From the Inkwell of: Bartholomew J. Worthington III
There is really no way to sugar coat it: the Black community is in extremely bad shape. Our family structure is fractured. Our neighborhoods are neglected and downtrodden. Our institutions have sold us out to the highest bidder (I'm looking at you UNCF AND Los Angeles NAACP). We are systematically besieged from all angles.
By any quantitative measure, the numbers are sobering. Only 52% of young Black men graduate high school in 4 years. 60% of young Black who don't finish high school will spend time incarcerated. Black households have only one dollar of wealth for every six dollars held by white households.
Blacks experience more violence, poverty and discrimination. Blacks are also incarcerated at higher rates and employed at lower rates than their white counterparts.
Our unemployment rates are - and have been for the better part of the last 6 decades - double that of the general population. Currently, while the overall unemployment rate is 6.6%, it stands at 12.1% for Black job seekers. For our young people, ages 16-25, the unemployment rate is approximately 25%.
And this trend isn't restricted to just school dropouts. A recent study (A College Degree is No Guarantee) revealed that even Black college graduates ages 22-27 struggle more than their counterparts to find jobs. Their unemployment rate of 12% once again doubles the overall unemployment rate of 5.6%. The ramifications of these trends do not bode well for the economic future of our youths, individually, or the Black community collectively.
Simply put, in addition to having to deal with the normal challenges of adjusting to adulthood, our young people also find themselves struggling to overcome the historical and systematic inequities of rigged labor market. But while scholars research the issue and present their findings. While politicians read these reports and seek to spin them to fit their particular agenda. While our "leaders" bemoan, weep and wail publicly, but present no viable solutions.
While all this is occurring, a solution is staring us in the face, as brilliant in its effectiveness as it is in its simplicity. Black business ownership holds the promise of closing the unemployment gap. Rapidly and permanently.
First the good news. A survey by the Census Bureau revealed that Black business ownership rates increased by triple the national rate of all businesses between 2002 and 2007. During the period highlighted, Black business ownership increased by 60.5% while the rate of increase overall was 18%.
The earning of Black owned businesses also increased by 55% to $137.5 billion. Overall, Black owned businesses accounted for 7.1% of all businesses nation wide. Now for the not so great news.
Of the 1.9 million businesses that are Black owned, only 107,000 reported actually having employees (921,000). It turns out that a significant majority of Black owned businesses - 1.8 million to be exact, are extremely small operations with the owner/founder as the only paid employee.
Additionally, Black owned businesses still experience significant challenges accessing the capital necessary to accelerate their growth. In fact, one metric that has declined is the lending to Black owned business. Prior to the Great Recession, Black owned enterprises received 8.2% of all SBA loans compared to a paltry 1.7% in 2013.
A study (Race and Entrepreneurial Success ) found that Black businesses have lower sales and profits, hire fewer employees, have smaller payrolls and higher closure rates than white owned companies. The study also identified lower levels of start-up capital as the single greatest contributing factor to the disparity in the performance between Black and white owned businesses.
A 2007 survey conducted by the Gazelle Index of 350 CEOs of Black owned companies revealed that 64% of the employees in Black owned businesses were Black.
The takeaway is simple: Increasing both the rate of Black business ownership AND the size of current Black owned businesses is the simplest and most effective way to address the stubbornly high levels of Black unemployment. That means, we need to stop asking, "How do we reduce Black unemployment?" .
Instead the question we should be seeking to answer is , "How do we INCREASE the rate of Black business ownership as well as grow currently Black owned businesses?"
An effective response to both parts of that question will begin to address many of the challenges we face as a community.
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