People of color disproportionately bore the brunt of small business closures during the pandemic, even as large corporations reaped record profits. But the pandemic has also sparked creative and thoughtful responses to support an equitable recovery among small business owners, while helping them create quality jobs. The LISC Institute for Community Power hosted a conversation with three individuals that have been at the forefront of that experimentation.
Early in the pandemic, one of the most indelible scenes was the overnight shuttering of millions of small businesses, as vibrant commercial corridors transformed into ghost towns. And in a pattern that would repeat itself in countless ways over the course of the pandemic, people of color disproportionately bore the brunt of those closures. In the first months of the pandemic, the number of Black-owned businesses fell by more than 40% and the number of Latinx-owned businesses fell by more than 30%--a rate of closure that was one and a half to two times greater than overall. The inequities have extended into the present: while S&P 400 companies enjoyed 60% higher profits at the end of 2021 compared to the final quarter of 2019, about two-thirds of small businesses owners recently reported that the pandemic continues to affect them negatively.
Yet the pandemic has also sparked creative and thoughtful responses to support an equitable recovery among small business owners, while helping them create quality jobs. On October 27, David M. Greenberg, LISC’s Vice President for Community Research and Impact, convened a webinar roundtable with three individuals that have been at the forefront of that experimentation, who explored the challenges of supporting BIPOC-led small businesses that generate good jobs.
Participating in the roundtable were Kimberly Brown, a Senior Program Officer at the Bill & Melinda Gates Foundation; Maggie Clark, a Manager at Urbane, whose work elevates community-driven processes for equitable development and small business support; and Nia Evans, the Executive Director of the Boston Ujima Project, which organizes neighbors, workers, business owners, and investors to create a community-controlled economy.
The general lack of resources and capacity were identified as key challenges for small business owners. Brown opened by noting that research has shown that roughly 80 percent of employers believe that their success requires investing in their workers. “Many small businesses are in the same socio-economic position as their workers, so the challenges are not lack of aspiration or will, but real resource constraints,” she said.
The challenge was to “harness the momentum of that aspiration” in practical ways to support small business owners. “You’re trying to run a business, trying to make some money, trying to take care of your family—you don't really have time to do a ton of research on what it means to be a high-road employer,” reflected Brown. “That’s where we can come in to provide information and guidance.”
Brown identified a promising lever for creating good jobs: linking access to capital with investments in the workforce. The Bill and Melinda Gates Foundation is working with about ten Community Development Financial Institutions who are integrating job quality–including wages and benefits–into their financial and advising support to businesses, with the hope that the model can lay a foundation for scaling up.
Storytelling emerged as another key resource. The Boston Ujima Project created a set of community standards that BIPOC-owned businesses need to meet in order to join their Good Business Alliance. These include everything from breaking down barriers to jobs for formerly incarcerated applicants to ensuring that at least 60% of the workforce is made up of people of color.
Once businesses pass the community standards, Evans said, “One of the most important things we do is uplift our businesses as high-road employees.” To that end, the Boston Ujima Project has launched a podcast called Yours, Mine, and Ours, which highlights individual businesses. “Our businesses have to compete with everybody else,” she said. “One of the reasons Ujima does a lot of marketing work and storytelling work is to help them compete.”
In the Brooklyn neighborhood of Flatbush, Clark described the launch of Mangrove, a business incubator inside a longtime Caribbean marketplace that serves as a bustling community hub. Along with providing a commercial kitchen and design studio, Mangrove offers technical assistance and has become a meeting place for community members to solve problems and seek out help. “A strong focus is being able to build a really solid resource navigator system,” said Clark, allowing small business owners and others to access the services they need. By being anchored in the community, Mangrove is also able to tailor its offerings based on the evolving needs of members, becoming a trusted and responsive intermediary between residents and service providers.
Clark cautioned, however, against expecting small business owners to fill the social safety gaps that have been exacerbated by the pandemic. She argued that especially in areas deeply impacted by the pandemic, the task of meeting the basic needs that individuals require to remain employed–from mental health services to transportation and childcare–have increased. “That’s a lot for a small business to take on, so I think we should question how much of that responsibility should sit in the private sector.”
Each participant emphasized the need to significantly increase the resources and technical assistance that small businesses need to generate quality jobs for community members. But another theme also ran through the discussion. When considering communities like Flatbush or Roxbury, practitioners, funders, and policymakers need to remember that there already exists a deep well of wisdom and resilience to tap into. As Brown summed up, “The expertise found in impacted communities–I don’t think there’s anything more important, to be honest.”