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Abraham Lincoln’s Emancipation Proclamation in 1863 ending slavery in the Confederacy did not actually free many slaves, at least not right away. The Union border states of Delaware, Maryland, Kentucky, Missouri, and West Virginia were exempted from the Proclamation and continued enslaving African Americans through the entire Civil War, and Confederate states merely ignored it. Slave plantations in the South were physically liberated at immense cost, with many slaves emancipating themselves by fleeing north into Union territory. Juneteenth celebrates the Union Army’s liberation of 250,000 Black Americans on June 19, 1865, two years after Lincoln “emancipated” them. Americans today celebrate that date as the moment the last Black slaves became free Americans, but the Union border states did not free their slaves until the passing of the 13th Amendment in December 1865. Juneteenth celebrates the start of a new era of equality, opportunity, education, and even wealth creation for millions of people who were forced to work for free. Black people were finally allowed to pursue the American Dream in any state.
Over 150 Juneteenths later, a lot of things have changed radically for African Americans, but some have not changed as much as we would have liked in that time. In 1900, 1.3% of American doctors were Black – the figure rose to about 5.4% by 2018, a nearly four-fold increase that still does not represent the nation’s 12.8% Black population. In 1863, about 480,000 free Black Americans owned half of one percent of America’s wealth. Eight generations later, today’s Black community, comprising 12% of the people in a nation of 330 million, own less than 2% of the country’s wealth. In 2016, Black families owned 10 times less wealth than White families; during this time the median wealth of a White family was $171,000 compared to just $17,000 for Black families. A study by the Small Business Association suggests that of the business owners who identified their race on PPP loan applications, White-owned businesses received 83% of loans. Black-owned businesses, by comparison, received 2% of PPP loans.
There is a is a silver lining here that also marks how much progress we’ve made, even in the last century, because just over 70 years ago, many Americans were still actively divesting in any business or venture not involving White people. During the immediate post WW2 era, some American business owners hired German POWS over Black veterans. Some White Americans in that time had very few reservations about eating in the same restaurant with a former Nazi. Meanwhile, Civil Rights activist, Reverend and veteran Hosea Williams was almost beaten to death for using a “Whites only” water fountain – he was in his military uniform, a symbol of his dedication and belief in the American way, when he was attacked. Other Black veterans like Sgt. Joseph Maddox, who was accepted to Harvard following his military service, were denied tuition assistance from the GI bill “to avoid setting a precedent”, one of investing in our Black veterans and the communities they fought to protect. White communities benefitted from a housing boom while Black communities struggled, with redlining practices exacerbating the difficulties Black people faced purchasing one.
In 1955, following Rosa Parks’ arrest for daring to sit at the front of a bus, Black Americans in Alabama boycotted the Montgomery bus service, refusing to invest and help a racist system grow and enable its oppression of people of color. The leaders of the boycott simply demanded courteous bus drivers, seating on a first-come basis, and Black drivers on routes that served Black communities. However, the boycott, in the context of the larger civil rights movement, proved so effective that the Montgomery public system was fully integrated in under two years. The under-represented and underpaid Black people of the city flexed their economic muscles and gained more than they bargained for – a world where no one of any race or gender can ever be legally discriminated against on a public bus. This is just one example of how supporting Black businesses and communities can pay dividends for humanity. Since then, Black people have demonstrated time and again the economic might they possess, and how investing in their businesses and their communities can help every single American. The lesson for socially responsible businesses and investors alike is that they can play a role in making the ideals of Juneteenth a reality by flexing their own economic muscles to help create a world of racial economic inclusivity.
