Black-Owned Businesses Thriving Despite Early Pandemic Lows: Here’s Why
Black Information Network
Despite being hit the hardest at the beginning of the pandemic, Black-owned businesses are making a significant comeback.
Reports say the number of Black small-business owners is up 28 percent compared to before the pandemic. Black people are making greater gains in business than any other demographic — the number of Latino business owners increased by 19 percent and white and Asian-owned businesses saw a 5 percent increase.
U.S. News reports that 1.2 million African Americans are self-employed in 2022 compared to 1.1 million in February 2020.
Erica Groshen, a university senior economics adviser told U.S. News, “There have been two changes of late: one is the pandemic, but there was also the racial reckoning.”
During the summer of 2020, social justice protests called for white Americans to put their money where their mouth was and invest more in the Black community. Experts say this upward trend in the number of Black-owned businesses shows that companies may have followed through with their promises to support the cause.
Nationally, the pandemic sparked a huge boom in the creation of small businesses as more people resigned from their corporate jobs and became entrepreneurs. New business applications increased more in 2020 than they had in the past 15 years, according to USAFacts.
The biggest increases in business formation came from cities with large Black and Hispanic populations including Chicago, Detroit, Los Angeles, Houston, and Miami.
Economist Ron Hetrick said, “The good news of this whole thing is, when you see business formations occurring in very ethnically diverse populations, then that would typically suggest that you would start to see increased hiring from these populations as well.”
Despite the boom in Black-owned, there are still issues with these businesses surviving long term. Black businesses are opening at a rapid rate, but struggling with sustainment.
Black business owner Tracey Clark Jeffries said, “What Black-owned small businesses need is a more structured model that can help them sustain over a period of three to five years.”
Still, healthy Black businesses continue to be the key to healthy Black communities, according to Diamonte Walker of Pittsburgh’s Urban Redevelopment Authority.
“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,” said Walker. “As these Black businesses start to thrive, it signals what’s possible.”
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