Pandemic Led to More Black-owned Businesses but Exacerbated Their Challenges

Cheerful small business partners in restaurant.

Cheerful small business partners in restaurant. iStock.com/SouthWorks

 

Connecting state and local government leaders

A new report says that state and local governments must commit to creating more opportunities for Black-run firms, including through the infrastructure act.

While the pandemic led to an increase in Black-owned businesses, Black owners were affected the most by Covid-19, exacerbating the challenges they already faced, according to a report by Brookings.

Even prior to the start of the pandemic in March 2020, no metropolitan area in the U.S. had a share of Black-owned employer firms that corresponded to or surpassed the Black population in the area.

The metro areas with the highest representation of Black-employer businesses in 2019 were:

  • Oxnard-Thousand Oaks-Ventura, California
  • St. Louis
  • Fayetteville, North Carolina
  • Los Angeles-Long Beach-Anaheim, California
  • Washington, D.C.-Arlington-Alexandria, Virginia-Maryland-West Virginia
  • Worcester, Massachusetts-Connecticut
  • Cape Coral-Fort Myers, Florida
  • Columbus, Ohio
  • San Francisco-Oakland-Hayward, California
  • Rochester, New York

In 2019, about 4% of Black-owned businesses were employer firms, compared to 19% of white-owned businesses, the report shows. If Black businesses accounted for 14% of employer firms (equivalent to the total U.S. Black population), there would be nearly 800,000 more Black businesses, the Brookings report notes.

Covid-19 heightened the challenges that small businesses owned by people of color faced before the pandemic, according to findings from the Federal Reserve System’s 2021 Small Business Credit Survey.

While most small-business owners reported undergoing financial difficulty during the pandemic, the highest percentage was reported by Black business owners (92%), the survey says. Following Black businesses were Asian American-owned firms (89%), Latino- or Hispanic-owned firms (85%) and white-owned firms (79%).

Expanding Black-owned Businesses 

Here are some federal and metropolitan policy solutions suggested by Brookings to expand Black businesses:

  • Expanding the Minority Business Development Agency, a federal agency dedicated to the growth and global competitiveness of minority business enterprises and its partnerships. 
  • Committing to opportunities for Black-owned businesses in infrastructure spending. This will allow leaders to follow through on their promises to lift the Black community by formalizing and building relationships with the Black businesses that create wealth for these communities.
  • To ensure public funds are managed by people who look like the public, officials should seek investments with diverse fund members. This also leads to diversity in investments. Brookings goes on to say that localities “should demand” that those who oversee their funds and assets should at least 30% women and people of color.
  • Leveraging philanthropy to support structural change that can provide temporary relief. However, philanthropic giving must encourage the kind of structural change at the federal, state and local levels that will allow the economy to work for everyone.

For more information from the Brookings report click here.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.