(The Root) — On Nov. 30, President Obama issued a proclamation to mark the 30th anniversary of Minority Enterprise Development Week. The proclamation reads in part:
The belief in tomorrow’s promise is guiding minority entrepreneurs across our country to start the kinds of businesses that make up the backbone of our economy.
The proclamation goes on to highlight the importance of minority entrepreneurs to the American economy and communities at large. One thing the proclamation does not specify is the importance of minority entrepreneurs to African-American communities, particularly when it comes to addressing one of the most daunting issues the Obama administration has struggled to address: African-American unemployment.
While the Obama campaign received a boost from a relatively positive jobs report released just before Election Day, not all Americans were celebrating. African-American unemployment rose from 13.4 percent in September to 14.3 percent in October while the jobless rate for black teens rose to 40.5 from 36.7 percent. The administration’s lack of progress on this issue has been a source of criticism and concern, even among some of his supporters, including Rep. Emanuel Cleaver (D-Mo.), outgoing chair of the Congressional Black Caucus, who shared his disappointment in a previous interview with The Root.
But while some have argued that the president needs to focus on improving the overall economy — which will then ultimately help all Americans, including black Americans, improve their opportunities for employment — one of the most potentially effective solutions has not received that much coverage. According to research, increasing the number of minority entrepreneurs has an automatic net positive effect on minority employment numbers. The reason? Minority employers are statistically more likely to hire other minorities.
To put in perspective just how important the issue of diversifying the employer pool is to diversifying the ranks of the employed, consider this. A Princeton study conducted just over five years ago found that white males who report a felony conviction on an employment application were nearly twice as likely to receive a callback for that job as a black applicant without a felony conviction. This means that just a year before our nation elected its first black president, being black was proved to be a significant barrier to even being interviewed for a job — not just hired for one.
According to Tarrus Richardson, CEO of IMB Development Corp., minority entrepreneurship plays a crucial role for African-American job seekers and the African-American community at large. “It creates jobs and institutional stability to our community. Research has shown that minority businesses are three times as likely to hire minorities as non-minority-owned businesses,” he said. “Statistics have shown minority-owned businesses are more likely to hire our own, buy from our own and support local institutions. It [minority entrepreneurship] is the fuel that helps build jobs, wealth and stronger institutions in our community.”
For this reason, Richardson left a lucrative career working in financial institutions for others, including stints at Gold Coast Securities and Salomon Smith Barney, to join the ranks of African-American entrepreneurs by launching IMB. The company’s core mission is to help increase the number of African-American entrepreneurs. “Those who have and can must be committed to building large minority-owned businesses,” Richardson said. “So we [he and his co-founders] decided to build a billion-dollar minority-owned business that we can all be proud of the next seven to 10 years, and that will help other minority businesses along the way.”
The work of Richardson and others could also prove helpful to the Obama administration as it seeks to finally address the issue of unemployment that has plagued one of the president’s most loyal constituencies, one that played a key role in his re-election: African Americans.