Spending in a Time of Protest

Spending in a Time of Protest

June 4, 2020 • by Robert Jones


Spending in a Time of Protest

Spending in a Time of Protest 1920 1080 Robert Jones

I can’t jump.

I’m referencing the famous movie title to acknowledge that I’m a white man, and this moment that we’re all living through is not about me.

At the same time, it’s a moment that we’re all living through, and whatever the world looks like on the other side is something that we’ll all have to live with.

So the question is: What kind of world do we want?

Cause Consumer is all about the power of consumer spending to create positive change, and there’s no doubt that a more just and peaceful world would be a very positive change, indeed.

That’s a big, ambitious, complicated goal, and it’s hard to see how individual shopping choices could have any impact at all on controversial issues like mass incarceration or implicit bias.

But individual shopping choices have everything to do with another root cause of the unrest we’re seeing today: a lack of economic opportunity. Entrepreneurship has always been the way for smart, ambitious Americans to get ahead, become independent, and build generational wealth for their families.

At least, that’s the case for smart, ambitious, white Americans.

Would-be black entrepreneurs — no matter how brainy or brazen — face major obstacles in launching and sustaining a business of their own. Startup capital is the most obvious issue. More than two-thirds of entrepreneurs start their business with personal savings, while more than 20 percent rely on family money, according to the Marion Ewing Kauffman Foundation.

The problem is that median wealth in white households is about 13 times higher than black households, making it much harder for black entrepreneurs to scrape together the cash that lets them act on their dreams.

And even when they do manage to launch, black-owned businesses are often under-capitalized, which increases the risk of failure. In fact, according to Census data analyzed by the Kauffman Foundation, among businesses that started with at least $100,000 in capital, only 1 percent are black-owned while 82 percent are white-owned.

Representation Matters

A lack of entrepreneurial role models is another barrier for black business owners, according to experts. Studies show that people who know successful entrepreneurs are more likely to become entrepreneurs themselves, and a majority of small business owners have a family member who was self-employed.

The Kauffman Foundation puts it like this: “Previous low rates of entrepreneurship among people of color can impact future rates of entrepreneurship.”

Charlie McCoy understands that one a personal level. “You really are the summation of the top five or ten people around you,” says the founder of Artisan Barber in New York City. “If you don’t have access to people who have the knowledge that you need to traverse the waters of entrepreneurship, it’s going to be difficult for you.”

Today Charlie has two Manhattan locations of his bustling barber-shop-cum-art-gallery, along with his own line of men’s grooming products for hair, skin, and beard. But he largely had to find his own way – with plenty of mistakes along the way – because “I just didn’t have the information when I needed to have the information.”

What happens when a black entrepreneur like Charlie overcomes all the obstacles and launches a business that thrives? First, there are the intangibles. “I’m trying to foster that atmosphere of acceptance and respect that I feel that are lacking in different parts of our world,” Charlie says.

“I’m always trying to represent myself — and people who look like me and people who know me — in a way that garners respect. I think people see that when they come into my businesses.”

Prosperity for All

On the more quantitative side, successful black-owned businesses mean greater prosperity for all.

Charlies has doubled his payroll recently — hiring that cuts across racial and ethnic lines. He says that he would like “race and background and sex not to be an issue” in hiring. Instead, he looks for “the intangibles that make you a great human being … that’s the acceptance I want, so that’s the acceptance that I, as a business owner, provide.”

Charlie’s story is the kind of anecdotal evidence that bears out the academic models. One MIT study suggests that if minority-owned businesses grew by just 10 percent, the result would be more than 1 million new jobs for people of color — and more than 2 million jobs overall.

More jobs mean more choices, more power, more sense of autonomy. Employment status affects health, education levels, and life expectancy. It’s a classic virtuous cycle – and it all starts with spending choices.

Spending is a numbers game, and success often depends on the size of the market. Black consumers are an economic powerhouse in their own right, with about $1.2 trillion in annual spending, but they make up just 13 percent of the population.

Greater success means reaching a larger market, and that’s where Cause Consumers come in. If the remaining 87 percent of the population would make the intentional choice to seek out and support just one black-owned business each month, the impact would be enormous.

Looking for a cake, a book, a pair of shoes, or a flower arrangement? Get outside your neighborhood comfort zone, if necessary, and support a black entrepreneur. This kind of walk-in spending is especially helpful because about 48 percent of the money you spend at a local business re-circulates within the community, compared to about 14 percent of the money spent in chain stores.

Finding those local businesses isn’t always easy, unfortunately. Some bigger cities have an online BlackPages directory that’s searchable by product or business type. In other locations, a Google search like “black-owned businesses” plus your city name should do the trick.

Online ordering is another way to find unique products offered by black entrepreneurs that might not be available in your hometown. Want to try wild tobacco hand lotion or maybe a handmade shampoo and shave bar? They’re both available from the Artisan Barber online store. Ready to save the planet and pamper your backside with bamboo toilet paper? Look no further than our friends at Reel Paper – one of the very first companies we ever profiled.

There’s no shortage of examples, and we’re committed to bringing you more of those stories, because our mission is to inspire the kind of spending decisions that can help to make the world a better place.

Wherever you stand on specific policy solutions, supporting black-owned business is a simple, personal way to show that you’re listening to the frustrations voiced by your fellow humans – and that you care.

***

If you know of a black social entrepreneur with a great product and a give-back business model, please tell us in the comments below or shoot us an email. Our thanks to Elisha J. Stewart for additional reporting on this story.

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Cause: Community • Format: In Depth
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