The Problem
Due to the past 400 years of slavery, racial terrorism and discrimination, there is a huge wealth gap between blacks and whites.
In 2016, according to the Inequality Project at the Institute for Policy Studies, the U.S. median wealth — or the total of all assets — for white families was just under $150,000, compared to the national median wealth of $82,000. In 2016, the median figure for African-Americans stood at roughly $3,500.
In D.C., white households have a net worth that is 81 times more than a black household.
A new report shows that black wealth may fall to zero by the year 2053.
So now that we know the problem. Here is the solution.
Solution
The evidence shows that black entrepreneurship is what can close the racial wealth gap.
An organization called, the Association for Enterprise Opportunity, released a new report: “The Tapestry of Black Business Ownership in America: Untapped Opportunities for Success.” It was funded by the W.K. Kellogg Foundation. The data showed that “business ownership is the greatest equalizer in wealth disparity. “
The solution should be easy.
- Systematically help black people in DC start their own business.
2. Systematically fund black people to start their own businesses.
Given the fact that the study above shows that a black entrepreneur is more likely to have more wealth than a black worker, entrepreneurship should be encouraged in our community. One of the most effective way to help increase black entrepreneurship in DC on a large scale is through DC Public Schools.
Most of the black children in DC go to public schools. Unfortunately there are many barriers for students from low income neighborhoods preventing them from being able to make it to college and afford college. For some, the obstacles are so hard that getting a high school diploma is a challenge. Without a college degree, let alone a HS diploma, the chances of rising out of poverty is slim.
Decades ago, schools provided vocational training, in which a student could learn a trade, graduate high school and then get a decent paying job doing the trade they learned.
Those programs have been removed from schools, thus making it harder for those from low income backgrounds who already can not afford college to get ahead.
I have recently connected with a program in DC that provides free entrepreneurship classes in which students can get entrepreneurship certificates and are training to start their own business.
Through this partnership, my plan is to
1. Add these same entrepreneurship classes to the curriculum of DCPS. These classes will teach students how to start their own business beginning from freshman year to senior year. By senior year they will have an entrepreneurship certificate and will know how to start a business. It is important that black students in DC know how start their own business because DC has one of the highest black unemployment rates in America.
2. Racial equity: Make a fund similar to DC TAG that provides black entrepreneurs with capital for their businesses. Black entrepreneurs face many barriers starting their own business. One of the other barriers is access to money to start a business. The average cost to start up a small business is 3,000 dollars. The program DC TAG provides college students from dc with up to 10,000 dollars in tuition, every year.
According to the U.S. Small Business Administration, the average cost to start a micro-businesses is 3,000 dollars. For those that would like to start their own business after high school, they could get 10,000 dollars to start their own business.
Starting a business does not only help the entrepreneur, it helps their whole community. Black entrepreneurs can help end high rates of unemployment by providing jobs for their own community. DC has the highest black unemployment rate in America.
Another scary stat is that blacks are systematically being denied jobs due to racial discrimination.
A study done by Northwestern University, Harvard University, and the Institute of Research in Norway confirmed this. The study contained 42,708 applicants with equal qualifications, credentials, and resumes. The results were that despite equal qualifications, white people were 36% more likely than blacks to receive call backs from jobs.
If black people start their own businesses we won’t have to worry about being denied jobs. They can also help provide jobs for their own community.
I used to work for a non profit whose mission was to uplift people out of poverty. The non profit provided furniture, clothes, household items, and other services to families in poverty in D.C. It was no secret about the job discrimination that occurred there. Even white staff members got together and compiled a report which included complaints about the racism.
If black people from low-income neighborhoods are being denied jobs, by a job whose mission was to uplift people out of those same low income neighborhoods, then what hope do they have? If black people who go to college and get degrees are being systematically denied jobs, then what hope do many of the disenfranchised black people in low income neighborhoods have?
I believe implementing my plan can create a cycle of black entrepreneurs and black businesses that can help close the wealth gap and uplift students out of poverty.
Funding black entrepreneurship and black businesses does not only help black Americans, it helps the American economy.
The Association for Enterprise Opportunity, found that if Black-owned firms were able to employ the same number of people that all privately-held firms employ on average (11 versus the current 9) almost 600,000 new jobs and $55 billion would be added to the U.S. economy.
Another important benefit of black entrepreneurship, is that it reduces youth violence.
In a new study(the link below) published in Urban Affairs Review, by Karen F Parker, a sociologist from Delaware University, reports that a growth of African American-owned businesses was strongly linked to a reduction in black youth violence between 1990 to 2000.
Parker has two explanations for this.
- Black entrepreneurs are role models in the community.
2. Black entrepreneurs help reduce unemployment (a precursor to crime) and improve the neighborhood.
Black Americans are systematically denied housing, bank loans, employment, funding for equal education, which systematically keeps black people in poverty. Again, the solution is simple. The facts say that black entrepreneurship will close the racial wealth gap and that black entrepreneurs have more wealth than the average black worker. Therefore, a program that helps increase entrepreneurship in the black community in DC will help uplift black families out of poverty and will help close the racial wealth gap.
- Add entrepreneurship classes to the DCPS curriculum, in which they can get certified and learn how to start their own business before graduating.
- Fund black DCPS students who go through this entrepreneurship program with 10,000 dollars in start up money. If DC Tag can provide 10,000 dollars every year in tuition assistance, they can do the same with start up money.
As stated earlier, owning a business is the biggest way to close the racial wealth gap.
Thanks For Reading!
Vote Addison Sarter For DC Council At-Large November 3, 2020, to implement this plan to close the racial wealth gap in DC.