Black Entrepreneurship’s Lethal Pre-Existing Condition: The Racial Wealth Divide During The COVID Crisis

Key Takeaways:

  • Black America was in an economic crisis before COVID.
  • Growth of Black entrepreneurship has not corresponded with economic growth.
  • To produce more personal and community wealth from Black entrepreneurship, public and private sector spending should be intentionally channeled to Black-owned businesses.

Overview

Much like the impact on individuals, the severity with which COVID-19 continues to ravage Black businesses has everything to do with their precondition. To focus primarily on the negative impact of COVID-19 on Black businesses fails to recognize the poor economic health of Black entrepreneurs and small businesses before the COVID crisis and the pre-existing conditions which set the context for recent trends. Despite strong entrepreneurial traditions within Black America, which date back to the very beginnings of the United States, the pre-COVID state of Black business, indeed of Black economics generally, was itself in need of redress. A well-documented history of imposed inequality and denial of wealth-creating opportunity had already left Black America in a pre-COVID economic crisis and a business community largely excluded from avenues of development or expansion.

Key Findings:

Increasing Black Entrepreneurship Has Not Corresponded With Economic Growth:

Black entrepreneurship greatly increased between 1992 and 2012, from 3.6% of all firms to almost 10%. Yet even with Black entrepreneurship increasing almost threefold, the proportion of Black revenue decreased from 1% to 0.5%.[1] Also during this time period, Black median income did not increase with Black entrepreneurship. In fact, median Black household income only increased by just over $3,500, after sharply declining in 2000 and 2007.[2] As income climbs in recent years, revenue has continued to decline.

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Author: Jared Ball
Emancipatory Journalism & Media Jared A. Ball is a father and husband. After that he is a professor of Media and Africana Studies and produces multimedia for imixwhatilike.org. > Dr. Jared A. Ball

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