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Black Entrepreneurship Booms During Pandemic

LULU GARCIA-NAVARRO, HOST:

This pandemic has warped the economy, but mass layoffs at the beginning led to a boom in entrepreneurship. In Black communities across the country, startups are sprouting. Sinceray Douglas (ph), for example, started a cleaning and organizing business in Minneapolis.

SINCERAY DOUGLAS: I had been working for a bank for over five years. And due to COVID, my hours had been cut. And I am a single mother, and it's hard. I have four children total, you know? So I will say, hey, since I have a joy in cleaning, why not start a cleaning business to help out others as well as help out myself? And I just feel so much pride in it, and I feel amazing.

CARMEN AFOR: My name is Carmen Tufor (ph), and I currently live in Lorton, Va. I moved to the state about 10 years ago from Ghana with my mom and my two brothers, and then my dad was with me, but he passed away of COVID. My dad passing away was a wake-up call that I have to do something. So I created the telemedicine app that connect patients and doctor together. My dad would be proud of me for launching this business.

JAQUIN MADDOX: I just want to try to put as much happiness into this cold, dark world that I can. My name is Jaquin Maddox (ph), and I am in Denver, Colo. I am an event planner for weddings, social and corporate events. I was planning for the future, trying to build generational wealth for my daughter and my three grandsons. And as a Black woman, I feel like I'm a part of history, a movement that has not happened in the history of this country.

GARCIA-NAVARRO: Joining us now from New Orleans is Andre Perry. He's a senior fellow at the Brookings Institution. Welcome to the program.

ANDRE PERRY: Hey, thanks for having me.

GARCIA-NAVARRO: What is driving this surge in entrepreneurship in Black communities across the country?

PERRY: Well, on its face, Black people are driving entrepreneurialism. The lack of businesses in the Black community really reflects a lack of investment. And so we see a lot of stimulus funds going into communities not necessarily tied to uplifting entrepreneurialism, but Black people are taking advantage of this opportunity. So it is somewhat taking lemons and making lemonade. But there's always been an entrepreneurial spirit in the Black community.

GARCIA-NAVARRO: I think what I also hear you saying is that people turned entrepreneurial out of necessity because the job market during this pandemic really hurt the Black community more. I mean, they lost jobs, and they had to find something else to do.

PERRY: Yes. Remember when people started to talk about how we're recovering so well, and they used an unemployment rate in the aggregate, and they said, hey, look; we're at 8%, and things are improving. But when you looked at the Black unemployment rate, it was going in the wrong direction. And let's be clear; Black people are also dying at two to three times the rate as their white counterparts. And so we need services. We need things in the hood that will help alleviate the pain and suffering in our communities. And so we're starting businesses in health care. We're starting transportation services. We're meeting the needs when the overall labor market has denied us.

GARCIA-NAVARRO: Are those the kinds of businesses that people are opening, businesses that actually sort of are catering to vacuums created by the pandemic?

PERRY: The No. 1 business sector for Black Americans in terms of starting firms is in health care. Home health firms, nursing assistance and other health professionals, contact tracers to folks working on vaccine distribution - most of the entrepreneurial activity was in health care.

GARCIA-NAVARRO: The National Bureau of Economic Research found that a lot of this is happening in middle-income Black neighborhoods. Why is that significant?

PERRY: Remember; most people start companies using the equity in their homes. That's also the reason why homeownership is so important. It's also the reason why the value of our homes must be at market rates. And so because there's more wealth in middle-income neighborhoods, they're converting that wealth into firms.

GARCIA-NAVARRO: I mean, the desire to build generational wealth was a big motivator for the entrepreneurs we spoke with. And in reality, I would like to ask you, will these startups, though, lead to long-term wealth when we are looking at people catering to what eventually is something that's going to not be there, which is the pandemic?

PERRY: Well, the growth in entrepreneurialism shouldn't be a result of happenstance. We need to invest in Black businesses beyond this pandemic. A lot of the relief funds, a lot of the recovery funds are going to be one-time shots of cash in the systems. And so it's incumbent upon the federal government, corporations with all this talk of Black Lives Matter and the racial uprising, that they start to invest in Black businesses for the long term. And that means the economy expands, there's more revenue, there's more productivity. The entire country improves as a result.

GARCIA-NAVARRO: A century has passed since the Tulsa race massacre. And listening to you talk about Black entrepreneurship, I mean, we must remember that that destroyed so many lives and livelihoods. The area was called Black Wall Street that was razed, after all. Now that we see Black communities seizing new opportunities for capital and business, do you think this moment could be a turning point? And what should we learn from this?

PERRY: I think it is a turning point because one of the lessons of this pandemic is that when our neighbors are sick, we are then vulnerable. And that is true economically as well. We talk about memorialized Black Wall Street, the Greenwood district in Tulsa, because of the anniversary. But there was a Tulsa in cities all across the country. And let's be clear; in the beginning of the pandemic, when the CARES Act rolled out and the Payroll Protection Program rolled out, many Black businesses could not participate in it because it did not allow for sole proprietorships to participate, and 95% of Black businesses are sole proprietorships, compared to 78% of white firms. And so we got to remove those dregs of racism. We must be vigilant and make sure that there's not these deliberate attempts to throttle our growth.

GARCIA-NAVARRO: That's Andre Perry, a senior fellow at the Brookings Institution. Thank you very much.

PERRY: Thanks for having me.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

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