Women have seen many symbolic strides over the last 25 years in Arkansas, particularly working women. Both former Senator Blanche Lincoln and current Gov. Sarah Huckabee Sanders made women’s history by winning their elections in 1998 and 2022, respectively. In 2018, a record number of women were elected to positions in the state legislature, beating the record set in 2009 by one. Several of the state’s most prominent utility companies are now run by women, as well as Arkansas Children’s, Stone Bank and ArcBest, to name a few.
But despite progress in elevating women to the highest ranks of leadership, Arkansas has seen an overall decline in women’s labor force participation over the same period of time. According to the St. Louis Federal Reserve, women’s labor force participation rate in Arkansas declined by 5.4% between June 1998 and June 2023. Part of this decline can be attributed to women’s disproportionate exit from the workforce after the COVID-19 pandemic, which the U.S. Chamber of Commerce estimated left nearly one million women missing from the workforce nationally.
The pandemic exacerbated barriers women in the workforce have been facing for decades including lack of child care, low wages and impediments to entrepreneurship. These barriers are felt acutely in Arkansas, where only four in 10 working parents can find licensed child care, women earn lower wages and women-owned businesses are less likely to receive government-backed small business loans. Breaking down these barriers is vital to families’ success, as they increasingly rely on women’s incomes, particularly that of mothers.
Lack of Child Care
Working women in Arkansas face multiple barriers when it comes to child care in the state, ranging from access to quality to cost. Arkansas ranked fifth in percentage of parents of young children who experienced child care-related job disruptions between 2016 and 2018. A report from the U.S. Chamber of Commerce shows this is disproportionately affecting working mothers, particularly in Arkansas where 43% of women cited child care as their primary reason for leaving employment, compared to 18% of men.
Access to child care is such a key issue for working women in the state because it impacts women on both ends of the socioeconomic spectrum. Average child care costs in Arkansas can be up to 12% of median household income, which limits access for low- to moderate-income women. Conversely, the highest-income neighborhoods in the state are located in child care deserts at twice the rate of the lowest-income neighborhoods, limiting access even for those who can afford child care.
While working mothers across the socioeconomic spectrum are affected by this problem, single working mothers disproportionately feel its impact. This is particularly relevant in Arkansas where one analysis of U.S. Census data found the state to have the eighth highest number of single mother households. Single working mothers typically are the main or sole source of income for their family, making child care simultaneously a necessity and a greater burden on the household budget. Additionally, this issue disproportionately impacts women of color, as they are single parents of young children at higher rates.
The pandemic only highlighted and exacerbated the child care crisis as schools and child care programs closed. Mothers were forced to balance caregiving responsibilities while also working from home. For essential workers, who are disproportionately female and still had to report to work, the challenge became finding child care that was available and safe for their family. This led to millions of women leaving the workforce nationally between the start of the pandemic and 2022. While men regained all jobs lost during the pandemic by 2022, women were still short by 1.8 million jobs. Mike Preston, then Arkansas Secretary of Commerce, said child care was the most common factor keeping women in the state out of the workforce during the pandemic.
While the pandemic worsened the existing lack of child care and presented new challenges for working mothers, it also presented new opportunities. The CARES Act, passed in 2020 in response to the pandemic, allocated $41.5 million in supplemental Child Care and Development Block Grant (CCDBG) funds to Arkansas that were used to support essential workers and providers that stayed open throughout the pandemic. CCDBG funds are typically a single annual allocation to states to help subsidize child care for eligible families.
With the passage of the American Rescue Plan in 2021, the state received another $464.4 million in funding dedicated to child care. This funding allows states to exercise more discretion and flexibility in its allocation than typical CCDBG funds. States have until Sept. 30, 2023, to commit the funds and another year to fully expend the funds.
This presents not only an opportunity for public investment in child care infrastructure to support working mothers, but private investment, as well. A 2022 report by the Arkansas Women’s Commission explicitly listed engaging the business community in addressing the state’s child care challenges as one of its key recommendations.
“It is imperative that policymakers and business leaders work together to address the barriers to child care access, cost and quality to ensure that women do not have to make the difficult choice between participating in the workforce and prioritizing their children’s well-being,” says Angela Duran, executive director of Excel by Eight, a statewide coalition committed to improving children’s health and educational outcomes.
Employer-sponsored child care, flexible work arrangements, paid time off and family leave, as well as advocacy for public investment in child care are all ways businesses can help families balance workforce participation and child care responsibilities.
