Starting Small… Thinking Big. A Women’s Initiative Blog

Are Recovery Act Tax Credits for Businesses Working?

Speaker Nancy Pelosi’s office is looking for feedback from local business owners who have taken advantage of the Work Opportunity Tax Credit (WOTC) for businesses.

The WOTC offers tax savings to businesses that hire workers belonging to any of 12 targeted groups, including unemployed veterans and disconnected youth. The other 10 include people ages 18 to 39 living in designated communities in 43 states and the District of Columbia, Hurricane Katrina employees, recipients of various types of public assistance, and certain veterans, summer youth workers and ex-felons.

The Speaker’s staff have asked Women’s Initiative for our help finding business owners who were able to take advantage of the tax credit.

If you have taken advantage the WOTC, please contact Elizabeth de Renzy at (510) 287-3117 or ederenzy@womensinitiative.org. And please forward this message to your network!

Don’t miss this opportunity ensure that your voice is heard by our decision makers in DC!

 

The Big Business of Government Spending

The question of whether or not to cut government spending to reign in the federal budget deficit is the political battle raging in Washington these days. Some say that we have to decrease the deficit to get the economy back on track, while others argue that we need to spend our way out of the current recession. In recent testimony given to the congressional commission on fiscal responsibility and reform, WIPP national partner, Tara Olson, explained that 83% of women business owners favor decreasing the deficit. Meanwhile, a June 11-13 USA Today/Gallup poll shows that 60% of Americans are in favor of increasing government spending to stimulate the economy. What accounts for this radical difference in the opinion of women entrepreneurs and the public at large? Does increased government spending eliminate the competitive edge that many women-owned small businesses have by unfairly subsidizing their competitors?

Government spending in and of itself does not necessarily put small, women-owned businesses at a disadvantage. However, the results of a recent study by Tischler & Associates indicate that many chain stores are tacitly and massively subsidized in this country through tax dollars. The study showed that fast food restaurants incurred a tax deficit of $5,168 per 1,000 square feet, with big box retail developments trailing close behind at a loss of $468 per 1,000 square feet, and shopping centers at a loss of $314 per 1,000 square feet. On the other hand, the study showed that in general local businesses create net gains for tax payers. These findings suggest that given the current allocation of tax dollars, increased government spending would in all likelihood benefit big business and make competition more difficult for small businesses like those that are cultivated by Women’s Initiative.

Training for What?

A New York Times article on Monday – After Training, Still Scrambling for Employment – confirmed what we at Women's Initiative for Self Employment have long suspected: job training is only useful if there are jobs to be had. On the other hand, microenterprise training is a proven method of job creation. Our white paper – Job Creation through Microenterprise Development – shows that the women who go through the small business training program offered by Women's Initiative not only produce jobs for themselves, but for others as well. In fact, in 2009 alone, Women's Initiative clients created more than 2,200 jobs.

It’s time for the government to realize that no amount of job training is going to help people find employment when there are no jobs to be had. With the number of unemployed workers still outnumbering job openings five to one, it is more important than ever that federal funding through the Workforce Investment Act should focus on job creation as well as job training.

Current job training programs appear to be operating under outdated assumptions about the economy. “A lot of the training programs that we have in this country were designed for a kind of quick turnaround economy, as opposed to the entrenched structural challenges of today,” the New York Times quoted Rutgers University labor economist, Carl E. Van Horn saying.

A study conducted by the Department of Labor showed that, even before the recession, job training programs resulted in little or no increase in earnings for participants. In contrast, women who participate in microenterprise training programs are seeing significant increases in earnings. Women’s Initiative graduates typically increase their income an average of 75% within the first 12 months after training.

In a Huffington Post op-ed Julian L. Alssid, Executive Director of Workforce Strategy Center in New York City, agreed that skills training alone isn't enough without job creating strategies.

Consider these three reasons to include job creation through microenterprise training in our workforce investment strategy:

·     18% of all US employment is in the microenterprise sector.

·     Microenterprise training enables unemployed workers to create jobs for themselves and others in their community.

·     Microenterprise training results in an increase in income and assets, thus stimulating the economy.

Job Creation Through Microenterprise

Women's Initiative has released a new research paper on “Job Creation through Microenterprise Development.” 

The research shows that our training support program is a proven method of job creation.  In 2009, when major corporations were downsizing and announcing layoffs, Women’s Initiative graduates created 2,244 jobs.  Other highlights of the research include:

· Nine in ten clients are employed or self-employed twelve months after training.

· More than six in ten are self-employed twelve months after training.

· One year after training more than one in ten clients provided part-time, full-time, temporary and contract jobs for others.

· Five years after training, more than one in five provided jobs for others, with an average of nearly two jobs provided for others per client. 

· For every 100 women who receive training, an average of 245 local jobs are created and retained five years after graduation.

· With an average cost of $1,525 per woman served, a $1 million investment in Women’s Initiative’s programs would result in 132 new jobs being created within 12 months and a total of 480 new jobs in five years.

 Congratulations to the strong clients of Women's Initiative who are having a significant impact on the Bay Area economy!   

Finding your tribe of support

I attended two very inspirational events last week.  And although the speakers had extremely different backgrounds, their messages were quite similar and right in line with the Women’s Initiative philosophy.

On Thursday, I attended the ERA luncheon with keynote speaker Arianna Huffington.  Arianna talked about the need for women to not only break the glass ceiling and achieve success, but to do it differently.  Women, she said, do things with empathy, which is exactly what the world needs now.  If the Lehman Brothers had been the Lehman Sisters, things would be a lot different today!

