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The lingering effects of steady inflation are not only being felt by the consumer–Black business owners feel it too.
Owning and operating a Black-owned Business comes with a unique set of challenges, and surviving the global pandemic has pushed many to the brink.
Building connections by offering a welcoming safe space for the community is vital to the culture. And having a thriving, professional, and accessible business is key to that experience. Yet, nearly two years into the COVID-19 pandemic, the highest rate of inflation since 1982 is forcing Black-owned businesses to make hard decisions.
According to a Goldman Sachs survey obtained by The Grio, 60% of Black small business owners have increased the prices for products or services in comparison to 68% of an overall population of business owners.
While lower than average, our businesses are also beginning to raise prices just to remain profitable. Add in The Great Resignation and declining consumer spending, Black-owned Businesses have shut down at twice the national average rate.
The pandemic forced about 20% of small businesses to close nationwide, but that number doubled with Black-owned small businesses according to Boston-based nonprofit Interise.
The problem is not solely inflation or supply chain issues. According to Grieve Chelwa, director of research for the Institute on Race, Power and Political Economy at The New School, workers who are capable should request their pay be commensurate with rising inflation.
One historic way to combat unforeseen inflation for Black workers has been to unionize. As a matter of fact, Black workers are overrepresented in the union workforce according to a 2016 study by The Center for Economic and Policy Research.
In 1983, Blacks were 13.7% of the union workforce; in 2015, they were 14.1% of the union workforce. Yet, Blacks were only 9.7% of the workforce in 1983 and 11.9% of the workforce in 2015 according to CERP.
While this benefits Black union workers, many others do not have an organized pathway to fair wages. Many small businesses only employ a small number, which in theory, allows the owner to dispense a living wage. However, if a business’ viability struggles, workers’ pay cuts and terminations are usually soon to follow.
“It’s not very easy for you to increase your wages,” Chelwa stated. “Most people, Black people, marginalized workers, poor people don’t have that kind of power.”
While some Black-owned businesses have closed their doors forever, others have revamped their strategy to stay in the black. Regardless of the industry, inflation is hitting our businesses particularly hard and leaving us more financially vulnerable than before.