Black entrepreneurship’s role in closing the racial wealth gap
Black entrepreneurship’s role in closing the racial wealth gap
This Juneteenth, we’re taking a look at the racial wealth gap in the United States — and initiatives to bridge that gap. Census Bureau data from earlier this year found that in 2021, white households were 10 times wealthier than Black households. Slavery and racial discrimination created the structural barriers that gave way to this racial wealth gap. Let’s look now at efforts to close the gap.
Kezia Williams is CEO of the Black upStart, a national initiative and curriculum for Black entrepreneurs. She spoke with “Marketplace Morning Report” host Nancy Marshall-Genzer, and the following is an edited transcript of their conversation.
Nancy Marshall-Genzer: Part of the of the racial wealth gap is a gap in business ownership. There was a Brookings report that found that between 2019 and 2022, the racial gap narrowed when you look at wealth generated by home ownership. But if you look at business ownership, there’s still a big gap. Is that what you’ve seen?
Kezia Williams: Absolutely. One of the statistics that we teach with the Black upStart is that currently there are 3.12 million Black entrepreneurs, but only [around 140,000] of them have the capacity to employ at least one person. And those 134,000 Black-owned businesses employ just 1.3 million people. And so when we look at those numbers, African Americans are one of the only groups that don’t produce the same amount of jobs that is proportional to the percentage of our population, which is around 13%. So there is a deficit there. But there have also been studies that have been incredibly encouraging, such as Black women are the fastest-growing segment of entrepreneurs.
Marshall-Genzer: Why are Black women right now more likely to start a business?
Williams: Black women are receiving more education. And so we’re going into those white-collar jobs — which, by the way, are not easy to get. I’ve never been called back for an interview with my full name on a resume. So, my full name, Kezia Williams — I’ve always had to put “K” just to get a call. I’ve never gotten through the final round of an interview with my natural hair out. My hair has always had to be straight in order to get across that finish line.
Corporate America isn’t always a friendly place. In fact, my experiences are not unique. And a lot of the entrepreneurs that we’ve trained — 4,000 within the past year — have talked about what it means to code switch just for cash flow. So when I think about Black women working in corporate environments — Black women especially working in these white-collar jobs, where sometimes they’re the only Black faces — they’re looking for opportunities outside of their 9 to 5 in order to generate income, so that they can resource their lives on streams of income that they can control. And entrepreneurship is just one of those avenues.
Marshall-Genzer: What types of tools do you give them to start a business or grow the business they have already?
Williams: We teach you the obstacles that exist when you’re starting a business as a Black owner. And some of that involves trying to get access to funding. We know that, especially when you’re pursuing VC, only 2% of minority founders get access to VC. Only 1% of Black women have gotten access to venture capital funds. So we teach how to establish relationships with community development financial institutions, which through public charter are mandated to help women and minority-owned businesses.
Marshall-Genzer: And there’s a knock-on effect here, isn’t there? When Black-owned businesses are successful, they are more likely to hire Black workers than other businesses, right?
Williams: Black entrepreneurs, when they become Black employers, they are more likely to hire Black. But they’re also more likely to serve Black interests. We know that Black people spend — well, by 2030, they would have spent $1.5 trillion annually. Right now, it’s $1.3 trillion annually. So we’re more likely to create the products and services that really meet the needs of our community. We’re also more likely to give back to causes that benefit African Americans. So there’s so many different ways in which the Black dollar circulates, even outside of employment, when we start businesses.
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