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The Growth of Black-Owned Businesses: Entrepreneurship by Necessity

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(NNPA) "I had to make my own living and my own opportunity! But I made it! Don't sit down and wait for the opportunities to come. Get up and make them!" – Madam C.J. Walker, trailblazing African American businesswoman.

There is a silver lining in the dark cloud of the great recession. A new Census Bureau report reveals that from 2002 to 2007 the number of Black-owned businesses in the United States increased by 60.5 percent to 1.9 million – more than triple the national rate. According to Census Bureau Deputy Director, Thomas Mesenbourg, “Black-owned businesses continued to be one of the fastest growing segments of our economy, showing rapid growth in both the number of businesses and total sales during this time period.”

The reasons for this are many, beginning with the long history of African American entrepreneurship in response to poverty, high unemployment, and discrimination. Consider the case of Madam C.J. Walker, the daughter of slaves who, in the early 1900s, turned her dream of financial independence into a hair care and cosmetics business that revolutionized the beauty products industry, created good paying jobs, and made her a wealthy woman and philanthropist.

Like Madam C.J. Walker, many African Americans may have turned to entrepreneurship in the years covered by the Census Bureau study because of high unemployment in our communities. The fact is, Black unemployment never got back down to where it was before the recession in 2001. So in effect, what we are seeing is a bit of entrepreneurship by necessity. There’s also an economic independent streak, particularly among emerging generations in the Black community. Building a business gives great satisfaction and cushions them from the shock of losing jobs because of economic down cycles.

New York State leads the country with more than 204,000 Black-owned businesses, followed by Georgia and Florida respectively. From 2002 to 2007, nearly four in 10 of these businesses operated in the health care and social assistance; and repair, maintenance, personal, and laundry services sectors. The retail trade and health care and social assistance sectors accounted for 27.4 percent of Black-owned business revenue.

The survey also found that in addition to an increase in the number of Black-owned businesses, annual sales increased by 55% to $137.5 billion.

I recently called on federal, state, and local governments to develop a “hyper-focus” on Black- and minority-owned businesses. Every city, county, and state needs to have a plan that focuses on small and minority business. There is a spirit of entrepreneurship out there that needs to be nurtured and energized.

While the Census Bureau report is generally good news, we know that Black businesses still make up only seven percent of all companies and they tend to be smaller and have lower gross receipts than other businesses. Black-owned businesses are also often hampered in their revenue growth by a lack of capital, connections, and contracts.

What I hope this report says loudly and clearly to the investment community is that you are missing an emerging market in the United States. If minority businesses are growing at a faster clip than overall businesses, imagine what the growth rate would be if those barriers were eliminated or lowered. We need the investor community to look at this report and recognize that they are missing an incredible opportunity.

Marc H. Morial is the President and CEO of the National Urban League.

Letter to the Editor

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By Assembly Member Wilmer Amina Carter –

No one is happy with the steps needed to balance the state's budget. The Governor's budget proposal hinges on a special election in June to extend a package of temporary tax measures for five additional years.The Governor pledged that taxes would not be raised without the consent of the voters.

A two-thirds vote of the legislature is required to place the tax extensions on the June ballot, but some elected representatives oppose allowing the question of temporary tax extensions to go to the voters.

Voters deserve the opportunity to choose how to finance state government. Working together as Californians we will get through these tough times.

As we share in the blessings of our state, we must also share in the sacrifices.

California's voters can weigh the potential consequences of failing to extend some taxes. But voters won't get this chance if legislators block the measure from the June ballot.

Tell your State Senator or Assembly Member that you want the opportunity to decide how to raise and spend your tax dollars. Urge them to vote to place the Governor's tax package on the June ballot.

If we all do our part we can get California through this crisis.

Assembly Member Wilmer Amina Carter (D-Rialto) is Assistant Majority Policy Leader for the 2011-2012 session of the California State Assembly. She represents the 62nd District which includes Colton, Rialto, Muscoy, Bloomington and parts of Fontana and San Bernardino.

