September 15, 2020
0 Comments
0

Equity through entrepreneurship: Why supporting Black-owned businesses matters

Building a more inclusive economy—where Black, immigrant, and women business owners thrive—will benefit everyone.

Black- and immigrant-owned businesses have shuttered disproportionately during the pandemic. Helping entrepreneurs of color thrive will be a key component to economic recovery. Photo by Mike Petrucci on Unsplash

EDITOR'S NOTE

We recently kicked off a new series of reporting that examines how individuals and institutions are playing a role in building equitable communities. We will be sharing data, insight, and interviews that show how leaders and their organizations can forge a future that provides access and opportunity for everyone to thrive.

COVID-19 has intensified America’s racial divide, affecting communities of color disproportionately, from health to financial stability. Black business owners are also feeling the effects from the crisis. One study from the New York Fed observed that they shut down at twice the rate as businesses operated by white owners.

The National Bureau of Economic Research uncovered similar findings: From February to April 2020, the number of active business owners in the U.S. dropped at a record rate of 22 percent, or 3.3 million businesses. Black and immigrant businesses were hit especially hard, dropping 41 percent and 36 percent, respectively. These figures represent the largest drop on record over a two-month period and losses were felt across nearly all industries.

The COVID-19 pandemic has disrupted everything from how we do business to how we send our kids to school.

But even as the country hunkers down, there’s been a spike in civic participation surrounding the fight against racial injustice, following several tragic killings of Black men and women at the hands of police. Centuries of systemic racism have come to bear in a national conversation about race and equity. Americans are protesting injustice in the streets, talking about diversity and inclusion at work, and donating at record rates to Black Lives Matter and civil rights organizations.

One way consumers are voicing their support for Black communities is by supporting Black-owned businesses. Doing so not only helps support those most severely affected by the pandemic, but it also presents a tremendous opportunity for the economy as a whole.

“It is important to support Black- and immigrant-owned businesses for two reasons. First, if we did so, we’d create over 10 million new jobs and add $300 billion in new worker income. And second—this is not conjecture—it has worked before. There are mountains of data to show the multiplier effect of being more inclusive,” Aaron T. Walker shared with us via email. Walker is the founder and CEO of Camelback Ventures, an accelerator based in New Orleans that supports underrepresented entrepreneurs.

“If we want to end this recession, let alone move toward a more just and equitable country, we must break the narrative that only supporting the (white) working class will get us there.” — Aaron T. Walker, Camelback Ventures founder and CEO

Studies, such as this 2016 report from the Center for Global Policy Solutions, have shown how much we stand to gain when we support entrepreneurs of color. The Washington-based think tank found that if the number of firms owned by people of color were proportional to their distribution in the labor force, these firms would add about “9 million jobs and about $300 billion in workers’ income to the U.S. economy.”

“If we want to end this recession, let alone move toward a more just and equitable country, we must break the narrative that only supporting the (white) working class will get us there,” Walker wrote.

Walker also pointed to the new book by Jim Tankersley, an economics and tax code reporter for The New York Times, called The Riches of This Land: The Untold, True Story of America’s Middle Class. In it, Tankersley cites a recent academic paper that found 40 percent of economic growth since 1960 came from being more inclusive around people of color and women.

For our own part, there are ways we can contribute to an inclusive economy.

  • Look for the “Black-owned business” label on business profiles in Google. The search engine also offers women-led and veteran-led labels for owners to self-identify.
  • Browse a curated Black business database, like this one from Five Fifths, which features Black-owned Amazon and Etsy brands.

  • Download apps such as EatOkra and Black Wallet to find Black-owned businesses and services, such as restaurants, salons, and daycares, near you.

  • Shop Black-owned food products online. The Food Network put together this list of food and wine companies started by Black entrepreneurs.

  • Invest in entrepreneurs of color. You can donate to grant-making organizations and accelerators, such as Walker’s Camelback Ventures or City Startup Labs, that invest in entrepreneurs.

  • Subscribe to newsletters like The Plug, which features stories about Black founders and the Black innovation economy.

Have a suggestion to add to this list? Email the editor: margaret@TheRenewalProject.com.