Black-Owned Businesses See 14% Increase, Reflecting Positive Growth Amidst Challenges
Black-Owned businesses are still underrepresented according to the Black population share in America.
According to numbers from the latest available U.S. Census, Black-owned businesses have increased by 14% since 2020. While the increase in the number of Black-owned businesses is a positive sign, Black-owned businesses are still underrepresented according to the Black population share in America. And, the growth is concentrated in a few industries.
Healthcare and social services comprised the bulk of Black-owned businesses in 2021, followed by professional, scientific, and technical services. Administrative/waste management/remediation services round out the top categories. According to a January 2023 Pew Research Center survey, approximately 60% of Black adults indicate that supporting Black businesses is either an effective or a very effective strategy for gaining momentum toward equality in the United States. The same survey also showed that nearly 40% of Black adults believe that having Black-owned businesses in Black communities would be similar to supporting Black businesses and establishing a Black national political party.
In December 2023, the White House drew attention to the rise in Black businesses through a fact sheet. The sheet called attention to several initiatives that the Biden-Harris Administration spearheaded, including the Small Business Community Navigators Pilot Program, which dedicated $100 million across 51 organizations, including U.S. Black Chambers of Commerce and the National Urban League. According to an SBA analysis, the Community Navigators program provided training and counseling to over 350,000 small businesses, and 43% of those businesses were Black-owned businesses. The $100 million marked the largest ever federal investment into supporting minority small businesses. In addition to this, the Small Business Administration increased its share of the loans going to minority-owned businesses from 23% to 32%.
As the fact sheet states: “When Black businesses do well, they create jobs, generate wealth in their local communities, and make the broader economy stronger.”
That quote from the fact sheet is strongly supported by a 2020 report from the Brookings Institution that states that if Black businesses had access to the same capital and resources of white businesses, the American economy would experience an unprecedented explosion.
In an encouraging sign, Black women have steadily made gains over the last three years, rising from owning 37% of Black businesses in 2020 to approximately 42% of Black-owned businesses by 2023, approaching gender parity.
According to the Brookings Institution, male and female Black business owners were likelier to cite a desire to assist their community as a reason for starting their businesses.
Despite the difficulty in securing funding, Black businesses experienced a boon during the pandemic, which Diamonte Walker, the deputy executive director of the Urban Redevelopment Authority of Pittsburgh, said is a signal of the progress that could come into other markers of Black financial wealth. Walker told US News & World Report, “You see a glaring wealth gap between Black people and white people. That disparity is felt not only on an economic level but on a psychological and emotional level,” Walker said. “As these Black businesses start to thrive, it signals what’s possible.”
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