Why Rise of Black Entrepreneurship Isn’t Helping Black Unemployment

February 18, 2011  |  

(Huffington Post) — African-American entrepreneurship is on the rise at rates greater than the general population, according to data from the Census Bureau. The newly-released figures, reflecting the period between 2002 and 2007, show that the number of businesses owned by African Americans rose nearly 61 percent in those five years. By comparison, during the same period the overall number of U.S. businesses increased by just 18 percent.

These figures are encouraging, but they are not surprising. Inner cities — where 82 percent of the residents are minorities — experienced job losses throughout the first decade of this century, despite growing job markets in suburbs and outer regions of cities from 2000 through 2008. Many African Americans — like other Americans — have turned to entrepreneurship out of necessity where job growth has slowed or disappeared. This trend is likely to continue for all Americans as we continue to shift to a new, globally competitive economy.

The data also reflect the types of companies primarily being created. In 2007, nearly four in ten of these African American startups operated in the healthcare and social-assistance sectors, as well as repair, maintenance, personal and laundry services. Consistent with the type of businesses being started, the majority of the African-American businesses employed between one and four people.

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