…business owners account for 20 percent of the wealth gap between average white and Black households
This will help more Americans realize their entrepreneurial dreams and reduce persistent wealth disparities. According to new analysis from the White House Council of Economic Advisers, based on data provided by the Small Business Administration (SBA), differences in business owners account for 20 percent of the wealth gap between average white and Black households.
Small, disadvantaged businesses (SDBs) is a category under federal law for which Black-owned, Latino-owned, and other minority-owned businesses are presumed to qualify.
“Wealth disparity in the U.S. exists partly because of how the single largest spender in the marketplace, the federal government, allocates dollars for goods and services for its procurement. This increase in federal spending with underserved businesses will improve Americans’ ability to fulfill their dreams of business ownership and narrow wealth disparities while helping to grow our economy,” said David Levine, President of ASBN. “Desperately needed economic and public policy change brings economic equality into the realm of the possible and in turn puts more dollars in the economy bringing a benefit to all.”
According to the latest US Census approximately 18.3% of all U.S. businesses are minority-owned and about 19.9% of all businesses are owned by women.
“According to the latest US Census approximately 18.3% of all U.S. businesses are minority-owned and about 19.9% of all businesses are owned by women. With a $7 trillion dollar US budget filled with new infrastructure projects, an increase to a 15% government spend is great news for the growth of a fair and just economy. Investment in small businesses spurs the kind of innovation, growth and economic independence that is the dream for every entrepreneur. It also creates a ripple effect, building stronger communities, schools and neighborhoods. The return on investment will be exponential,” said MaryAnne Howland, ASBN Board Chair, and Founder & CEO of Ibis Communications.
Entrepreneurship is the heart of the American dream, and infusing capital into business that are often disadvantaged by existing capital structures is a necessary step towards investing in true, regenerative growth…
“This executive order flexes the power of public-private partnerships to help address the deeply embedded inequities that permeate our economic system. Entrepreneurship is the heart of the American dream, and infusing capital into business that are often disadvantaged by existing capital structures is a necessary step towards investing in true, regenerative growth,” said Seungah Jeong, ASBN Board Member, and President and CEO of MPOWERD.
“Historically, diverse founders have lacked the support from traditional funding sources to scale and grow sustainable businesses that reach large market cap status. The support from this bill will go a long way towards equitable distribution of capital and support. I am thrilled to see this and hope we see even more growth,” said Val Red-Horse Mohl, ASBN Board Member, and CEO & Founder of Red-Horse Financial Group.
Today’s Biden-Harris Administration announcement of a set of reforms to the federal procurement process will help meet the President’s ambitious target of increasing the share of federal contracts to SDBs, advance the President’s Management Agenda, and increase opportunity for all underserved businesses.
Today’s actions include:
- Asking agencies to increase their goals so that governmentwide spending results in 11 percent of contracting dollars being awarded to small, disadvantaged businesses, up from the current statutory goal of 5 percent. This is the first step towards meeting the President’s goal of ensuring that 15% of federal contracts go to SDBs by 2025.
- Releasing, for the first time, disaggregated data of federal contracting spend by race/ethnicity of business owner, a powerful transparency and management tool.
- Implementing major changes to the federal government’s use of “category management” to boost contracting opportunities for underserved small businesses.
- Increasing the number of new entrants to the Federal marketplace and reversing declines in the small business supplier base.
- Adopting key management practices to drive accountability and institutionalize achievement of small business contracting goals.
The American Sustainable Business Network (ASBN) is a partner to businesses and the investor community to bring collective wisdom and public policy solutions to the systemic issues that will create a more just, inclusive, and sustainable society and economy.
Founded through the merger of the American Sustainable Business Council (ASBC) and Social Venture Circle (SVC), ASBN develops and advocates for solutions for policymakers, entrepreneurs and business operators, and investors that support an equitable, regenerative, and just economy that serves all stakeholders.
As a multi-issue, membership organization advocating on behalf of every business sector, size, and geography, ASBN and its association members collectively represent over 250,000 businesses across our networks.