Supporting Black-owned businesses is an extremely effective strategy for promoting equality in the United States, according to a recent survey conducted by the Pew Research Center. However, despite the growth in the number of Black-owned businesses in recent years, the representation of Black business owners remains disproportionately low.
Statistics show that Black business owners make up only 2.4% of all employer-firm owners, while Black Americans comprise approximately 12.4% of the country's population. This disparity stands in stark contrast to the situation for white Americans, who account for a majority (86%) of employee-firm owners while representing about 59% of the total population.
As of 2022, there were an estimated 161,031 Black or African American-owned businesses in operation, generating $183.3 billion in annual receipts. This number marks an increase from 2020, where approximately 140,918 Black-owned businesses were recorded. These businesses employ 1.4 million people, contributing to a total annual payroll of about $53.6 billion.
Though the majority of Black-owned businesses have small payrolls, with around 66% employing fewer than 10 people, there are several notable exceptions. Some Black-owned companies generate billion-dollar revenues annually and employ thousands of workers.
One of the most prominent examples is World Wide Technology, founded by David Steward, which tops the list of largest Black-owned businesses in the U.S. This technology service provider employs approximately 10,000 people globally and generated $17 billion in revenue last year. Forbes consistently ranks World Wide Technology as the largest Black-owned business in the country and it currently holds the 23rd spot on the publication's list of largest private American companies.
Research from the Brookings Institution reveals that Black businesses are more likely to hire Black workers. Paradoxically, Black adults are also more likely to experience unemployment. The report suggests that a shortage of Black-owned businesses limits employment opportunities and hinders the development of Black communities. Not only does the underrepresentation of Black businesses exacerbate racial inequality, but it also carries substantial economic costs for the U.S., resulting in the loss of millions of jobs and billions of dollars in unrealized revenues.
In conclusion, supporting Black-owned businesses is not only a powerful strategy for promoting equity but also a crucial step towards strengthening communities and bolstering the economy. By intentionally patronizing Black-owned businesses, individuals can contribute to the creation of more employment opportunities and foster greater economic prosperity within marginalized communities.
