Objectivity lies at the foundation of Black Business Champions. This means that we seek the truth in everything and try as much as possible not to make assumptions. Part of this is achieved by doing research and evaluating statistics.
The purpose of this page is to give a general insight into the current economic situation of Black communities in the UK and the USA. They illustrate some of the challenges Black businesses owners may face. We also share our views on the implications of these statistics. Part of the mission of Black Business Champions is to educate. To solve a problem, an in-depth understanding of that problem is crucial. We hope that these statistics will give you some food for thought.
Although the UK and USA are the focus of this page, we welcome statistics from all countries! If you have any statistics to share with us, please email them with the source to email@example.com, and we will do our best to feature them here.
BUYING POWER AND
THE POWER OF BUSINESS OWNERSHIP
According to the 2011 Census, the Black population in the UK is more than 1.9 million (3% of total population). The Centre for Research in Ethnic Minority Entrepreneurship (CREME) found that firms owned by people of African and Caribbean origin generate over £10 billion for the British economy.
According to the Institute of Practitioners in Advertising (IPA), the spending power of Black consumers is £300 billion.
In an article by Sonia Brown of National Black Womens Network, Daniel Lister, Founder of My Black Market, says that the Black community spends 95% of its money outside of the community. Of the remaining 5% that is spent within the community, 3% goes to non-Black owned businesses. This, he says, leaves us with only 2% of our income; and nobody can live off 2% of their income.
This is not hard to believe. Just think about hair shops targeted to African and Caribbean women – how many have you seen that are Black-owned? This is even more profound when you consider that Black women spend six times more than their white counterparts on hair care. That’s a lot of money that is leaving the Black community.
What would happen if more of this £300 billion circulated within the Black community?
We take a guess: greater consumer investment in the community, creating more successful Black businesses, that generate more profits. More profits and more growth mean that more Black businesses will be able to employ more people, gradually decreasing the unemployment of Black people in the UK (see unemployment statistics below). More business leaders will arise to inspire the community and help others achieve their goals in life. A better future for Black communities begins to shape out.
The overall African-American population of the US is 17%. In the most recent US Census Bureau study (2012), it was found that there were 2.5 million businesses owned by African-Americans, which is 10% of the total number of businesses in the US.
Moreover, it was found that Black-owned businesses generate more than $150 billion per year in revenue for the US economy.
According to a recent study by the Nielsen Company:
African-Americans have a collective buying power of over $1.1 trillion, increasing to about $1.3 trillion by this year (2017). They argue that this makes African-Americans “more relevant than ever” as a consumer bloc.
Despite this however, only a mere 2% of that $1.1 trillion buying power is invested in Black-owned businesses in the US!
Moreover, the National Association for the Advancement of Colored People (NAACP) reports:
“Currently, a dollar circulates in Asian communities for a month, in Jewish communities approximately 20 days and white communities 17 days. How long does a dollar circulate in the black community? 6 hours! African-American buying power is at 1.1 Trillion; and yet only 2 cents of every dollar an African-American spends in this country goes to black owned businesses.”
What would happen if more of this $1.1 trillion circulated within the Black community?
We will repeat what we wrote above about UK businesses: spending more money with Black-owned businesses will lead to greater consumer investment in the Black community, creating more successful Black businesses, that generate more profits. More profits and more growth mean that more Black businesses will be able to employ more people, gradually decreasing the unemployment of Black people in the US (see unemployment statistics below). More business leaders will arise to inspire the community and help others achieve their goals in life. A better future for Black communities begins to shape out.
The following infographic by BlackDemographics.com illustrates the power of business ownership. Although it contains US statistics, it is relevant to the UK and all other countries where Black people are a minority or are underprivileged. By investing more in Black businesses and business owners, whether that is with money or education, the Black community will be economically empowered. And crucially, the overall economy will improve.
MORE UK STATISTICS
Below are more UK statistics illustrating some of the challenges faced by the Black community. This is not to create sympathy. Rather, we use these statistics to shed light on how much work the Black community needs to do in order to level the playing field, as well as to encourage you to act now and become a change maker.