Research from Payscale suggests that when controlled for factors like job title, education, experience, and hours worked, Black men with equal qualifications to White men make 98 cents for each dollar a White man makes for the same level of work. When uncontrolled, their research suggests that Black men make about 87 cents for each dollar a white man earns. While the controlled result suggests that Black men only make just a cent less for the same work with equal qualifications, the uncontrolled result can be considered a closer estimation of the overall economic disparities between White and Black men. Black men are over-represented in lower paying jobs than White men. The accommodation and food service industries have some of the lowest-paying positions in the US but combined represent the third largest employer of black workers. While a Black Fortune 500 CEO might receive equal pay for equal work as White CEOs on the list, as of 2021, they are one of only 19 Black CEOS out of the 1,800 chiefs in the Fortune 500’s history. While some factors like occupational segregation based on racial and gender can explain the existence of some wage disparities, there shouldn’t be a reason for that gap to be greater than zero now, nearly 150 years after the first Juneteenth. While these figures almost seem like rounding errors on an individual level, the consequences for society could be immense. That financial loss could take the form of decreased worker productivity, increase in turnover, reputational harm, and a lower quality of lives for employees and the communities they create and sustain. Conversely, increasing diversity and financial inclusion and closing racial and economic gaps yields positive societal and economic returns that look like poverty reduction, better education standards, and a reduction in the gender wage gap.
Diversity and inclusivity training and hiring
Expanding diversity and inclusivity training and hiring can be an effective means of limiting human bias affecting Black Americans’ access to jobs and capital. Creating a work environment in which everyone feels represented and welcome can lead to greater employee retention, productivity, satisfaction, and brand awareness and community support. Likewise, creating a work environment where some people feel unwelcome or uncomfortable can cost businesses key talent and decrease profits. Everyday consumers and shoppers can help Black businesses expand their access to capital by directly supporting businesses owned by people of color while withholding their investment and support from businesses that don’t prioritize diversity and inclusion.
Removing humans from the equation entirely
Many Black borrowers who received aid from the CARES Act got their loan from a financial technology company, not a bank. The amount of PPP loan funding that Black-owned businesses received is disproportionately low compared to the amount that White-owned businesses received. The disparity appeared to be greater at smaller banks, while larger banks like Wells Fargo and Bank of America which used automated loan vetting systems dispensed funds with less bias. This digital solution to human bias, as great as it may sound, has some shortcomings. In some cases, racial bias can accidentally seep into the algorithms. Additionally, the digital solution still leaves the problem of human error largely unsolved for financial institutions that cannot afford the complex and expensive technology, and machines can still inadvertently enforce racial bias. Institutions like banks can create more opportunities for online loan applications to help limit in-person interactions that can create room for bias.
Using economic power to move the needle
How you shop, work, or invest, be it through supporting businesses who promote diversity and economic inclusivity, or withholding your money from those who harm society by perpetrating racial and economic disparities, can shape society for the better for countless people. The Path to 15|55 is a collaborative initiative designed to grow Black businesses and their communities. Their research suggests that if people invested just enough in only 15% of Black-owned businesses to make them capable of hiring any additional employee regardless of race or identity, the American economy could grow by $55 billion. That $55 billion could lead to a better quality of life for millions of people. It represents 55 billion steps closer to the ideals of Juneteenth, to making the dream that countless people have fought for a reality. In addition to performing research that highlights the societal benefits of empowering Black-owned businesses, the organization has pledged to invest $100 million directly and indirectly to Black businesses and the communities they serve, granting vital support for the training and funding Black-owned businesses need to thrive.
Juneteenth is a day when America celebrates its work toward the ideals of freedom and equality of opportunity. It is also a day when Black Americans celebrate the progress they have made. They’re finally paid for the work they do here in the United States, sometimes less than what they deserve, but far more than those enslaved souls at Galveston thought possible.
We have more Black American doctors and business owners, but they’re sometimes as hard to find as they were back in 1900. We have done much as a country to work toward equality for everyone, but more work still needs to be done in creating true equality of economic opportunity for Black communities.
This Juneteenth, remember that supporting Black-owned businesses and Black employees and their communities can help all of humanity. Think about the power you have to change the racial and wealth disparities in America and beyond just by helping one Black-owned business hire another employee. Think about how your support can help make the progress we envision this Juneteenth a reality.
Published June 17, 2022.
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About The Author
Jesse Opoku joins the Humankind team from an expert network, where he first developed an interest in Business Operations. Jesse holds a B.A. in Global Affairs from Yale University. Jesse is an avid birdwatcher, with vultures being his favorite species.