@OfTheCross
Leveling the playing field for entrepreneurs of color-
Every American should have a fair shot at starting a small business. The only things that should determine whether a new business succeeds are the strength of the idea and the hard work of the owners and employees.
But today, the playing field is tilted against entrepreneurs of color. On average,
Black,
Latinx,
Native American, and other minority households have a lot less wealth than white households. That means they have less of their own money to put into their business and
less collateral to attract outside credit. The typical Black entrepreneur
starts a business with $35,000 in capital — a third of the startup capital for the typical white entrepreneur — and other entrepreneurs of color face similar
challenges.
biggest reason that promising Black-owned businesses on average are less profitable and bring on fewer employees than white-owned businesses. It’s part of why entrepreneurs of color
own less than 20% of businesses with paid employees despite making up almost 40% of the population. And it’s helping create a small business gap that costs us
millions of jobs and billions in economic growth.
The small business gap is another example of how the
racial wealth gap in America holds back our economy and hurts Black, Latinx, Native American, and other minority families and communities. And because the government helped create that wealth gap with decades of sanctioned discrimination, the government has an obligation to address it head on — with bold policies that go right at the heart of the problem.
A First Step to Addressing the Black-White Wealth Gap
For decades, the federal government discriminated against Black families by denying them access to the same kind of federal housing subsidies that white families received to purchase a home — a practice known as “redlining.” The federal government officially ended that form of discrimination in the 1960s and passed the Fair Housing Act. Yet the gap between white homeownership rates and Black homeownership rates
today is about 30% — bigger than it was in
1960 when housing discrimination was legal.
This enormous gap is a moral stain on our country. And because the government bears a big part of the blame for it, the government should take real steps to fix it.
My housing bill takes a first step by creating a first-of-its-kind down-payment assistance program. The people eligible for assistance must be first-time homebuyers who live in a formerly redlined neighborhoods or communities that were segregated by law and are still currently low-income If they qualify, they are entitled to a substantial grant they can put towards a down payment on a home anywhere in the country. The program will provide thousands of families with a real chance to buy a home — the same opportunities the government denied to previous generations of residents of the area.
Professors Mehrsa Baradaran and Darrick Hamilton have said this proposal is the “first since the Fair Housing Act with the explicit intent of redressing the iterative effects of our nation’s sordid history of housing discrimination,” and that it “has the potential to make a substantive dent in closing our enormous and persistent racial wealth gap.”