- During the 3rd Quarter of 2016, the unemployment rate for over 16’s was 5%. For Black African, Black Caribbean and Black British, this rate increases to 12%. This is more than double the unemployment rate of their White British contemporaries, which was 5%. (Source: ONS Annual Population Survey)
- The greatest disparity is among the 25-49 age group. Black people in this age group saw an unemployment rate of 10%, while White people in this age group had only 3% unemployment. (Source: ONS Annual Population Survey)
- The age group with the highest unemployment for Black people is the 16-24 group at 30%. Remember: this figure reflects the percentage of people who are actively looking for work, but are unable to find work. Students are not included in these figures. (Source: ONS Annual Population Survey)
- Between 2011 and 2014, temporary working increased by 25.4% for Black and ethnic minority employees. By Autumn 2014, around one in ten BME workers were employed in some form of temporary employment. (Source: Trade Union Congress, TUC)
- Black, Asian and ethnic minority university graduates are two and a half times more likely to be unemployed than their white peers, according to TUC. Research shows that although the overall unemployment rate for white graduates is 2.3%, this rises to 5.9% for BAME graduates. (Source: Trade Union Congress, TUC)
- In a 2009 study conducted by the National Centre for Social Research on behalf of the Department for Work and Pensions, it was found that people with names that sounded “white” needed to submit 9 job applications before landing an interview. But for ethnic minority applicants with non “white” sounding names, this figure rose to 16.
- A 2011 Census by the Race Equality Foundation suggests that Black African households are 75% more likely than white British households to suffer from ‘housing deprivation’. Indicators of this include overcrowding and an absence of central heating. (Source: Race Equality Foundation)
- This same census also suggests that home ownership was lowest among Black African and Arab groups (24% and 27% respectively). This is compared to more than 50% of Indian, White British, Pakistani, White Irish and Chinese people who live in a home owned outright or with a mortgage. (Source: Race Equality Foundation)
- The Runnymede Trust found that ethnic minority groups are more likely to experience homelessness. For example in 2014, in the East London borough of Redbridge, they found that black people made up 26% of homeless persons, despite making up 9% of the population. As a comparison, White people made up 24% of the homelessness population whilst making up 63.5% of Redbridge’s total population. (Source: The Runnymede Trust)
- “There is work to do by Government, the banking industry, business groups, mentors and others to ensure that those who are under-represented are given every opportunity to turn their ideas and aspirations into successful businesses. An important part of this is ensuring that they have the access to finance they need to set up in business.” (Department for Communities and Local Government, 2013 report)
- Evidence suggests that people from Black African, Black Caribbean, Bangladeshi and Pakistani minority groups are more likely to have their loan applications rejected than Indian and White businesses. (Department for Communities and Local Government, 2013 report)
- Ethnic minority business groups who commented as part of the review acknowledged that the issue of accessible and affordable finance is not one that is unique to ethnic minority businesses. However, they suggested that the problems faced by some ethnic minority businesses can be far more acute than those of White owned businesses. (Department for Communities and Local Government, 2013 report)
- The Ethnic Minority Employment Stakeholder Group’s believe that tackling the perception of discrimination and prejudice in accessing finance is critical. However, they suggested that this would not make a discernable improvement to the level of finance ethnic minority businesses access unless backed up with additional action aimed at increasing the confidence of ethnic minority businesses, and would-be entrepreneurs, to act upon their ideas and proposals for start-up and growth. (Department for Communities and Local Government, 2013 report)
MORE US STATISTICS
Below are more US statistics illustrating some of the challenges faced by the Black community.
- Although unemployment is falling, as of 2016 the unemployment rate for African-Americans (8.8%) was double that for White Americans (4.3%). It is also consistently higher than the overall US unemployment rate. (Source: Bureau of National Statistics)
- In 2015, African-Americans had the highest unemployment rate of any ethnic group at 8.3%, followed by Latinos (6.3 %), Whites (4.5%), and Asians (4.0%). (Source Economic Policy Institute, EPI)
- Data suggests that differences in education can’t fully explain this unemployment gap. According to research from the economist Valerie Wilson, the unemployment rate is consistently nearly twice as high for black Americans with the same level of education level as white Americans. (Source: Economic Policy Institute, EPI)
- “Before the recession, black-owned small businesses received 8.2% of all loan money through the Small Business Administration (SBA). That figure is now down to 1.7%, according to an analysis by the Wall Street Journal. The total volume of loans they are currently getting is similarly low: 2.3% of the roughly 54,000 doled out through the agency, down from 11% in 2008.” (Source: ThinkProgress.org)
- Of the $98.2 billion that the federal government awarded in contracts to small businesses in 2012, just 7.2% were owned by black people, despite being 13% of the population. (Source: Bloomberg News)