot of demand for venture capital and loans. And now there's a bunch of startups catering to that demand for loans with names like Lendio, Fundbox, OnDeck and Kabbage with a K. Do not forget the K.
VANEK SMITH: In other words, Darian, startups that are probably mostly founded by white men are raising all of this venture capital to create companies that will fund businesses that are started by women and minorities because they can't get access to venture capital. It's like the great circle of capitalism.
WOODS: And as for Alana Semuels, our activist with the wallet just looking for women-owned companies, she says she discovered some products she loved during her week. And they were very delicious. But she decided that one week was long enough.
SEMUELS: It was just so time-consuming and so expensive that it was a relief. And we have this store across the street from us. So I just went in and bought some tortilla chips and a hunk of cheddar and, you know, went home and made nachos in my microwave.
VANEK SMITH: You didn't have to Google anything.
SEMUELS: Exactly. It was very freeing. And I felt both disgusting and very satisfied, both because of the nachos and because, you know, I'm sure all those companies were run by men.
VANEK SMITH: Well, Darian, you know, if you can't win, at least you can eat your feelings. And I feel like there is nothing that is more American than that.
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VANEK SMITH: This episode of THE INDICATOR was produced by Jamila Huxtable and fact-checked by Kaitlyn Nicholas. THE INDICATOR's edited by Kate Concannon and is a production of NPR.
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