Minority entrepreneurs light the way
Minority entrepreneurs light the way
It’s hard to imagine a world without light bulbs. Yet almost 150 years ago, when Lewis Latimer was born in Chelsea to two runaway slaves, streets and homes were lit with gas or candles.
Working for a small business that hoped to challenge Thomas Edison’s dominance, Latimer devised a way of encasing the carbon filament of a light bulb within a cardboard envelope, which greatly improved the lifespan of Edison’s original design. Lewis Latimer is widely credited with making electric lighting practical and affordable, and his inventions have truly changed the course of history.
Our state has always been on the leading edge of technological innovations, but our country’s greatness is due in large part to the diversity of small businesses that turn ideas into reality everyday. While we celebrate the accomplishments of great African Americans this month, we also must take note that there is more Washington must do to encourage the Lewis Latimers of the 21st century.
When it comes to minority-owned small businesses, the facts are stark. Here in Massachusetts, African Americans make up 7 percent of the population but own only 2.3 percent of businesses — far below the national average of 5.2 percent. Nationwide, minority-owned firms make significantly less than their non-minority counterparts. The average gross receipts of minority firms is $162,000 — considerably lower than the $448,000 average gross receipts of non-minority firms. It’s just plain unacceptable that in this country, an average white family’s net worth is $67,000 but an average African American family’s is only $6,100.
For the last seven years, we’ve had an administration that has put underserved communities on the back burner. In 1953, the federal government set up the Small Business Administration (SBA) to provide loans to qualified individuals who otherwise couldn’t obtain money to start a business. Part of the SBA’s mission is to reach out to more minorities and women, encouraging entrepreneurship as a way to help bridge the wealth gap in this country. But the Bush administration has starved this agency of resources, putting up more barriers for minorities and women hoping to live the American dream. The president’s proposed budget for next year is no exception.
For example, since President Bush took office, the number of loans to African American small business owners in Massachusetts has increased, but the total amount loaned is down — they only received about $4.5 million last year. Nationally, the numbers are just as bad. Since 2001, the average loan nationwide to African Americans has plunged from $181,000 to $85,000. Yet the administration has proposed an actual cut for the SBA’s core programs, raised rates on small business loans, and done almost nothing to fund programs to reach more African Americans and other minorities.
As small businesses face tightening credit markets, Washington must act to make sure that minority entrepreneurs have access to the tools they need to grow their business. I’ve introduced the Small Business Lending Stimulus Act to provide almost $200 million to cut loan fees and increase funding for microloans, which proportionally serve more minorities than traditional loans. By cutting fees, we can make loans more affordable and encourage banks to extend credit to a larger number of small business owners who in turn hire workers and boost our economy.
I’ve also introduced legislation to improve all of the SBA’s loan programs, including strengthening the microloan program. The bipartisan bill would create an Office of Minority Small Business Development within the agency — to create a 24/7 advocate for minority entrepreneurs just like we have for women and veterans.
But to nurture the next generation of Lewis Latimers, we need to think even more broadly. One of the basic building blocks to foster entrepreneurship is education. I’ve introduced legislation to give grants to historically black colleges and universities (HBCUs) and other minority-serving institutions to help train the entrepreneurs of the future. This program will help target students in highly skilled fields — like engineering, manufacturing, science and technology, and financial and legal services — and guide them towards starting a business as a career path.
Many of our colleges and universities still lack access to high-speed Internet and other technological advances critical to enhancing students’ skills and employability. That’s why I’ve cosponsored the Minority Serving Institution Digital and Wireless Technology Opportunity Act to authorize $250 million in federal grants for HBCUs to upgrade their technology.
More African Americans than ever before are entering the middle class. In fact, over the last 10 years, minority business enterprises accounted for over 50 percent of the 2 million new businesses started in the United States, crossing every industrial sector from financial services and health care to construction and transportation. Today, there are more than 4 million minority-owned companies in the country with annual sales totaling $694 billion. That is good news, but there is still a long way to go to make sure that Lewis Latimer’s innovative spirit is nurtured in the entrepreneurs of the future. A world without his legacy would be very dark indeed.
Sen. John F. Kerry is the chairman of the Senate Committee on Small Business and Entrepreneurship.