Black economic empowerment is seemingly being discussed more and more amongst Black scholars, social activists, entrepreneurs and public figures throughout the conscious community. Despite the different theories these Black men and women of influence may have on the Black community reaching a level of economic self-sustainability, they can all pretty much agree on one thing for sure: that Black businesses are imperative for economic advancement in Black America.
Historically, Black-owned businesses, firms and establishments have played an immense role in the economic state of Black America. In other words, the success and growth of Black establishments from the Reconstruction Era, to Jim Crow, to Civil Rights – and so forth – were in many cases a reflection of the economic strength of the Black community.
To date, Black Americans spend an astounding 95 percent of their income at white-owned businesses, according to a 2013 article by media website Atlanta Blackstar entitled “5 Ways Integration Underdeveloped Black America.”
The Atlanta Black Star article also highlighted that Black-owned businesses comprise only 7 percent of all U.S. firms (which is a tremendous decline from the Harlem Renaissance and Pre-Civil Rights eras), but Black Americans possess only a meager 1 percent of the country’s wealth with an estimated buying power of $1.2 trillion.
James Clingman, an esteemed author, journalist, scholar and expert on economics, wrote in an August 2016 article he wrote on Black business, “Of the 2.6 million Black owned firms, 95.5 % of them are sole proprietorships and have no employees. That’s not necessarily a negative reflection on those businesses; much of it has to do with lack of relative support from Black consumers as well as all other consumers.”
“Black To Business,” an online platform that provides unique content and resources to educate, motivate, and connect black business owners as well as the black community, published a rather compelling piece about the significance of Black business.
The article, labeled as a staff report, is entitled “4 reasons why you NEED to get Black to Business,” which outlines four major reasons why Black Americans should support and/or start black businesses, which are as follows: Black communities become stronger, better quality job options become available, it diversifies options for Black people to help one another, and most importantly, it grows the ‘Black’ economy.
“Evidence has shown that blacks are spending money making others rich instead of those in our own communities,” said the Black to Business article.
“Economic growth occurs when people take resources and arrange them in ways that make them more valuable. Economic growth cannot be achieved with everyone doing the same thing and creating the same types of businesses… Strengthening for black communities strengthens the economy, in turn allowing the US economy to remain globally competitive.”
As noted in an earlier Northend Agents article, the lifespan of the ‘Black dollar’ is about six hours in contrast to an estimated 28 days in the Asian community and 17 days in the White community.
Clingman, in accord with many other Black economists like Boyce Watkins, identified the prevalent issues with Black businesses, and urged readers to start their own establishments.
“The reason most often given for the failure of Black owned businesses is lack of access to capital. While that is certainly true, there are several other reasons, including the absence of social networks, (mentors and primary investors) lack of management expertise, lack of the commitment necessary to be a successful entrepreneur, lack of support by consumers, business owners’ reluctance to put earnings back into the business, and the instant gratification syndrome that causes some business owners to go on a shopping spree the first time they get that first big check,” Clingman wrote.
“More important than failure, however, is the fact that Black people have already done exactly what many of us are trying to do today. Our ancestors, grandparents, and parents started and operated highly successful businesses against inconceivable odds. The blueprints of their success were left for us to follow. We need to learn from our past and build upon what our forebears did, by emulating their tenacity, their willingness to sacrifice, their resolve to assist one another, work together, support one another, and their commitment to the entrepreneurial spirit that has burned within African people for thousands of years.”
Well-known scholar W.E.B. DuBois stressed the need for the construction of and investment in black businesses, with his famed quote, “To whom you give your money, you give your power.”
Demetrius Dillard is a recent graduate of Winston-Salem State University and a North Carolina-based freelance writer.