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The Economist: African-American businesses need more than “buy black” campaigns

The Economist, June 28, 2020: African-American businesses need more than “buy black” campaigns

A “buy Black” challenge, sponsored by the Black Lives Matter protest movement, began on June 19th, or “Juneteenth”, an unofficial celebration of the abolition of slavery in America. The campaign runs until July 4th. If American consumers directed just a small portion of the $13 trillion they spend each quarter to Black businesses, that surge in revenues might help build them up. With 13% of the population, Black Americans owned just 2.1% of small businesses with employees, according to a study in 2012 by the Census Bureau. Today they hold 2.1% of the country’s private business wealth, according to the Federal Reserve.

A report on Black businesses conducted for the Congressional Black Caucus Foundation outlined the challenges they face in trying to expand. These could be described as a version of Ben Franklin’s purported adage—that money makes money, and the money money makes makes more money—and applied to many forms of capital. Beyond money, starting and building a business also takes human and social capital. Black Americans start with less of all sorts.

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