Why the Federal Government Lacks Black Business

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(NNPA) The Civil Rights Act was passed in 1964. We are going into 47 years of this great law but the memo has never been circulated around to federal employees who deal with the massive procurement system of the federal government. From one presidential administration to the next nothing of substance seems to happen in terms of Black businesses winning procurement dollars. There is a lot of corruption, discrimination, and bullying that disallows a small Black business to get a foothold. There needs to be a massive overhaul in how diversity in federal procurement should be set up. Here is some food for thought to change this pitiful state of affairs.

Forty-seven years and we cannot do more than two percent of the total for Black owned businesses in any given fiscal year. There is a lack of accountability. Growth and robust activity should rest on the shoulders of agency secretaries – the President’s Cabinet. It should affect their bonuses and annual evaluations. Likewise, Deputy Secretaries should bear the same burden. If this were to happen you would see a great amount of attention given to the issue. Procurement officials would be pushed into good performance and pitiful performance would not be tolerated.

The Office of Small Disadvantaged Business Utilization (OSDBU) is at every agency. However, I have been in D.C. for 19 years and may have met eight of them at best. They hide behind their desks and just count the years before their retirements. This position should change from a career type hire to a political hire. Each OSDBU would have four to eight years to make his mark and set his legacy. The political hires should have a good amount of entrepreneurial experience and understand what the Black business owner is going through. Laziness and corruption should not be tolerated and the Secretary of each agency must watch and measure the activity of his respective OSDBU.

“Small Disadvantaged Business” (SDB)? I was shocked when my sons requested a SDB certification application for one of their companies. The Small Business Administration (SBA) wrote them back saying that they no longer certify companies for SDB status. Their reason was that SDB’s probably wouldn’t win any federal contracts anyway. Isn’t it confusing that we have an office there in each agency to help SDB’s and the SBA is eliminating any certification for them. Thus, they are going to rely on self-certification and that will open the door to mass fraud and corruption. It will contaminate the reporting process.

In regards to reporting, there is much room for updating. The SBA and federal agencies love to aggregate their contracting numbers. They want to hide the paltry performance they do in Black business procurement. They don’t want to directly answer any inquiries about Black business procurement by announcing or reporting what minorities per se are doing. “We are doing 10% with minorities or 15% with minorities and are meeting our goals.” We want to know exactly what they are doing with Black firms not Native Americans, Hispanics, Asians, etc. They love to hide their anemic performance with Black firms.

Then we need to stop the games played by major federal contracting firms. How much SBA is in on this is yet to be determined. Are they that corrupt or that stupid? Contracts, many of them no bid, are let out in amounts of billions of dollars. Before the contract is awarded the SBA comes in and does a review of the subcontracting list for utilization of small businesses inclusive of minority and disabled veteran owned businesses. The prime contractors will go out and verbally agree with Black businesses to utilize them on the massive contract. The SBA comes in and sees the printed list of small and minority owned businesses and approves the contract. Funny thing, after the prime contractor has the contract he never speaks to the Black contractor again. It was all a written sham. Does the SBA include these forecasted numbers in their reports like they actually happened? Right now I have two such complaints against Lockheed and Fluor corporations on Department of Defense projects. We may file suit, if the SBA won’t “buck up”.

One of the worst agencies is the Department of Transportation. An example would be their Federal Highway Administration that does less than 1.2% with Black businesses (their figures). We can’t get business at airports like we used to and the new high speed rail they are proposing will not have a minority business program at all. Yet, the SBA awards this agency with their “Agency of the Year Award” for the last three consecutive years. What are they thinking?

The above would be a start to improvement. What if the Congressional Black Caucus would form a taskforce and analyze quarterly reports from each agency? Would Pelosi put them in “time out”?

