The economic effects of structural racism are evident in the data on black-owned businesses in the United States. According to the most recent census, there are more than two million black-owned businesses, with 124,000 of them classified as “employing companies”. This means that they have employees in addition to the owner(s). These black business statistics demonstrate the depth of inequality that exists, while also highlighting the potential of the black business community.
Louis has the highest representation of the black population, which is reflected in its participation in black businesses. It is yet to be seen how the COVID-19 pandemic will affect black entrepreneurship, but it will be interesting to observe any changes in business ownership trends. In addition to the usual challenges of running a business, black business owners must also contend with a significant funding gap between black and white-owned businesses. The pandemic has exposed the painful impacts of structural racism, including higher mortality rates among blacks from the virus compared to whites. Research by the Urban Institute has shown that lack of access to seed capital and business networks can influence which industries black entrepreneurs choose to start their companies in. The use of personal stimulus checks for business start-ups and the fact that PPP funds do not reach black business owners are two sides of the same coin.
The SBSC is an annual survey of companies with fewer than 500 employees, representing 99.7% of all employing companies in the United States. To increase the number of black companies, we must remove barriers caused by racism and invest with a goal of profit. Although most black business owners were doing well before the pandemic, it has had a significant impact on their businesses. If black companies accounted for 14% of employing companies (the same as their share of the population), there would be 798,318 more black companies. According to a survey by the Black Chamber of Commerce, about 75% of black-owned small businesses experienced an increase in customers in the two months after George Floyd's death.
For African Americans in the United States, entrepreneurship is more than just owning a business and pursuing the American dream. To help federal government build capacity for financial institutions serving black entrepreneurs, the Department of Commerce's Minority Business Development Agency (MBDA) should be expanded.
