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Brookings: To expand the economy, invest in Black businesses

Brookings, December 31, 2020, To expand the economy, invest in Black businesses

For the descendants of enslaved Africans in the United States, entrepreneurship represents more than just owning a business and pursuing the proverbial American Dream. Instead, the ability for Black people to participate in local, regional, and global markets represents a dream deferred by systemic racism and discrimination. Consequently, an analysis of Black business ownership can offer insight into the degree to which America is truly the land of opportunity.

Inspired by the work of the Path to 15|55 initiative, this research explores the state of Black-owned employer businesses (hereafter referred to as Black businesses). Using the Census Bureau’s 2017 Annual Business Survey (ABS), which replaced the Survey of Business Owners (SBO), we analyzed data at the national and metropolitan levels to compare Black and non-Black businesses.

The purpose of this research is to provide the empirical context that will make way toward a set of business development goals. Future goals will provide a shared vision among key players that can drive capital to Black entrepreneurs to start, maintain, and grow their businesses. This includes capital from corporations and philanthropies, support from political leaders, investment and products from financial institutions, and venture and startup capital investment from high-net-worth individuals. The potential economic and social returns that strategic investments in Black businesses can have for individual business owners, local communities, and the overall economy warrant an analysis.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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