President Trump promised economic relief for Black businesses and workers, but so far, analysts say his second-term policies have put them under greater strain.
The big picture: The combination of federal layoffs, tariff-related cost pressures and a weakening labor market have hurt many Black-owned small businesses. The Black unemployment rate has climbed to its highest level since 2021 during Trump's second term.
- "Whether it is beauty stores that rely on international supply chains or transportation firms that source globally for parts and equipment, these Black-owned businesses are facing higher costs that require them to make decisions about either raising prices, cutting staff, or a combination of both," the Center on Budget and Policy Priorities says in its Feb. 3 report.
- Trump's economic policies could intensify those pressures, compounding long-standing disparities in access to capital, wealth and economic security, the research institute says.
Case in point: Trump last year gutted the Minority Business Development Agency, the sole federal agency tasked with growing minority businesses, and rescinded a President Johnson-era order requiring federal contractors to take steps to prevent racial discrimination.
- Those actions threaten to reshape how race and equality are treated in government contracting — which, with federal employment, has played an outsized role in establishing the Black middle class.
The other side: "President Trump promised to bring prosperity back to Main Street with an America First agenda that benefits every small business," White House spokeswoman Taylor Rogers said in a statement to Axios.
- "In addition to slashing regulations and lowering energy costs," the administration's budget law allows a 20% small business tax deduction and full expensing of equipment investments.
- Rogers' statement didn't directly address the impacts of tariffs, anti-DEI measures, or the president's rollback of the federal contracting diversity order.
Zoom in: Nicole Turner, founder of the consulting company The Culture Pro and former director of the federal government's employee engagement office, started her business full-time in 2019 to help organizations use culture as a strategic advantage.
- She says her Black-owned and woman-owned small business used to receive "set-asides that help — not give us an advantage — but just give us an even playing field to go after contracts." Turner says those set-asides were the first to go.
- Turner, who also works as an independent consultant, estimates she's lost between $15,000 to $20,000 a month due to reduced federal contracts and fewer proposal requests.
- That loss has a "trickle-down effect," for her and other small-business owners, Turner says.
Context: The Black unemployment rate was 7.2% in January, up 1 percentage point from last year, according to the latest federal data. The overall rate was 4.3%, up from 4.0%.
- And cuts to the federal workforce — largely via buyouts and layoffs — have disproportionately hit Black workers.
What they're saying: Kate Gallagher Robbins, senior fellow with the National Partnership for Women and Families, tells Axios Black women, workers and business owners, are "really suffering and harmed in this economy right now."
- She attributed that to, in part, "cuts to the federal workforce and the rollback of civil rights protections broadly."
- The Center on Budget and Policy Priorities says in its report, also citing the Black Economic Alliance Foundation, even when the economy is strong, Black unemployment is typically higher "due to structural racism and ongoing discrimination in education and employment."
- "When the economy weakens, Black households are usually the first to feel the effects, with Black workers tending to be the first fired and last hired during the business cycle."
The bottom line: Turner says, "Even businesses with no federal contracts feel the impact if their customers work for or rely on the federal government."
- "It's not just about one business, it's about an entire segment of the economy that can't survive if things keep going the way that they're going."
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