To Expand The Economy, Invest In Black Businesses
For example, Howard says, the median net worth for Black business owners is 12 times higher than Black non-business owners. Further, when examining the net worth of Black business owners in comparison to the net worth of white business owners, it becomes clear that entrepreneurship represents a pathway to narrowing the racial wealth gap. While whites have 13 times the wealth of African Americans, when comparing the median wealth of Black and white business owners, the median wealth gap decreases substantially.
Black-owned banks flourished in the 50s and 60s, but from 2001 to 2018, the number of Black-owned financial institutions declined over 50%. Today, that number is down another 9%, leaving only 21 Black-owned banks in the United States. For comparison, Wells Fargo, Bank of America, and JPMorgan Chase each manage well over $1 trillion in assets. It's I think unrealistic to expect traditional banks to all of a sudden be responsive to the needs of communities they have neglected and failed to invest in previously. Black-owned banks flourished in the 1950s and 1960s, but from 2001 to 2018, the number of Black-owned financial institutions declined over 50%, leaving only 21 Black-owned banks in the United States, and not one manages over $1 billion. The book also provides a new compilation of estimates of racial patterns of business ownership rates and business outcomes from the most widely used and respected sources of government data. Estimates of business ownership rates and performance are generated from public-use and restricted-access microdata, taken from published sources, and obtained from special tabulations prepared for us by the U.S.
Despite these initiatives, Groce concedes, "These communities are often over-mentored and under-resourced." Racial inequality in education, income, and wealth are well known; less understood are the large and persistent racial disparities in business ownership and performance in the United States.
In fact, less than 1 percent of venture-capital funding goes to Black-owned companies, points out John Rogers Jr., founder and co-CEO of Ariel Investments, a Chicago-based investment firm, citing the study. Few lenders, such as venture-capital firms, have provided funding to Black-owned business, according to a recent Morgan Stanley study.
The Minority Business Development Agency provides access to financing resources and some funding opportunities for minority business owners. The Small Business Administration is the only cabinet-level federal agency entirely dedicated to small businesses. It provides counseling, capital, and contracting expertise as the nation’s only go-to resource and voice for small businesses. In my interview with Navena Moore, the CEO of Auntie Vee’s Kitchen, I asked her, “what does black entrepreneurship mean to you? She mentioned how entrepreneurship and her ability to create was embedded in her. to It’s essential for people to know the value of ownership because it allows you to be in charge of your own limits.
Another entertainment significant factor in the approval rating of business loans to African American entrepreneurs is the location of the business. A substantial proportion of Black-owned businesses are located in geographic areas that serve the needs of African Americans.
However, increasing opportunities for the acquisition of human capital and business human capital should also be viewed as vital goals for minority business development. In particular, governmental programs providing mentoring, internships or apprenticeship-type training may help to reduce historical inequalities in business performance. These policies may serve as a substitute for the lack of opportunities to work in family businesses for some disadvantaged groups. The potential benefits may be large because simply increasing the number and average employment of minority businesses by only 10 percent would result in the creation of 1 million new jobs for minorities. Overall, our findings indicate that large racial disparities exist in business ownership and business outcomes in the United States. Our analysis of the confidential and restricted-access CBO reveals several important determinants of success in small business ownership, and causes of racial disparities in business performance.