Black-Owned Businesses Are Thriving And Growing, Largely Due To Black Women
When the COVID-19 pandemic hit the U.S., Black Americans were the first to be fired and the last to be rehired when the recovery began.
That led many Black Americans to take their careers into their own hands and start their own businesses. According to the National Bureau of Economic Research (NBER), Black-owned businesses in America are growing and thriving, in large part due to Black women.
A working paper by the NBER found ZIP codes across the country that included a higher proportion of Black residents, especially those in higher median income Black neighborhoods, had higher growth in startup formation rates.
Data provided to The Hill by University of California economist Robert Fairlie, show there’s been a 33% increase in Black male active business owners and a 22% increase in Black female active business owners between the first quarter of 2020 and the third quarter of 2021.
Karen Bennetts, a board member National Association of Women Business Owners (NAWBO) told The Hill the pandemic created new obstacles for women. Millions of working women were forced to leave their jobs to take care of their children, but the loss in income also hurt.
A lack of opportunity may have also led to the growth of Black female-owned businesses. Black women and those without college degrees were looked at last when hiring restarted and workers began demanding more pay and employers began adding incentives such as paying for college, signing bonuses and health insurance.
Experts say now that the Black-owned businesses that started during the pandemic need to be supported in order to keep growing. That includes access to credit, funding, and more. Systemic racism in banking has made it harder for Black women to get bank loans leaving many to self-fund and use other resources at their disposal.
According to JPMorgan, 61 percent of Black women were forced to self-fund their businesses instead of securing a loan from a bank. In comparison, 47 percent of white women and 73 percent of White men self-fund their businesses.
The Biden Administration is making moves to give minority businesses the help they need. In June the administration announced it will double the number of federal contracts given to small, minority-owned businesses by 2025. President Biden also plans to expand access to low-cost loans and investments through the State Small Business Credit Initiative.