A U.S. senator who’s known as a consensus builder and adept in dealing with various racial groups, convened a forum designed to assist beleaguered African-American businesses nationwide.
U.S. Sen. Mary Landrieu (D-LA) sponsored a roundtable, “Closing the Wealth Gap through the African American Entrepreneurial Ecosystem” at the Russell Senate Office Building on Sept. 19. Landrieu, 56, is the chair of the Senate Small Business and Entrepreneurship Committee, and noted the substantial wealth gap between blacks and whites.
“The U.S. Census shows that in 2005, the average wealth of a white household was $134,000 compared to $12,000 for blacks,” she said. “In 2010, because of the recession white household wealth fell to $110,000 and so did blacks, to $4,995. The wealth gap got worse and we have to find a way to change that.”
It’s a well-documented fact that’s been confirmed by economists that the keys to wealth in the U.S. for blacks – and most Americans – hinge on homeownership and entrepreneurship.
Landrieu said that Roland Burris, a black Democrat who served in the Senate and represented Illinois until 2011, challenged her as chair of the committee to find ways to help black business owners several years ago.
In response to Burris’s dare, Landrieu established a round table – or a conversation – with black business leaders to shine light on the problem.
“That was three years ago and this is our third round table,” she said. “We want to see what works for black businesses and what the hurdles they face are.”
Black businesses are suffering, said Julius Ware III, a Ward 7 business owner and president of the Ward 7 Business and Professional Association. Ware, 53, said that black businesses have historically faced problems of funding their firms but noted that there are programs that cities and states have in place to help small businesses.
Ware said that black businesses need to know about these programs.
“These firms need to be certified to do business and work with programs [like] Operation Hope [in Southeast] to get more information on how to get capital and deal with other business related concerns.”
Phinis Jones, a well-known black businessman in Southeast, said that the Small Business Administration hasn’t generally been responsive to the needs of black businesses. He pointed out that politicians like Landrieu need to talk to business owners.
“I am sick of experts on black businesses who really don’t know what they are talking about,” said Jones, 64.
D.C. Del. Eleanor Holmes Norton (D) who also attended the event said the roundtable that Landrieu sponsored is “an important, difficult discussion.”
“There was a lot of money used to repair federal buildings and every month there were published figures on how much business went to African American and small businesses,” said Norton, 75. “We have to grab what is out there and African-American businesses cannot be left behind.”
Norton also noted that the majority of black wealth is concentrated in home equity. However, the mortgage crisis has decimated that theory, she said.
The discussion centered on black businesses’ lack of access to capital. B. Doyle Mitchell Jr., president and CEO of Industrial Bank of Washington and president of the National Bankers Association, the trade association for black bankers, can attest to the myriad problems.
“Community banks hold 10 percent of all capital in banks but lend 40 percent of all small business loans,” said Mitchell, 50.
Landrieu talked about the “ecosystem” as a way to benefit black businesses, because blacks businesses are a part of the nation’s commercial and economic system and if they can be bolstered, the American economic system will benefit.
“People are interdependent now economically,” she said. “In order to strengthen black businesses, they need access to capital, counseling, strategic partnerships and access to global markets.”
There are exceptions.
Atlanta Mayor Kasim Reed said that the primary reason black businesses do so well in his city is the culture that exist there.
“Forbes magazine has Atlanta ranked No. 1for minority businesses,” said Reed, 43. “It is part of the culture in our city to support black business and that started about 40 years ago with the administration of Maynard Jackson, who insisted that black businesses get 25 percent of government contracts in the city.”
National Urban League President Marc Morial said that black businesses in cities like Atlanta are experiencing success for two reasons.
“One, there is a public policy component in place that supports African-American businesses and they are serious about it,” said Morial, 54. “Two, the large companies in Atlanta have supplier diversity programs that make it a point to include black businesses.”
Morial, a former mayor of New Orleans, said he finds that large black businesses that succeed tend to link business-to-business or business-to-government contracts not business-to-consumer.”
While the various techniques and strategies discussed sounded interesting to Mitchell, it really boils down to one thing for him.
“We as blacks have to learn how to support black businesses,” he said.