Black Entrepreneurship’s Lethal Pre-Existing Condition: The Racial Wealth Divide During The COVID Crisis
By April 6, 2021 //
- 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.
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.
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%. 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. As income climbs in recent years, revenue has continued to decline.