The racial wealth gap between Black and White Americans is getting wider, but there is something Black people can do to help close it; invest in Black businesses.
The Black Information Network reports data from the Black Congressional Black Caucus Foundation (CBCF) shows that while White Americans hold 13 times more wealth than Black Americans when it comes to the median wealth gap between Black and White business owners the gap between White Americans drops to just three times more wealth.
The number of Black Entrepreneurs has skyrocketed since the pandemic as Black men and women took their careers and finances into their own hands. However, many Black entrepreneurs and business owners still struggle with emergency cash on hand, credit and more.
Investing in Black businesses can help Black entrepreneurs with financial support and help them circumvent loans, grants and other forms of traditional financing that are out of reach for Black small business owners.
Investing in Black businesses can also help boost economic activity in the communities they’re located in. According to the CBCF Black-owned businesses in the U.S. have produced more than 1 million jobs and $165 billion in revenue.
Black businesses and racial equity were a particular focus during the 2020 Black Lives Matter movement which led to numerous large corporations that started grant programs, business accelerators and loans to small Black-owned businesses. Additionally, several prominent Black figures including tennis star Serena Williams and Rapper Black Thought have started Venture capital companies to invest in and support small Black-owned businesses.
Investing in small Black businesses also would help the entire U.S. economy. According to CitiGroup, discriminatory practices in banking, education and a range of other areas have cost the U.S. $16 trillion. In 2019 alone the U.S. gross domestic product totaled $19.5 trillion in 2019.
Despite the growth of Black businesses since the pandemic, they make up less than 3% of US Businesses showing just how paramount it is that Black business owners are supported by Black people.