Finding Financial Security During Recessions

The U.S. economy continues to exhibit weak signs of a recovery from the recession, as measured by growth in real domestic product. But, so far the recovery has not helped restore employment to 3 million pre-recession former full-time employees, some of whom may have already dropped out of the labor force because they can not find work. As such, the U.S. is experiencing the worst economic recession since the 'Great Depression of 1929'.

In such times, self-employment can be a better financial option to explore than seeking employment opportunities with existing businesses. For example, experienced workers can often start up their own successful businesses by drawing on their specialized skills; and they can compete with former employers by keeping their operating costs lower. My argument favoring self-employment, however, may be more compelling for women, minorities and the elderly for reasons stated below.

The article that is reprinted below was published initially in 2007 on this website entitled as "Women on the Road to Financial Freedom' .

It is fact that women gained the right to vote 1920 with the passage of the 19th amendment to the U.S. Constitution (Thank you Susan B. Anthony and Elizabeth Cady Stanton); but it is a misconception to think that the vote carried with it equal opportunity in the workplace or the ability to attain financial freedom. Women in the U.S. have traditionally been a secondary source of labor, particularly when men were drafted into the armed services during WW1 and WWII. But, after these wars ended, women either voluntarily withdrew from the labor force in order to return to their duties as homemakers or they were ‘asked’ to go home so that veterans could return to the jobs that women vacated. The availability of a 'back-up' labor force comprised of women was and is an incredible national resource; but it does not benefit women financially.

Forty years after American women obtained their right to vote in the U.S., by 1960 many women felt that they were still primarily homemakers; and no one except for a few researchers, myself included, attempted to quantify the value of their work at home. In 1963 Betty Friedman's publication of the 'Feminine Mystique' suggested that women were victims of a false belief that they should take their identity in the lives of their husbands and children. The book was quite controversial in its time. As a result, some attitudes changed about the purpose of education and the importance of careers for women; but these changes did not create a roadmap for women to follow in order to achieve financial freedom and security.

During the 60’s,70’s and 80’s, women in the workplace faced unusual double standards that are no longer prevalent today. They were not granted ‘paid’ maternity leave. The costs of child-care were not subsidized by credits against federal income taxes. Young married women were often denied promotions because employers anticipated that they would leave their jobs after they gave birth to children; and married women were frequently told that they should expect to earn less than their male counterparts because men had families to support. Confronted with these obstacles, most women in the labor force were not, and probably did not expect to be, on the road to financial freedom.

The 90’s marked the beginning of significant opportunities for women who were self-starters in business. The Civil Rights Act of 1964 prohibited discriminatory practices in voting, public education, employment and in federally assisted programs. The latter included federal loan programs to small business minorities including female minorities. At the corporate level, however, in 1987 Morrison wrote about the invisible, ‘glass ceiling’ that prevented women in corporate America from achieving positions at the highest levels. I am not convinced, as some research suggests, that the ‘glass ceiling’ disappeared by 1990 because as of 2005, women in 5 different educational levels earned substantially less than their male counterparts. For example, among persons 25 years and older with advanced or professional degrees, the median annual income was $71,918 for men and $49,319 for women (source: 2005 American Community Survey, U.S. Census Bureau, Table B20004). A study prepared by the Harvard Business School (HBS) concluded there were no differences between the income of men and women after accounting for experience and education. However, the HBS’s findings were not statistically significant because there were too few women who could be found to include in the study, relative to the sample size of the males. (http://glassceiling.org/InTheNewsFol...iclePage2.html).

Historically, the road for women who have attempted to achieve financial freedom in corporate America has been sabotaged in one way or another. Therefore, it should come as no surprise that among the wealthiest 40 men and women in America today, only 6 were women and all inherited their wealth from men: (1&2) Alice Walton & Helen Walton - $18 billion each from their Walmart inheritance, (3) Abigail Johnson - $12 billion, co-manages the Fidelity Investments with her father who was the founder, (4&5) Barbara and Ann Cox- $11.3 billion each, inherited Cox; and (6) Jacqueline Mars -$10 billion, inherited Mars Candies).

The good news is that many women have changed their prospective about joining corporate America in favor of staring their own businesses. The explosive impact of the Internet, once search engines made it accessible to multitudes of consumers, can be measured by the volume of Internet sales. It has offered women an option that is being explored. As such, it is the most important new development in the history of women’s rights since Elizabeth Cady Stanton’s and Susan B.Anthony’s efforts that resulted in women’s right to vote. The Internet is the road to financial freedom and women are on that road!