In February, we celebrate Black History Month and honor Black activists who led the Civil Rights Movement — powerful Black men and women who have made significant contributions in the fields of science, politics, law, sports, the arts and more. Paying tribute to the generations of Black Americans who struggled with adversity to achieve full citizenship in American society is a central theme of the annual recognition.
While it is encouraging to see broad participation in this recognition, we need to expect more from Black History Month than just education and celebration. Given the violent events of racial injustice in 2020, it is no longer enough to use the month of February for awareness only. We must also take action.
According to Dr. Martin Luther King Jr., it is our duty to adopt a strategy of nonviolent direct action to bring about social change. This action can take many forms. One powerful action is supporting Detroit-based Black-owned businesses. These businesses provide neighborhood jobs, much needed goods and services, and stability to local communities. Only two percent of Black American spending is actually spent in Black neighborhoods; we have a responsibility to circulate our dollars in our communities more than once.
Because Black-owned businesses have been disproportionally hurt by the continued economic impact of COVID-19, we have an obligation to take an active role in their success. Supporting these businesses with our spending dollars is only the first step. To be truly committed to the success of our small business communities we must coalesce around practices that eliminate inequities that hamper Black entrepreneurial success.
Access to capital is a significant impediment to success for Black business owners. According to an October 2020 McKinsey report, Black entrepreneurs struggle more to secure capital and gain access to credit than their white counterparts. Even with strong personal credit, Black business owners are about half as likely to receive full financing and three times as likely to have that shortfall hurt their bottom line.
The State of Michigan, City of Detroit and various economic development and philanthropic organizations – including Detroit Economic Growth Corporation (DEGC) – are addressing the issue of racial injustice on a number of fronts.
By the end of this month, DEGC will have administered roughly $15 million to more than 2,000 Detroit small business owners since the start of COVID-19 – the majority of which represent diverse populations. Other resources, such as access to the Paycheck Protection Program (PPP), personal protective equipment and re-opening assistance is available through Detroit Means Business (DMB). Over the course of the past year at the national level, we’ve seen multiple corporations set up multi-million-dollar funds and grants to support Black-owned small businesses. DEGC and DMB are working to communicate these opportunities to eligible business owners.
COVID-19 shined a light on a long-standing inequality within our small business community. Our challenge is to utilize the current economic crisis, as well as Black History Month, to eliminate the racial bias Black entrepreneurs face when establishing a small business.
We can all agree that tremendous progress has been made in racial equity in the U.S. in the areas of earnings, employment, education and politics. Unfortunately, the gaps in racial wealth, healthcare, wages, corporate leadership and access to capital remain.
There are no easy solutions to institutional poverty, disproportionate unemployment or overall financial inequality faced by Black Americans. We can, however, take the energy of this moment to create an equitable, thriving environment for Black entrepreneurs. Through this action we can drive job creation, build vibrant neighborhoods and create opportunities for Black Detroiters to create generational wealth. It is our time to make history by creating economic justice for all Black Americans.