Low & Unequal Wages
One driver of the child care crisis is the low wages among early childhood educators, who are primarily women. According to the University of Arkansas for Medical Sciences (UAMS), early childhood educators may earn as low as $24,000 a year, making it difficult to attract and retain talent. But low wages in the state present barriers for many working women, not just those in the child care industry. Despite the minimum wage increasing to $11 over the last few years, more than half of all jobs in the state pay less than $15 an hour. Women feel these impacts disproportionately, as they make less than men in Arkansas across all educational levels and make up 69% of the state’s low-wage workforce. Low wages coupled with rising inflation rates are making it even harder for working women to afford necessities like child care, housing and health care, which can lead to gender disparities in childhood well-being, housing stability and health outcomes.
Low wages can also persist due to the structure of Arkansas’ public benefits system. Certain public assistance benefits, which can assist low-wage workers in paying for necessities like food, child care and health care, have income eligibility limits in the state. Some workers, particularly single female-headed households, may decline an increase in wages if it means losing public benefits that cover more household expenses than a pay raise would. This is referred to as a “benefits cliff” and creates a real barrier for working women who want to advance in their workplace, but can’t do so at the expense of their public assistance benefits.
Even for women who are able to secure an adequate wage, unequal wages persist. Research from the Women’s Foundation of Arkansas (WFA) found women earn 77.8% of what men do in the state. This disparity is greater for women of color, especially those in southwest and southeast Arkansas making only half of their white male counterparts’ earnings.
In order to break down the barriers presented by low and unequal wages, policymakers, elected officials and business and community leaders must think creatively about pay transparency, workforce development programs and other innovative ways to support women and their families while also giving them opportunities to advance in their careers.
Entrepreneur Access to Capital
For women who work for themselves, there are additional and unique barriers to success. These barriers have impacted an increasing number of women over the last decade as the number of women-owned small businesses increased by nearly 78%. As of 2022, 43.5% of small businesses in Arkansas are owned by women.
One of the main barriers faced by female entrepreneurs in the state is accessing the capital to start or sustain their small business. This is not surprising, as 81% of entrepreneurs access funding through personal net worth, family wealth or connections to networks, all of which women typically have less access to than men. Both market trends and gender disparities have contributed to this issue.
One market trend driving this problem is the decline in the number of community banks over the last decade. In Arkansas, the number of community banks declined from 122 to 78 between 2013 and 2023, in part due to the effects of the 2008 recession and an increase in bank mergers. Data from 2009 showed that, on average, only about $30,000 (or a little less than $43,000 in today’s dollars) is required to start a business. Even so, larger banks are less likely than community banks to make loans less than $100,000, as they aren’t profitable.
Additionally, gender inequities contribute to the disparities in capital available for small business owners. A report by the Winthrop Rockefeller Foundation found that women-owned small businesses in Arkansas sought funding at a lower rate than male-owned businesses, primarily due to fears of being denied due to their credit history. This fear isn’t unfounded as the report also showed women-owned businesses received less than 8% of Small Business Administration (SBA) 7(a) loan dollars. These 7(a) loans are government-backed small business loans and are the most common loan program administered by the SBA.
This issue disproportionately impacts minority women entrepreneurs. In a report by the WFA, minority women entrepreneurs listed access to capital as the top perceived barrier to starting a business in Arkansas. In the same report, approximately 20% of focus group participants noted use of a commercial bank loan for business capital. The majority relied on self-funding or familial contributions for business capital, echoing national data.
As with child care, the pandemic intensified the existing issue of access to capital, while also presenting new opportunities. Women-owned businesses received fewer Paycheck Protection Program loans and less in loan amount on average than male-owned businesses or businesses that did not answer gender on the application.
In Arkansas, philanthropy, community development institutions and entrepreneurial support organizations recognized this disparity and worked to provide additional support to entrepreneurs through grant programs, technical assistance, advocacy and network-building opportunities. In the wake of the pandemic, new programs have emerged to support women entrepreneurs, including the WFA Women’s Economic Mobility Hub and the Venture Center’s VCWomen Achieve Mentorship Program.
Breaking down barriers to women’s participation and success in the workplace is imperative for sustaining the progress made in Arkansas over the last 25 years. The issues facing working women do not just impact their lives and the lives of their families; they impact the entire state. Child care issues result in an estimated $865 million loss annually for the Arkansas economy. The poverty rate is estimated to drop more than 5% if Arkansas achieved equal pay. And championing the inception and expansion of women-owned small businesses can provide local economic stimulus through reinvestment in the community and job creation.
Solving these problems means a brighter economic future for working women and all Arkansans. The last quarter of a century has expanded opportunities to women in the state, but the work of the future is ensuring these opportunities are equitable, sustainable and allow women across the workforce to succeed and thrive.
Read the Arkansas Women’s Commission 2022 report at women.arkansas.gov.
TOP 100 WOMEN OF IMPACT IN ARKANSAS 2023
A Women’s Foundation of Arkansas Initiative