She also talked about the personal obstacles women face, including facing our own worst critic in ourselves.  Arianna refers to her inner critic as her ‘obnoxious roommate’.  This is the voice that tells you you can’t do it, you’re too old, you’re too fat, you don’t know what you’re doing.  The challenge is getting past that inner critic.  Arianna’s book On Becoming Fearless addresses this and says that fearlessness is not the absence of fear, but the ability to not let your fears stop you.  The key she said is to form our own tribe of people who support us.  People who lift us up and tell the obnoxious roommate to shut up.

On Friday morning, I went to the Women’s Initiative North Bay Fundraising Breakfast.  We had several guest speakers, including our own charismatic Julie Abrams, and Alison Davis from Belvedere Capital, one of the most influential women in Bay Area business.  But the most powerful speaker that morning was Mara. 

Mara is a recent graduate of Women’s Initiative. Mara’s background is about as far from Arianna Huffington’s as you could imagine.  Her mother was an alcoholic so Mara was left to care for her younger siblings as her mother was either absent or unable to care for them.  Her father physically abused her mother.  At 17 Mara could no longer take it and ran away from home, despite the guilt she felt at leaving her younger siblings.  She soon married her boyfriend and found herself with two babies and in a not much better situation than what she had left.  Her husband was verbally abusive, telling Mara that she was useless, that she would never survive on her own, and that her children would starve. 

Despite that, Mara did find the strength to leave.  Shortly after, she saw an interview on television with a Women’s Initiative graduate.  A Latina like herself who had started her own business and become successful.  Inspired but scared, Mara called Women’s Initiative and signed up for the business training course.  There, she found a warm, caring group of women who never told her that she couldn’t do it, but only gave her words of encouragement and helped her discover her own path to success.  She had found her own tribe of supportive women. 

Mara’s goal is to start a local publication for Latina women that addresses the issues of domestic violence, self esteem, raising children in the United States and other issues that Latinas face.  Mara doesn’t just want to succeed, but she wants to give back and help other women.

I’m confident that Mara will succeed, and that she will do it differently.  She will do it with empathy and with a tribe of supporters.

Cause of Death: Bad Neighborhoods

Although life expectancy in the US has increased by 30 years in the last century, if you live in a neighborhood with high poverty rates, chances are, you and your family can’t expect to live as long as those living in affluent communities. People who live in West Oakland die an average of 10 years earlier than those who live the Berkeley Hills and Bay View/Hunter’s Point residents die 14 years earlier than those living on Russian Hill.

A report published in Race Poverty and the Environment, a project of Urban Habitat shows that the neighborhood you live in directly impacts your health.

Bob Prentice, Director of the Bay Area Regional Health Inequities Initiative (BARHII) writes that physical and social improvements such as food and water sanitations, workplace and traffic safety, declines in tobacco use, and housing conditions have contributed more to life expectancy than advances in antibiotics and vaccines over the past century.

Community economic development may have more than an economic impact on low-income communities; it may help people in these communities live longer and healthier lives. Women’s Initiative has been awarded a grant from the UCSF’s University Community Partnerships Council to investigate the relationship between economic development and health. Together with our university partners, Dr. Claire Brindis and Dr. Mary Kreger and at the Philip R. Lee Institute for Health Policy Studies at UCSF Women’s Initiative will be studying the impact of microenterprise development on community health and well-being, especially that of mothers and their children.

 

"Miss Karen's Krew"

Recent Women's Initiative graduate Oriana Bolden created this heartwarming video about her Simple Steps class at Women's Initiative, led by trainer Karen Auguste.  These 3 short minutes really capture the warmth, support and community that happens in our classes.

Thank you Oriana!

Women's Initiative in San Francisco Magazine

Beautiful article in this month's San Francisco Magazine on 'Reinvention'.  Women's Initiative CEO Julie Castro Abrams is quoted and graduates Isabella Guajardo and Emily Dods are featured. 

Hamburg's Blog on Women's Initiative

Liz Hamburg, founder and president of Upstart Ventures was in the Bay Area last week for the Microfinance USA 2010 conference.  She spent a few days with Women’s Initiative, learning more about what we do and meeting our clients.  Read about her experiences in her blog.

 

More in Need and Little Relief in Sight

Are Bay Area non-profits keeping up with the recession? The United Way’s recently released Bay Area Nonprofit Pulse Survey indicates that while non-profits are doing more with less, just three percent are seeing improvements, and one in four have had to eliminate services.

More than six in ten non-profits reported an increase in demand for services last year and four in ten were not able to meet those demands.

Unlike for-profit businesses, demand and revenues often negatively correlate in the non-profit sector. Since the beginning of the Great Recession growing demand for services has been accompanied by declining revenues from both private and public sources. More than half of non-profits reported a drop in revenues in 2009.

Many non-profits reported tapping into reserves to cover costs last year which will be painfully felt in coming years if demand for services remains high. Anne Wilson, CEO of United Way of the Bay Area says that those hit hardest by the recession may take years to get back on their feet.

Other ways that non-profits are stretching resources include collaborating with other organizations such as the United Way’s SparkPoint Oakland Center to bring together a number of non-profit organizations including Women’s Initiative for Self Employment. Non-profit organizations are also working with more volunteers to increase levels and quality of service without increasing costs.