(Special to The Root)—African-American-owned businesses are the fastest-growing (pdf) segment of the women-owned-business market and are starting up at a rate six times higher (pdf) than the national average for all new firms. As the Center for American Progress’s new report “The State of Women of Color in the United States” shows, this is good news for African-American women.
African-American women, who make up 13 percent of our nation’s female population, suffer disproportionately lower rates of being insured, being employed, obtaining a college degree and being represented in elected office, among other indicators of prosperity—a continuation of a longer trend.
Despite these gloomy indicators, the gains that African-American women have made in business are a reason to celebrate. The entrepreneurial spirit is strong among African-American women, who today own 1.1 million firms within a variety of industries, top among them being social assistance and health care. In fact, the number of companies started by African-American women grew nearly 258 percent from 1997 to 2013.
Half of all African-American-owned businesses are owned by women, and among businesses owned by women of color, 42 percent are owned by African-American women. Businesses owned by African-American women have doubled their sales over the past decade and just this year have grossed revenues estimated to be around $45 billion. These successes have benefited not just African-American women and their families but also their communities and the U.S. economy as a whole.
Yet while African-American women are making strides in areas such as business, the report shows that they still face enormous gaps compared with white women, African-American men and even some other women of color who are making faster gains among certain indicators. Latina women, for example, have been steadily increasing their four-year college-graduation rate, while the rate for African-American women has been stagnant and, at times over the last decade, even decreasing.
Because education and training are so central to increasing earnings and assets, this contributes to the fact that African-American women have the highest poverty rates among women and are most likely to be members of the working poor. This is especially troubling considering that the majority of married African-American women are the primary breadwinners for their families, while their median weekly earnings are far less than those of their African-American male counterparts.
Even more sobering is the fact that single African-American women with children have, on average, no wealth (pdf), which is critical for individuals and families to build up and rely on during difficult economic times. This puts African-American women in a particularly fragile state of economic insecurity.
As explored in “The State of Women of Color” report, the United States, in order to be competitive in the fast-growing global market, must invest in its future workforce by addressing the gaps that African-American women, and women of color as a whole, face in economic security, poverty, health, educational attainment, political leadership and entrepreneurship. We need a workforce that is prepared, educated and healthy in order to innovate, create and succeed in the high-impact jobs and industries that our nation seeks to advance. And supporting the advancement of African-American women—proven self-starters—is central to advancing this goal.
Eliminating the gaps between African-American women and others is an opportunity to improve the lives of these women and their families, but it is so much more. It is an opportunity to strengthen our workforce and purchasing power—and that’s good for the economy, which means that it’s good for everybody. But it will happen only if we choose to seize it.