The message coming out of Washington is as clear as it could be. If minorities wish to build successful businesses and stable communities, they must create strategies focused more on self-reliance. The federal government can no longer be counted on as a stable and reliable partner in this process.
The latest Census Bureau’s surveys and private surveys conducted by EuQuant (pronounced U – Quant) show the growth in number, employment, and revenue of minority-owned businesses continue to significantly outpace that of white-owned businesses – which incidentally have experienced negative absolute growth over the last five years.
However, the growth is little consolation especially for Black and Latino businesses because they started from a huge deficit following centuries of racial deprivation and discrimination. Until recently, they benefited enormously from remedial affirmative action policies put in place in the public and private sectors following victories of the civil rights movement. But legal opposition to those policies reached a crescendo by the beginning of the 2000’s and shortly after that; the economy entered the Great Recession.
It has taken a full decade for minorities to partially recover from the devastating recession because the benefits they derive are always at the tail end of the recovery. Now, the moment that minorities find themselves in a position to benefit from the broader economic growth, a new reality has appeared under the Trump Administration. If the budget priorities championed by Trump become policy, key aspects of minority life in America will be devastated. One can expect declining federal support for minority business development, reductions in student assistance, less social and economic support for seniors, cutbacks in food and housing subsidies for the poor, and elimination of health care for 23 million Americans. It is “déjà vu all over again.” For minority business owners it is two steps forward, one step backward.
Ten years ago, the Great Recession began in full force. That process destroyed more wealth in the Black community than any other single event in history except the collapse of the Freedman’s Bank during Reconstruction. That often overlooked event cost freed slaves about $57 million in hard-earned pennies they had saved right after slavery. Fraudulent behavior among the white directors of the Freedman’s Bank in conclusion with greedy US Congressman led to its bankruptcy. In today’s dollars, the value of that loss is about $100 billion.
At a depth of the recession, 40% of all displaced workers were either Black or Latino. Both groups suffered disproportionately from mortgage foreclosures because so much of their wealth was tied up in home equities. Now that the economy is recovering, displaced minority workers are being reemployed at wage rates much lower than those of the jobs lost. Additionally, corporations have accelerated their focus on increasing profitability by using contract workers, temporary help or part-time employees.
As a result, the US is undergoing the widest ever gap in wealth and income inequality. Even the so-called Trump bounce is concentrated mainly in the stock market and driven by expectations that the administration will cut corporate taxes, eliminate key regulations put in place by the Dodd-Frank amendment, disregard key consumer protections and drastically reduce mandatory corporate expenditures on healthcare.
Perhaps the biggest lesson to be learned from all of these distressing developments is the observation made recently by German Chancellor Angela Merkel – Europe can no longer depend on the US government as a stable and reliable global partner. Instead, Europe must rely on itself! The same is true for minority business owners. No longer can we depend on the US Administration to champion minority business development. Instead, we must create more self-reliant strategies.