The Freeman
                              Foundation for Economic Education
                              Irvington-on-Hudson, New York 10533
                              (914) 591-7230


                       Women and the Market
                           by Sam Staley


     While leading feminists have been seeking political solutions
to the problems of women, it has become increasingly clear that
the real opportunities for women are coming from a source largely
ignored or berated by feminist groups: the market.

     Women now make up 44 per cent of the workforce, up from 32
per cent in 1960.  This "feminization" of the labor force has
dramatically altered the scope and dynamics of the economy, and
businesses now realize that they must cater to the needs of women
to remain competitive.  Herein lie real opportunities for economic
progress.

     "One of the most interesting things I see happening in the
late 20th century is that the corporation is changing because
women are starting to participate in it," observed economist
Jennifer Roback at a recent policy forum at the Cato Institute in
Washington, D.C.  "Women's greater participation benefits small
companies at the expense of big ones.  Big companies are not
willing to be flexible about child care and maternity leave and
home emergencies.  Small businesses can handle things like that,
and, in particular, your own business can handle it."

     Women now own 24 per cent of all businesses in the United
States.  While these companies are still concentrated in low
income service areas (over half earn less than $5,000 per year)
their representation is increasing.  The 1986 White House
Conference on Small Business serves as one indicator:
participation by women doubled from 1980.

     Traditionally, economic success for minority and
disadvantaged groups has come through business, not politics.
Jews, Asians, blacks, and Hispanics have all succeeded in the
American economy through employment in small businesses or
entrepreneurship, whether through storefront shops or professional
careers.  No group has been successful in using the political
system to affect wage differentials significantly.

     The answer, however, is not merely to get more women into
business.   Corporations, with their hierarchies of power-
brinksmanship, allow men to exercise their prejudices to the
detriment of women.  While some corporations are hiring more
women, large firms often institutionalize impediments to progress.
Furthermore, men may not realize that they are discriminating.  In
a recent Woman's Day survey, 81 per cent of women polled felt that
men underestimate them in the workplace.  Since men often dominate
decision-making in larger corporations, women are constantly
fighting the perceptions of their male supervisors.

     Nevertheless, with the current trend toward an economy driven
by smaller corporations, prospects for women are improving.
Deregulation has sparked entrepreneurship in many sectors of the
economy, and this trend has clear implications for the role of
women.

     Professor Roback notes that "We are starting to observe a
strengthening of the smaller firm as opposed to the larger firm
because the small firm can accommodate the other needs that women
have in their lives."  Women are beginning to dominate the labor
supply, and newer and smaller firms have the managerial
flexibility to use female workers more effectively.

     This road to economic development is not without precedent.
Every successful minority group in the United States has
progressed through entrepreneurship.  Asian-Americans provide a
telling example.  "No people who came to these shores of their own
volition," writes Peter Rose, Director of the American Studies
Program at Smith College, "ever suffered as much discrimination or
ostracism as did those from China and Japan."  Yet, Asian-
Americans, along with Jews, are the most upwardly mobile group in
the United States.

     The recent experience of Korean immigrants dramatically
illustrates this phenomenon.  Ivan Light, professor of sociology
at UCLA, recently noted that ethnic and immigrant businesses
provide an essential alternative to the general labor market.
Self-employment helped Korean immigrants overcome tremendous
disadvantages in the workplace and attain more secure work at
higher incomes, accelerating the pace of social mobility.

     The market provides a remarkable opportunity for minorities
and women.  When people shop for services in the Yellow Pages, or
buy a product on the supermarket shelves, they do not check the
ethnic background or sex of the producer.  Sexual discrimination,
like racism, cannot be legislated away because laws rarely change
attitudes.  By participating in the market, and taking advantage
of the trend toward small companies and entrepreneurship, women
will make more headway against discrimination than at any other
time in their history.
_________________________________________________________

Sam Staley is a free-lance writer and graduate student in
economics at Wright State University in Dayton, Ohio.  This
article is adapted from the April 1987 issue of The Freeman.