Greg Abbott celebrates growth in women-owned businesses in Texas, overlooks meaningful details

In an email blast, Greg Abbott’s campaign said Texas businesses owned by women flourished with Barack Obama in the White House.

Abbott, the attorney general and Republican gubernatorial nominee, wasn’t saluting the Democratic president. In the July 10, 2014, email message, Kim Snyder, Abbott’s deputy campaign manager, called Texas the "land of opportunity – especially for women." Texas does better than other states, Snyder wrote, adding: "Let’s compare: the growth rate of women-owned businesses in Texas has nearly doubled that of the nation since President Obama has taken office."

A reader, bringing the email to our attention, wondered about the described growth rates.

To our inquiry, Abbott spokesman Avdiel Huerta said by email Abbott’s near-doubling reference was based on reports by American Express OPEN, which American Express describes as the leading payment-card issuer for small U.S. businesses.

According to the 2013 State of Women-Owned Businesses report, Huerta said, there were 8,617,200 woman-owned U.S. firms, including 737,300 in Texas, in 2013. In 2007, AMEX said there were 7,793,139 woman-owned firms nationally and 610,007 in Texas, Huerta said.

"Based on these numbers during the 2007-2013 period, which is approximately the time President Obama has been in office," Huerta wrote, "the number of woman-owned firms grew by ~10.57% nationally, and by ~20.87% in Texas – nearly double the rate of growth."

A hitch in this giddyap: Obama’s first term as president began in 2009.

Still, we spotted the cited estimates in the report, which said its tallies were based on an outside firm's extrapolations starting from U.S. Census Bureau business surveys taken every five years; the government’s latest available figures trace to the 2007 surveys. The report said: "Data from the past three census surveys – 1997, 2002, and 2007 – were collated, analyzed and extrapolated forward to 2013, factoring in relative changes in Gross Domestic Product (GDP) not only nationally but also at industry and state levels," with the GDP data coming from the federal Bureau of Economic Analysis.

Upshot: Nationally from 1997 to 2013, the report said, the number of women-owned firms increased by 59 percent – and women-owned firms in Texas increased by 93 percent, the second-highest growth among the states behind the 112 percent surge experienced in Georgia.

"The states with the greatest number of women-owned firms are, naturally, the most populous states," the report said. "California is home to the greatest number of women-owned firms in the country, and is the only state in which there are 1 million or more women-owned firms... California is followed by Texas, New York, Florida and Illinois. Rounding out the top ten are Georgia, Pennsylvania, North Carolina, Ohio and Michigan," the report said.

Nationally, women-owned firms account for 29 percent of all enterprises, the report said, but women-owned firms also only employ 6 percent of the country’s workforce and contribute just under 4 percent of business revenues—roughly the same share they contributed in 1997.

To our inquiry, the Michigan-based researcher behind the report, Julie Weeks, said by phone the growth in women-owned businesses in Texas has outpaced growth nationally, but it’s meaningful to look at how states compare in the number of employees in women-owned firms and annual revenues, a metric that Weeks folds in with growth rates as "combined economic clout."

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By her clout measure, averaging together rankings of growth in the number, revenue and employment of women-owned firms, Texas ranked 11th among the states and the District of Columbia for 1997 through 2013, according to the 2013 report. Weeks told us an updated report, drafted at the time Abbott’s camp sent out its email blast, shows Texas ranked ninth in 2014 by the clout measure. A March 26, 2014, press release announcing the 2014 edition said Texas enjoyed a 98 percent spurt in women-owned businesses from 1997 into 2014, a growth rate second only to Georgia’s 118 percent. Among the nation’s 25 most-populous metropolitan areas, San Antonio had the No. 1 combined economic clout score from 2002 into 2014, the release said.

A spokeswoman for AMEX Open emailed us a chart showing trends in the growth of women-owned firms nationally and in Texas from 1997 into 2014. From 2007 to 2014, the figures indicate a national growth of 17 percent in women-owned firms; Texas saw a 24 percent increase. However, AMEX spokeswoman Elisha Stavropoulos said state-by-state figures weren’t published at the time Abbott’s email blast went out; see the report, posted online in August 2014, here.

Source: AMEX Open, August 2014

Another perspective

For another assessment, we reached California-based economist Alicia Robb at the recommendation of the advisory National Women’s Business Council, a federal body. In April 2014, Robb co-authored a paper for the council cautioning that less than 30 percent of U.S. businesses are owned by women and only 12 percent of the firms employ anyone other than the owner herself. Only 2 percent of such firms have 10 or more employees, the paper said.

By email, Robb told us Weeks’ methodology was adequate for estimating the growth rate in women-owned businesses, but she said that indicator alone isn’t very meaningful since any growth would look impressive considering how few businesses were previously women-owned. It’s "a bit misleading in that the NUMBER of businesses is increasing at a faster rate, but that is more a reflection of the lower base," Robb said. "If you look at growth in sales, employment, and payroll, women-owned businesses are actually growing more slowly" nationally "based on the most recent" data from the U.S. Census Bureau.

A chart in the 2014 paper indicates women-owned firms generated 4 percent of all U.S. business receipts in 2012, amounting to no change from five years before. Nationally, according to the paper, the number of women-owned businesses escalated by 65 percent from 1997 into 2012, outpacing the 44 percent increase in all businesses. Then again, the 66 percent growth in receipts for women-owned-firms trailed an estimated 91 percent growth in total U.S. business receipts, the paper said.

Our ruling

Abbott said the "growth rate of women-owned businesses in Texas has nearly doubled that of the nation since President Obama has taken office."

A reasonable estimate shows the described growth rate in Texas was nearly double the national rate from 2007 into 2013. Then again, Abbott’s trumpeting of Texas under Republicans versus the country under Obama also pokes at the last two years of George W. Bush’s presidency, which the Abbott email didn’t acknowledge. Also, the implied message that women-owned businesses are booming ignores that most women-owned firms remain extremely small and don’t generate huge revenues.

We rate this statement Half True.

HALF TRUE – The statement is partially accurate but leaves out important details or takes things out of context.

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