America is a place of new stories. A country that still attracts those looking to grow new ideas and that invites our people to invent a better life for themselves, their families, and their communities.
Everybody has faced challenges during the COVID-19 pandemic, but the past two years have shown in no uncertain terms that, despite the will of the American people, systems continue to impact different populations in significantly different ways.
These are not new problems – but they are grave. Besides serving as a reminder of our country’s failure to uphold core values, these systemic shortcomings also carry an economic toll. The consequence is an economic system in which Black households have a median net worth of just $17,000, about one-tenth that of typical white households1 , with Latino households facing a similar wealth gap. That means considerably less personal wealth to draw from, a reality that forces business owners to seek outside funding to cover startup costs. Somewhat predictably, however, loan requests from Black entrepreneurs are three times less likely to be approved than those of white entrepreneurs – a difference that persists even after accounting for credit scores and net worth. 2
Research also shows the gender pay gap puts a disproportionate strain on female entrepreneurs, and that men are still significantly more likely than women to secure funding when pitching an identical business. 3,4
And despite ideation and entrepreneurial aspirations not being limited to one geographical area, access to opportunity often is. Venture capital continues to consolidate at high levels – north of 80% – in just three coastal states: California, Massachusetts, and New York. 5
This pervasive inequity has lasting implications not just for historically underserved communities, but for the broader U.S. economy. Research has shown that higher levels of inequality cut into overall economic growth and make it likely that growth cycles won’t last as long. People at the lower end of the economic scale – equaling millions of Americans – are under-utilized. Their potential is stifled as they work in an economy that does not work for them. Left unchecked, our competitive strength is undermined, and the American dream weakened.