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Racial inequality is an unresolved issue in the United States. In recent months, business leaders and policymakers have been shining a brighter spotlight on this issue and are coming up with innovative ideas to address the opportunity gaps that prevent Black Americans and other people of color from achieving their American dream.
The U.S. Chamber recently hosted a fireside chat with Sen. Tim Scott (R-SC) where he shared his thoughts on how the private sector and government must work together to promote equality of opportunity for all Americans.
Scott said that the bottom line is not ensuring everyone ends up in the same place, but ensuring that everyone is given a fair shot at success throughout their life.
“The one underlying theme of all the issues that we focus on is access to opportunity,” Scott said. “And, frankly, the foundation of access to opportunity in America is the notion of fairness. Americans are really a people driven by fairness and access.”
The U.S. Chamber is also working to bridge opportunity gaps for all Americans. In June, the U.S. Chamber launched the Equality of Opportunity Initiative to develop sustainable solutions to help close race-based opportunity gaps in education, employment, entrepreneurship, and criminal justice. Systemic inequalities in these areas perpetuate broader inequalities in our society, hold back individual and business success, and hinder our country’s economic growth.
Entrepreneurship is one of the places where key disparities persist—and one of the key issues holding back Black entrepreneurship in particular is a lack of access to capital. Consider the following statistics:
- Black Americans represent 12% of the U.S. labor force but only 9.4% of business owners.
- Black-owned non-employer businesses are less than half as likely to get financing as white-owned firms.
- Black entrepreneurs are nearly three times more likely to have business growth and profitability negatively impacted by a lack of financial capital.
Scott cited his own experience as a young entrepreneur to highlight the vital importance of capital for new businesses.
“Access to capital and credit creates opportunity for small businesses to start,” Scott said. “From police reform to criminal justice reform to economic access to opportunity…We’ve done a really good job of focusing on the issues that will change our nation in a positive way.”
Scott is co-sponsor of the “Reaching America’s Rural Minority Businesses Act,” which would authorize the U.S. government agency known as the Minority Business Development Agency (MBDA) to establish up to 10 business centers at Historically Black Colleges and Universities (HBCUs) to serve rural and underserved communities. The Act has substantial bipartisan support from Sens. Christopher Coons (D-DE), Thomas Tillis (R-NC), Timothy Kaine (D-VA), and Roger Wicker (R-MS).
“By having more MBDAs located around the country especially in the rural areas, you’ll bring expertise to those would-be entrepreneurs and you’ll better equip them for success.” Scott said. “When that happens the multiplier effect in the rural communities explodes. For every job created by a small business you could see two more jobs created by other small businesses.”
Separately, the U.S. Chamber has maintained a long-term partnership with HBCUs to promote diversity at all levels of business through its Next-Gen Business Partnership.
Noting that Black-owned businesses have been disproportionately impacted by the coronavirus pandemic, Scott said that the U.S. Senate would be looking to pass new coronavirus relief legislation before the end of the year.
“Having enough profit on an annual basis to create a rainy day account that goes for six months, seven months, and beyond—there are just no businesses essentially that are prepared for that kind of a haul,” Scott said. “We’re trying to get a second bite at the Paycheck Protection Program apple. That loan-that-becomes-a-grant has been key to saving 50 million jobs nationwide…We’re hopeful that with a second bite of the apple, we can save millions of jobs once again.”
The U.S. Chamber has a collection of vital proposed legislation it has endorsed to help close race-based opportunity gaps. It also supports additional coronavirus relief legislation for businesses affected by the pandemic.
As a nation, we must address this issue with a robust plan of action. While we’re seeing plans in motion, more must be done. The business community must work together with policymakers to address these pressing challenges. We must now drive action, through a combination of private sector solutions and public policy, that results in measurable and material change.