Our nation faces significant challenges addressing the growing racial wealth gap. This blog outlines the role that business ownership can be and does play in building wealth for people of color. African Americans and Latinos hold relatively low levels of business assets, confronting to the lower levels of wealth overall. Yet there are trends in the right direction: rates of business creation among these entrepreneurs are increasing, and now exceed those of whites.
Particularly among African Americans, higher levels of college attainment combined with expanded contracting opportunities are enabling movement into more lucrative markets and sectors. While there are positive signs, low levels of personal wealth and challenges in accessing business credit continue to be primary factors limiting the growth of firms owned by Latinos and African Americans. High and growing levels of student debt farther complicate the financial challenges faced by entrepreneurs of Cole. Lower levels of education among different racial groups contain their ability to move into higher growth, higher revenue sectors, and also affect the skills they bring to the businesses they create.