Affirmative Action and Black Entrepreneurship

By Thomas D. Boston | Go to book overview
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A strategy for black business and employment growth in the next century

The economic status of blacks has improved during this current period of growth. Poverty among blacks is at the lowest level since the government began tracking the figures in 1959, and over the latest year the average household income of blacks increased by 3.6 percent while the income of whites increased by 2.2 percent. But these improvements bring to mind the metaphor of the half-filled glass—that is, the glass may be interpreted as being half-full or half-empty. Consider this: even though average household income among blacks has improved, it is still only 63 percent of that of whites, while 30 percent of black families still live below the poverty line. Finally, while the rate of unemployment among whites is 3.7 percent, it is 9.2 percent for blacks.

In the 1970s, blacks comprised 20 percent of all unemployed workers. Twenty years later they comprise the same percentage even though they constitute only 11.2 percent of the labor force and the economy is experiencing the longest peacetime expansion in history. Indeed, racial disparities have not changed significantly over the last twenty years. As long as the employment of blacks is assumed to “trickle down” from general full-employment policies, racial disparities will remain.

Suppose, however, that there are two types of company in the economy, Type A and Type B. Suppose in Type A companies, 10.5 out of every 100 workers are black. By contrast, in Type B companies eighty out of every 100 workers are black. Now if we want to create jobs for blacks, what is the solution? Simple—create more Type B companies. In general, about 80 percent of all employees in black-owned firms are black while in the economy as a whole, only about 10.5 percent of all employed workers are black.

We have previously shown that in Atlanta the most successful


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Affirmative Action and Black Entrepreneurship


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