The unemployment rate now stands at 8.3%. However, black unemployment is 14.1% and Latino unemployment is 10.7%.
In comparison, white unemployment is 7.3%. Together, blacks and Hispanics comprise about 40% of the nation’s officially unemployed workers – – they comprise 25% of the labor only force.
Therefore, supporting the start-up and growth of businesses owned by blacks and Latino may provide a partial resolution to the racial unemployment problem.
Between 1992 and 2010, the economy gained 17 million jobs, 65% of all new jobs were created by small businesses (33% by businesses with fewer than 50 employees and 32% by businesses with 50 to 500 employees).
During the same period, large businesses accounted for two-thirds of the 3.4 million jobs that were lost. Clearly, to create a fully employed workforce, the small business sector must become more successfully engaged.
There are currently 5.8 million minority-owned businesses and their number increased by 600% over the last 15 years. Today they comprise 21% of all small businesses, create 7.6 million jobs and employ 5% of the workforce. The employment capacity in minority-owned businesses has grown so much over recent years that they now have the ability to employ 18% of the minority workforce (assuming all their employees were minority).
In contrast to the rapid growth of minority-owned businesses, the number of non-minority-owned businesses increased just only 47% over last decade and a half.
The Gazelle Index national survey of Black-owned businesses found blacks comprised 67 percent of workers in black-owned firms. Therefore, it seems that if black-owned businesses are encouraged to continue to grow very rapidly, they could relieve some of the burden of black unemployment which is currently at 14.1%.
Therefore, one way the government can accelerate the reduction in unemployment among blacks and Latinos is by promoting business development among the groups. This is a clear instance where good social policy is also good economic policy.