Black-owned businesses thrive on black women
When the COVID-19 pandemic hit the United States, black Americans were the first to be laid off and the last to be rehired when the recovery began.
This has 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, thanks in large part to black women.
An NBER working paper found that 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 creation rates.
Data provided to The Hill by University of California economist Robert Fairlie, show that there was a 33% increase in the number of black male active business owners and a 22% increase in the number of black female active business owners between Q1 2020 and Q3 2021.
Business Insider and Forbes also discussed the growth of black-owned businesses and how black women are leading the charge.
National Association of Women Business Owners (NAWBO) board member Karen Bennetts told The Hill that the pandemic is creating new barriers for women. Millions of working women have been forced out of their jobs to care for their children, but the loss of income has also hurt.
A lack of opportunity may also have led to the growth of Black women-owned businesses. Black women and those without a college degree were considered last when hiring restarted and workers began demanding more pay and employers began adding incentives such as payment of education, signing bonuses and health insurance.
Experts now say black-owned businesses that started during the pandemic need support to keep growing. This includes access to credit, finance, etc. Systemic racism in banking has made it harder for black women to get bank loans, leaving many to self-finance and use other resources available to them.
According to JPMorgan, 61% of black women have been forced to self-finance their businesses instead of getting a loan from a bank. By comparison, 47% of white women and 73% of white men self-fund their businesses.
The Biden administration is taking steps to give minority businesses the help they need. In June, the administration announced it would double the number of federal contracts awarded to minority-owned small businesses by 2025. President Biden also plans to expand access to low-cost loans and investments through through the state’s Small Business Credit Initiative.