reports, in 1999, African Americans accounted for 11.74% of the civilian labor force and 11.28% of total employment, for a job deficit of 3.8% (where the share of African Americans’ total employment equaled their share of the civilian labor force). This is an improvement over the 4.6% job deficit of 1998. While black unemployment averaged a record low 8% in 1999, it remained just under twice the average for the country.
African Americans have also improved their relative income position over the last several years, Brimmer observes.
In 1998, blacks had $454.3 billion of money income or 8.30% of the total (estimated at $5,467.5 billion). This is an increase from 8.07% in 1997 and 8.26% in 1996.
The growth in employment in 1999 is estimated to have raised total money income to $5,788.7 billion, with blacks receiving an estimated $490.3 billion or 8.47% of the total. However, according to Brimmer, parity income for blacks (11.74% of the total) would have been $679.6 billion or $189 billion more than they probably received, for an estimated income deficit of 27.9%.
In 2000, Brimmer states that total money income in the U.S. may rise to $6,123.6 billion, with African Americans receiving $522.4 billion or 8.53% of the total. However
, parity income for blacks (at 11.82% of the total) would amount to $723.8 billion for a deficit of $201.4 billion or 27.8%.
Closing this income gap, and in somewhat direct correlation, the black wealth gap, will be a critical objective for creating greater pools of venture financing for African American-owned businesses.
SHOW ME THE MONEY
COOKE-WELLS: Capital access is the largest problem for the development of minority businesses. We needed to get some assessment of what the capital demand was. What were the kind of strategies that could be followed to increase capital flows to the minority business community? In the interest of doing that, we pulled together a task force, in November of 1998, in conjunction with the Milken Institute to quantify what the market was and to really look at some of the innovative strategies that could be used to increase capital flow.
Particularly, from the perspective of the MBDA, we’re interested in trying to get a sense of what is going on with some of the larger firms, because these are the firms that have the greatest economic impact. We’re looking at firms with sales over a million dollars. We’ve got about 3,000 African American firms; 9,000 Hispanic firms; 12,000 Asian American firms. That’s 24,000 firms, generating $106 billion in total sales, but the sales figure is about half of the overall sales of minority businesses. Obviously, it’s these larger firms that have an enormous economic impact.
We also wanted to look at what equity sources were currently out there and Fairview Capital Partners [a black venture capital firm] estimates that there is about $2 billion in private equity focused on minority business enterprises (MBEs), through a variety of different venture capital vehicles. However, the estimates [indicate] that only 1% to 2% of MBEs obtain equity through these types