Mr. Alford is the co-founder, President/CEO of the National Black Chamber of Commerce, Inc ®. Website: www.nationalbcc.org. Email: halford@nationalbcc.org www.twitter.com/nationalbcc

Young People Falling Behind Economically

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By Marian Wright Edelman, NNPA Columnist –

(NNPA) While there is a lot of talk today about jobs, there has been far too little attention paid to the job prospects of young people. A new report prepared for the Children’s Defense Fund shows young people have lost more ground economically than any other age group during the last three decades. Dr. Andrew Sum, professor and director of the Center for Labor Market Studies at Northeastern University, and his colleagues paint a grim economic picture for the futures of young workers and young families, and Black young people and young families fare the worst. The widening income inequality and declining real incomes of young Black families with children raise serious questions about the economic and social futures of their children. The American Dream for poor young people and their children is vanishing on our watch.

Why does employment for these young people matter so much? The researchers have pointed out that what might seem like “just” a first job is much more important: early work experience is a form of “human capital investment” that influences the future employment and annual earnings of young adults. But, employment rates for teens and young adults often decline at above average rates during economic recessions and jobless recoveries. The number of teens and young adults ages 16 -29 who were “underutilized” in the labor market grew substantially between 2000 and 2010. These are young people who were unemployed (jobless but actively looking and available for work); not actively looking for work (but still wanting to work); or underemployed (in part time jobs but wanting to work full time). Black young adults, and especially Black males, had the highest labor underutilization rates, at 40 percent and 43 percent respectively. As the Children’s Defense Fund re-launches the Black Community Crusade for Children to strengthen our children’s futures, these vanishing employment opportunities are one part of the huge crisis for which we need to find solutions.

Dr. Sum and his colleagues found the young people who need applied work experience most were the least likely to receive it, with negative consequences for their own future school retention, employability, wages, and earnings. Between 2007 and 2010, the number of young people 16 to 29 officially unemployed rose by nearly 80 percent. Education levels make an enormous difference in the employability of young people. Black high school dropouts 16 to 29 were four and a half times as likely to be underutilized as Black young people in the same age group with master’s or higher degrees. Employment rates of the nation’s 20-24 year olds ranged from a low of 49 of every 100 high school dropouts to a high of 85 of every 100 bachelor’s degree holders. The deteriorating labor market has also resulted in another problem—a rise in “mal-employment” among young college graduates, meaning more of them are holding jobs in occupations that don’t require much schooling beyond high school. And, this ultimately hurts younger and less educated workers too, as mal-employed college graduates often displace their less educated peers from these jobs. These gaps based on educational attainment widened between 2000 and 2010, reducing the opportunity for young adults without post secondary schooling to form households, marry, and support their children in young families.

Along with the decline in employment opportunities, family income inequality has risen for young families, and the median real incomes of young families have declined—once again, taking an especially great toll on young Black families. The median income for young Black families in 2009 was slightly under $20,000—a decline of 24 percent over the last three decades, and only 45 percent of the level for White families. Once again, education levels mattered: the median family incomes of young Black families ranged from under $9,000 when the family householder did not have a high school diploma to $17,000 for high school graduates and to nearly $65,000 for those headed by a householder with an advanced degree.

Overall, 55 percent of young Black families with children were either poor or near poor, and nearly three-fourths were low-income. Three of every four single mother families with a head lacking a high school diploma were poor in 2009. The gap in young families’ income has risen so dramatically that children in the bottom half of the distribution are falling backwards.

What does all of this mean? It means no discussion of continued economic recovery and how to add jobs can be complete without a special focus on how to help young workers—and no discussion on ending child poverty or securing the futures of our nation’s children, especially Black children, can be complete without special attention to the economic status of young families. Creating more employment opportunities for younger workers and making sure young people graduate from high school and move on to higher education are essential to address the needs of young families and their children. Their children’s economic and social futures depend on it.

To read the full report, Deteriorating Employment Rates and Incomes Threaten the Future of Young Workers and Young Families: Black Young People and Young Families Fare the Worst, visit the Black Community Crusade for Children’s Web page.

Marian Wright Edelman is President of the Children's Defense Fund whose Leave No Child Behind® mission is to ensure every child a Healthy Start, a Head Start, a Fair Start, a Safe Start and a Moral Start in life and successful passage to adulthood with the help of caring families and communities. For more information go to www.childrensdefense.org.

