The impact and importance of Black businesses
By Eric H. Kearney, president and CEO of the Cincinnati and Northern Kentucky African American Chamber of Commerce
I humbly call upon President-Elect Biden and Vice President-Elect Harris for an optimism towards entrepreneurship and support for small business consistent with our national narrative of the American Dream. A powerful way for Americans to fulfill their individual potential and to address many of our countries issues is through policies focusing on small business, particularly minority-owned businesses.
This year has been a year of pandemic challenges as well as emphatic demands for racial equity and justice. The impact of COVID-19 and measures to stop its spread have had a disproportionate negative impact on the Black community. The National Bureau of Economic Research reports that, “the number of African-American business owners plummeted from 1.1 million in February 2020 to 640,000 in April.” That means more than 40 percent of U.S. Black-owned businesses have closed their doors in the last nine months.
As we flip our calendars to January, your Cincinnati and Northern Kentucky African American Chamber of Commerce is seeing glimpses of hope in the promise of a COVID-19 vaccine and signs of change as America transitions to a new President. The Biden/Harris administration assured voters of a Build Back Better program to regrow businesses and bolster the nation’s economy. The Build Back Better plan offers many commitments including one to pursue “adedicated agenda to close the racial wealth gap, to expand affordable housing, (and) to invest in Black, Latino, and Native American entrepreneurs and communities.”
The median wealth for white families is more than ten times that of Black families. However, the Survey of Business Owners finds that the median net worth for Black business owners is 12 times higher than Black non-business owners. The wealth gap decreases substantially when we compare the median wealth of white and Black business owners.
Entrepreneurs and small businesses build wealth – and supporting Black-owned businesses has the potential to create more opportunity for savings, credit-growth, home ownership and generational wealth. According to a recent McKinsey study, closing the racial wealth gap would add $1 trillion to $1.5 trillion to the U.S. economy over the next eight years. That’s good for everyone.
The Cincinnati and Northern Kentucky African American Chamber of Commerce is the first African American Chamber in the nation to measure the economic impact of Black-owned businesses. This past summer, we partnered with researchers at the University of Cincinnati Economics Center and began collecting data on sales, employment, wages and more from more than 900 regional Black-owned businesses, representing a strong diversity of industries. We want Cincinnati to be America’s first market to have access to this kind of accurate and comprehensive data – and we’re eager to share it with you, soon. This data will help us measure growth, identify opportunities and hold our leaders accountable.
The African American Chamber’s plan “Partner, Support, Focus, and Lead!” has some 35 ideas to support Black businesses, but it’s applicable to all small businesses. It provides a path for transformation and growth that will work in Cincinnati as well as other American cities.
The African American Chamber is hopeful that the President-elect and Vice President-elect keep their promise to enlist, engage and energize Black businesses as part of their plan to Build Back Better. Policies that are good for small business are good for America.
An emphasis on Black business will help lift up communities, promote productivity and grow economic vitality for all.
Eric H. Kearney, a Cincinnati attorney, is President & CEO of the Greater Cincinnati and Northern Kentucky African American Chamber of Commerce. He served in the Ohio Senate and was Ohio Senate Minority Leader.