Month after the month we wait for news on the jobless rate. We wait to hear that the recession is over and done with so people can get back to work. We wait to hear that the values of our homes have at least bounced back to break even. We wait for companies to add more jobs. The reality may be that the middle class needs to wait on itself. The majority of wealth in this country is held by 1%, we’ve heard this statistic. If the 1% holds on to their wealth it will continue to squeeze the middle class as home values drop and the jobless rate increases. This is why some experts feel entrepreneurship is the only way to save the middle class.
I want to discuss the reality of the 1%. These are not mega-rich millionaires spending their weekends on their lavish yachts. Many people included in the 1% are professionals such as lawyers, doctors, etc. who make a comfortable living but well below millions of dollars a year. People with salaries in the range of $250,000 were included in that demographic. Granted this is still far above the average salary in America, but these are working households, many of whom were impacted by the recession.
This country was built on the ingenuity of innovators and entrepreneurs who went on to employ others. The auto industry is one of the greatest stories told on American soil. The tech boom has employed millions over the past two decades. It’s easy to forget that large companies who employ tens of thousands of people once started off with two or three. We gravitate toward the security we perceive within large companies, but they are often the first to layoff and the last to hire. Small business employs the most people and adds the most jobs in an economy. Starting your own business contributes to saving the middle class by first saving your household. As your business grows you create jobs and your employees spend money.
What role do African Americans, specifically women, play in this landscape? The country needs more black entrepreneurs and women are off to a great start. Black and Hispanic women are the fastest growing segment according to the Center for Women’s Business research at the rates of 133.3% and 191.4% respectively from 1997 to 2007. Combined they represent more than two million of the roughly eight million women-owned businesses in the country and more than $14 billion in gross receipts. Further, African American and Hispanic women are three to five times more likely to start a business than their white counterparts. The biggest challenge hasn’t been ingenuity it has been financial and the social capital required to build businesses. Sisters are doing it for themselves.
Before you open your mouth to say entrepreneurs beget entrepreneurs, rich begets rich a study conducted by The Kauffman Foundation, “The Anatomy of an Entrepreneur: Family Background and Motivation” in July 2009 says that 72% of entrepreneurs came from middle class backgrounds and another 22% came from upper lower-class backgrounds (blue collar workers). The unemployment rate during the recession disproportionately effected the African-American community. Securing your own income by building it will help secure the nation.
The odds are in your favor. What’s stopping you? If you need inspiration pop on over to Black Chicks That Rule featuring 11 year-old entrepreneur Asia Newson.
REAL TALK | REAL THINGS | REAL RESULTS