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The U.S. Department of Commerce Minority Business Development Agency (MBDA) awarded $4.72 million in federal funding to strengthen and expand its national network of business centers, U.S. Secretary of Commerce Gina Raimondo announced on Wednesday.
In an interview with The Black Wall Street Times, Raimondo celebrated the funding as a “historic” investment toward underserved communities and acknowledged more work needs to be done.
The nearly $5 million in new funding comes after the Biden Administration pledged to support minority-owned businesses during his presidential campaign. According to the Commerce Department, funding for the Business Center Program now totals $37 million since he took office in 2020.
“What the president has done is historic. This is the most money ever that has been put into the Minority Business Development Agency,” U.S. Secretary of Commerce Gina Raimondo told The Black Wall Street Times on Thursday.
The funding is part of an effort to expand access to capital and infrastructure project contracts to Black and IPOC entrepreneurs.
“This economic comeback after Covid, People of Color have done better than any other economic comeback that we’ve had,” Raimondo added.
Mckinsey report shows wide disparity between Black and white entrepreneurs
Meanwhile, according to a 2021 study from the Mckinsey Institute for Black Economic Mobility, “Only 2 percent of private US firms with more than one employee are Black owned,” despite Black people making up roughly 13% of the U.S. population. “Those that do exist are smaller than non-Black-owned peers on average in nearly all sectors, the report added.
The facts paints a daunting picture of the wide income and wealth gap between Black Americans and their non-Black counterparts. The report notes that 43% of Black workers earn less than $30,000 a year, and Black businesses are 2.4 times more likely to be denied funding versus their white counterparts.
“Have we done enough? No, there’s always more to do. We still live in a very unequal society,” Secretary Raimondo told The Black Wall Street Times when asked about the wide economic disparities between Black and white entrepreneurs.
She noted other efforts underway, such as expanding access to Broadband in Black and underserved communities across the nation.
The Mckinsey report notes that if Black entrepreneurs were to receive the amount of resources as white entrepreneurs, it would generate an additional $1.6 trillion in revenue and lead to the creation of 615,000 new Black-led workspaces.
“I think the president couldn’t have done any more than he’s done until this time,” Raimondo said.
A drop in the bucket?
The U.S. is a country that has been able to quickly mobilize billions of dollars in aid for Ukraine to push back against Russian aggression. Many Black Americans feel the financial support for their communities represents a drop in the bucket, despite Black Americans being instrumental in elevating Biden to the presidency.
“It’s not a drop in the bucket,” Raimondo said. “Since the president has been in office under his leadership Congress has appropriated trillions of dollars” for infrastructure and support to communities across the nation.
A major contributor to business success is the ability to secure government contracts. Yet, states like Oklahoma don’t allow race as a factor in awarding contracts, leading to the continued disparity that Black entrepreneurs face.
As a former governor of Rhode Island and a businesswoman, Secretary Raimondo said the country’s greatest economic strength is our diversity.
“We have to find ways to make sure they’re included. And to not do so actually weakens our economy.” Raimondo said it’s the right thing to do for equity and for business. “Because we’re losing out on all the talent.”
In addition to strengthening existing minority business centers, the new funding will also go toward the creation of new centers in Arkansas, Indiana, Oregon, South Carolina, Utah and Wisconsin.
Commerce Secretary encourages Black Wall Street to “keep going”
In recent years, the police lynching of George Floyd and a renewed interest in Tulsa’s historic Black Wall Street has led to increased support for Black entrepreneurs.
As local leaders work to rebuild a legacy in the Greenwood District, Secretary Raimondo offered a message for the next generation of Black Wall Street.
“Keep going. You gotta do it. We’re counting on you being successful.”