By Jamal Simmons
As Black History Month draws to a close, it is important to look into the future to fix the problems in Black America today. And one of the biggest challenges facing our community is economic.
While the economy is growing, it can do better. The national unemployment rate is 4.8%, and for African Americans, it’s three percentage points higher. What’s more, black median household incomes still lag whites by nearly $30,000. These disparities are historical trends the United States has not been able to break, even in the best of times. Closing these gaps will not just involve better schools, but will require more entrepreneurship and asset ownership.
There are roughly 2.6 million African-American business owners in the country, but just 109,000 have a firm with at least one employee. The rest of these folks are sole proprietors or independent contractors. U.S. Census data shows that all minority-owned businesses collectively generated only $1.1 trillion in income in 2014, about 3% of the total business receipts in the country.
Many African Americans are making up this shortfall through participation in the Gig Economy, using digital platforms to connect to individual tasks for pay.
People have always been able to pick up side “gigs,” but the sophistication of digital and app-based platforms enabled by broadband internet is only making it easier to connect to short-term jobs. According to the Pew Research Center, “nearly one-in-ten Americans (8%) have earned money in the last year using digital platforms to take on a job or task,” and African Americans and Latinos are more likely than whites to do so.
Most of these opportunities exist on app-based platforms, such as Uber or Taskrabbit. The app economy didn’t even exist 10 years ago, and now Apple alone has seen over 140 billion apps downloaded. Without mobile broadband, it would be nearly impossible to see this kind of growth. Today, consumers are standing on corners searching for restaurants, driving down city streets finding riders and taking mobile payments using their cell phones.
Along with mobile data usage, Americans are increasingly taking advantage of home and office devices that require broadband connections. All of this mobile broadband activity is taxing America’s broadband infrastructure. According to the June 2016 Ericsson Mobility Report, North American users will consume 22GB of data each by 2021, just on our smartphones.
Washington, DC policymakers must continue to focus on broadband infrastructure. High-speed internet is not just important for finding a good restaurant or watching an online video; broadband access is an income generator. Again, the Pew Report revealed “some 60% of labor platform users say that the money they earn from these sites is ‘essential’ or ‘important’ to their overall financial situations.”
President Donald Trump has professed interest in building out a huge Infrastructure Plan. The Democrats in the U.S. Senate offered a plan of their own to spend $20 billion on connecting America’s communities with high-speed broadband that would create 260,000 jobs. Hopefully these leaders won’t let investing in critical infrastructure like broadband fall into the partisan divide. Getting our urban and rural communities up to speed will need an all-hands-on-deck approach that includes private investment.
America should be proud of the political and educational advancements made by African Americans in the last 150 years. The next generation of progress for African Americans will be economic, particularly eliminating income and wealth inequality. Entrepreneurship and high-quality, high-paying jobs will be an important part of that solution, and increasing access to high-speed broadband will make closing the gaps easier.
Jamal Simmons is Co-Chair of the Internet Innovation Alliance.