childcare – Dickinson Law's Inside Entrepreneurship Law Blog

By: Allyson Lonas

Women entrepreneurs are facing unprecedented challenges during COVID-19. In this pandemic, women may not only be faced with the challenge of running a business from home but could be simultaneously in charge of their children’s care and maintaining the household. These women have been given the task of adapting to a new business environment, developing out-of-the-box thinking, and using their skills to conform to this new era of entrepreneurship. They have had to in order to keep their business afloat. So, we must prioritize these women and focus on providing capital to female business owners.

Why are women entrepreneurs suffering more than their male counterparts?

The COVID-19 global crisis has revealed that our daily lives are built on the unpaid work of women. Although women have outpaced men in college attendance and degrees, the number of women engaged in unpaid work continues to outpace that of men. Crises tend to reinforce the idea men are responsible for putting bread on the table while women should take care of the children. In the United States, statistics from 2019 reveal that the average hours per day parents spent caring for their children within the home was higher for women, even when these women worked outside of the home. In fact, a woman employed full-time spends an average of 2 ho urs on household activities and caring for family members.

According to the Bureau of Labor Statistics, the percentage of women engaging in household activities is 84.9% compared to 71.4% of men. Women spend three times as many hours as men in unpaid care and domestic work, limiting their access to opportunities in the workforce. This leads to women entrepreneurs being at the heart of the COVID-19 response.

As the formal and informal supply of childcare declines, the demand for unpaid childcare provision falls on these women. According to UNESCO, 1.37 billion students (80 percent of the world’s student population) are back home as COVID-19 closures expand. Overwhelmingly, this constrains a parent’s ability to work-from-home with children back in the household. According to the National Bureau of Economic Research, working women bear the brunt of the COVID-19 recession, unlike previous downturns that hit working men the hardest. In the aftermath of the global financial crisis, men suffered the majority of job losses because males dominated the manufacturing and construction industries which suffered the biggest blow. But, Sociology Professor Aliya Hamid Rao, at Singapore Management University, found women took longer to return to work even after the last downturn as a result of women taking care of their families.

COVID-19 provides different challenges; now, the hardest hit industries are those where workers cannot telecommute. And evidence suggests that working women are more likely to have jobs that do not allow them to telecommute. The majority of women-owned businesses are hair salons, nail salons, and hospitality/food service industries. Additionally, with women taking on the role of household maintenance, those hours spent at home taking care of their children are hours that could be spent on income generation. This burden is at the heart of the motherhood penalty in the workforce. It is devastating for women who have spent their whole life building their businesses, both economically and from a mindfulness standpoint. Their business is their livelihood, their success, and years of hard work.

What can women entrepreneurs do…

Even though many women entrepreneurs are overwhelmed with business operations and are worried about keeping their doors open, there is a solution to their problem. The solution involves support: on the governmental and community level.

On March 27th, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted. The relief package was a $2 trillion economic relief package to protect people from the public health and economic impacts of COVID-19.
The Women’s Business Enterprise National Council provides a variety of options for women: funding options, grants, and financial resources, and business support tools. The coronavirus relief options include the Paycheck Protection Program, EIDL Loan Advance (providing $10,000 of economic relief to businesses experiencing temporary difficulties), SBA Express Bridge Loans, and SBA Debt Relief.
For small business owners, the Paycheck Protection Program resumed accepting applications on July 6 and is a crucial loan program providing loan forgiveness for retaining employees during the pandemic. On the Women’s Business Enterprise National Council website (link above), there is a “learn more” button to take you to a particular funding option where you can access additional program information, frequently asked questions, and view a direct application.
In Pennsylvania, we are fortunate that the Pennsylvania Department of Community and Economic Development has specific programs and funding to ensure that financial assistance reaches minority-owned and woman-owned businesses. So note: if you are a woman entrepreneur in another state, check and you may have similar assistance waiting for you!

With so many options available, the process might seem overwhelming and difficult. To help, here is a quick guide to help point women entrepreneurs in the right direction.

Even the playing field for obtaining financial help for female entrepreneurs is far from level. A recent study found that men were significantly more likely to secure funding than women when presenting the same business concept. Fortunately, there are non-traditional ways to obtain funding. The Capital Access Lab is a national initiative that aids to find, promote, and provide new kinds of capital to underserved entrepreneurs, including women. It will provide capital in the range of $250,000 to $1 million into three to five investment funds.

In addition, there are other programs to provide support for women. The company, EnrichHer, helps fund small businesses created by women. Their mission is to focus on social change for women and create opportunities for women-led businesses.

Verizon is even launching a mentoring program for women entrepreneurs affected by COVID-19. This program will connect women entrepreneurs and business owners with a network of women business leaders to guide them through the pandemic’s challenges. The goal is to help women entrepreneurs in a variety of ways.

The Women’s Bureau also helps women by developing policies to protect the interests of working women, promoting equality and economic security, and promoting quality work environments.

…and how can we help?

Women entrepreneurs need us.

First, policymakers should consult women in economic planning and policies. Policies that do not consult women are less effective and create more harm. Before the pandemic, women struggled for equality, something that now seems to be further out of reach. The government and investors should refocus their attention once more on gender equality. Across the United States, 55% of the 20.5 million jobs lost in May were held by women. As the government shifts to rethinking its economy, it could aid the goals of equality. For example, improving the balance of women in companies’ leaderships. Government subsidies could be used to replace pay for workers who need to provide childcare during the crisis due to school and daycare closures and are therefore unable to work, conditional on a continued employment relationship (where they can return to work immediately). Then they could partner with investors to channel funds into companies led by women. It is important we prioritize women entrepreneurs and help provide capital to them.

Second, we need to spread the word and promote women-owned businesses. If you know a local vendor, maybe try her restaurant for lunch instead of a mainstream establishment. If you are going for a morning coffee, visit your local barista. A simple share on Facebook can increase the business’s advertisement reach.

Lastly, we need to show support. Evidence suggests the impacts of the COVID-19 global recession will result in a prolonged dip in women’s incomes and labor force participation. Although these women have conquered the challenge of developing online strategies, revisited their business plans, and adapted to the customers’ needs in a time of crisis, they still need us. Women entrepreneurs are at the heart of this crisis and they need to know we are here to help!

Allyson Lonas, at the time of this post, is a rising second-year at Penn State Dickinson Law. Originally from Johnstown, Pennsylvania, Ally attended The Pennsylvania State University for her undergraduate degree and has interests in corporate law, antitrust law, and government law. In her free time, pre-COVID-19, she enjoyed traveling.