Are Black Voters Volunteer Slaves?

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“In my career I guess I saved 1,000 slaves. I could have saved 1,000 more had they only known they were slaves.” Harriet Tubman at her retirement ceremony.

(NNPA) It is incredible how Black power has gone in reverse in terms of political empowerment. Gone are the days when we had mayors in San Francisco, Los Angeles, Seattle, Denver, Chicago, New York, New Orleans, etc. As we rose up, we soon turned around and started going in reverse. The Democratic Party has masterfully engineered us into a slave mentality which many of us can’t realize or gain enough courage to fight against. We are put into a subservient role and smile. It is as if we want this role versus moving ahead with progress.

To paraphrase G. Carter Woodson’s The Miseducation of the American Negro: If the colored door becomes closed and all can go through a main door, the Negro will feel uncomfortable and try to reopen the colored door. He will ram and bump that colored door in the back of the building trying to reopen it. If he surmises that the door can’t be reopened he will then bring a saw and hammer and build a new colored door as he is convinced that his destiny is servitude and indignity.

What is happening now in cities where we have the demographics to gain political power is a servitude to the White operatives of the Democratic Party. They are picking the candidates for us and most times they are not of our ilk or race. Woe to a people who let another entity pick their leaders.

The best example of this is Chicago. Chicago had one of the best mayors in history, the Honorable Harold Washington. They have not had the organization or courage to come up with an equivalent since. The demographics of this city tell the story. There are 601,674 Black registered voters in Chicago which is 52.2% of the total. Hispanics have 200,000 registered voters and Whites have 350,000 registered voters so Blacks could defeat them even if they combined their votes together. In addition to that, the greatest growth in registered voters is coming from Blacks with a growth of 5.25%. That seems like a slam dunk for Black political empowerment in Chicago. However this city cannot get itself to vote in a Black mayor since the early 1990’s. They await the anointment from the White Democratic Party and bow to it. They are indeed volunteer slaves. They cry about low contracting with Black businesses and terribly high unemployment but yet don’t seem to realize that the solution is right in their own hands. They are building that door in the back.

Gone are the days when giants like Willie Brown, Thomas Bradley, Wellington Webb, Harold Washington, Coleman Young, Michael White, David Dinkins, Marion Berry, Maynard Jackson and other great mayors made it imperative to create Black millionaires that would provide thousands upon thousands of jobs to our communities. Their legacies are locked in. I can take a business trip starting at the Baltimore Thurgood Marshall Airport directly going to the Thomas Bradley LAX airport. From there I can go to the Maynard Jackson airport in Atlanta and then decide to visit some family in Mississippi via the Medgar Evers Airport in Jackson, MS. That is testimony to our heroes of the Civil Rights Movement. What is lacking is the follow up to all of this courage, blood, sweat and tears. We have turned it over to one political party and they have assigned “party punks” to placate us. My people, we are no longer slaves and it is long overdue for us to act accordingly. We must select our own leaders and put them in office and hold them accountable. The Chicago example is replicated throughout our nation. If we don’t wake up then it is on us.

There is another poison that is going around. They are trying to mold our opinions. Yes, trying to influence our thoughts through printed press. The first thing they want is to kill our own media. Our radio, TV and printed media are the lifeblood of our culture. Thus, they want to destroy them and replace them with “front” entities who try to substitute as our media. They bought out BET along with Emerge magazine. Now they want to kill all of the Black newspaper publications. The weapons of choice are coming from publications sponsored by NBC, the Washington Post, and the Huffington Post. These purely White corporations are trying to mold our opinions and control our thought via parading as “Black” publications. Don’t go for it. If they aren’t of our kind they cannot rule our mind. Support our Black press – the real Black press as the others are of ill intent. Stop being a volunteer slave as we have been free for 150 years. Fight the power!

Mr. Alford is the co-founder, President/CEO of the National Black Chamber of Commerce. Website: www.nationalbcc.org. Email: halford@nationalbcc.org www.twitter.com/nationalbcc

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