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How we can help Black entrepreneurs thrive in the modern economy

February 27, 2023 — Modern Economy Project

Black entrepreneurs and businesses are an integral part of the U.S. economy. But too often, federal policy supporting Black business does not match economic realities on the ground.

There are about 3.1 million Black-owned businesses in this country, which contribute over $200 billion to our economy every year and employ about 1.3 million Americans.

Yet historical barriers to financing continue to hold back Black businesses and make them more vulnerable to changes in the economy.

That's where the U.S. Black Chambers, Inc. (USBC) comes in. The USBC supports a network of African American Chambers of Commerce and business organizations, including by working with financial institutions to help Black-owned businesses gain greater access to credit and capital.

The Modern Economy Project is proud to call the USBC a founding member of our coalition, because we know it's imperative for our modern economy to work better for everyone – including for Black-owned businesses.

In honor of Black History Month, MEP recently sat down with USBC CEO and President Ron Busby Sr. to discuss how policy can be better connected with reality.

What are some of the unique challenges that you see your members and Black businesses across the country facing?

It has been a very challenging but rewarding time for Black-owned businesses. … We’ve all heard that when America catches a cold, the Black community catches pneumonia. And we saw that firsthand, in 2020, during the COVID virus that hit not just the continent of America, but the globe. And so many of our communities, families and businesses faced challenges that we weren't prepared for. And many times when policies are created, they really don't take into consideration the needs and the challenges of particular small minority [owned] and in this case, Black-owned businesses. The data was that between the months of February and April of 2020, we lost 41 percent of Black owned businesses that represented roughly 442,000 businesses closed during that 60-day period. …

We have 3.2 million Black firms today. But of that number, 3.1 million have no employees. Roughly less than 120,000 Black firms have one employee. And so when you create [programs like the Paycheck Protection Program] designed to protect the employee versus the employer, many – more than likely the majority – of Black firms faced challenges that no other community had to face. So many of our firms were forced to close. That’s the bad news.

The good news is though, as a community of business owners across the country, we showed resiliency. For those firms that were closed, we surveyed them and 70 percent of them said that the reason that they closed was not because they were in the wrong business, not because they didn't have the acumen that many banks and institutions said. It was because of a lack of information. …Many of them for the first time were receiving information from the [Small Business Administration], from agencies that they did not have relationships with, and were being told to do things that they weren't prepared to do. Not that they weren't capable of [doing], but just weren’t prepared. …

[W]hen our businesses have the funding that they need, and the information that they need, we do well. And so with that, we’re going into 2023, with good funding options and good information and good resources to be able to get that to the businesses and our communities across the country.

Some proponents for changes to independent contractors were painting a picture saying, ‘No one, and especially not Black Americans, want to be independent contractors. We don't need independent contractors, we need to move everyone into a traditional employment model.’ In your view, is that a little too simplistic?

Many of our small businesses say, ‘You know what, we want to hire family members.’ And so we have 1099, we have family members, we have cash-and-carry businesses. And so many of the traditional models of employment have not worked for our businesses. We want more entrepreneurs. We're telling our young people, ‘Go

create an opportunity.’ And so many of them are looking at multiple streams of revenue, many of them are being sole entrepreneurs, to start to gain the knowledge of being a business owner so that at one point in time in the near future, they can employ people.

Fact is, the worst number in American history right now for Black people is that there's 2 million unemployed folk walking America today that are Black. That's the bad news. But I always have good news: there’s 3 million Black-owned businesses. Simple story [is if] each one of those businesses could hire one more person from their own community. We don't have an unemployment conversation in the Black community going on in this country. The federal government needs to understand investing in Black-owned businesses, small and large, is a good thing for the overall economy.

What does it take to have a great America and what role did the Black Chambers play in that?

Over the last eight years now, we've just heard this term, “making America great again.” And a lot of folks took offense to that. And I was one that said: You know what? Black people want America to be great as well. But in order for there to be a great America, there must be a great Black one. And in order for there to be a great Black America, you need great Black businesses. And in order for there to be great Black businesses, I’d like to say you need great Black Chambers. And in order for there to be great Chambers across the country, we need partnerships. We need support from both the private sector as well as the public sector. And when that happens, we all win. America is a great country for all of its citizens, not just one group. And especially this month, you can look back on any day of the month and know that Black entrepreneurs, Black inventors, Black investors, have been critical in the success of this country.

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