By Steve Benen | PoliticoBlack owned businesses — businesses that are owned by people of color — are the main drivers of poverty and inequality in many black communities, according to a new report by the Economic Policy Institute.
The study found that black-owned businesses account for 30 percent of the total economy, and accounted for 26 percent of all the jobs lost in the past decade.
The report found that the black-run businesses account to a disproportionate amount of black-specific job losses because they employ fewer people of African descent.
They account for less than 1 percent of total jobs lost to automation, according the study, which used data from the Bureau of Labor Statistics.
But their disproportionate share of job losses also means that black owned companies are responsible for an estimated 40 percent of job loss in cities like Detroit, Baltimore, and Ferguson, Missouri.
The EPI report found, “Black-owned business closures, the destruction of their community, and the loss of their jobs are driving the displacement of black workers in black-dominated industries.”
According to the EPI, a black owned business is defined as a business that “is owned or controlled by a person of African American descent and has fewer than 10 employees.”
The study states that “more than 30 percent [of Black owned] businesses are owned or owned by black people,” and that more than 80 percent of Black owned companies reported having fewer than 100 employees.
The report further found that “in 2013, black owned small businesses experienced more job losses than their white counterparts, with African-American owned businesses accounting for more than a quarter of the small businesses that experienced a loss.”
The report also found that in 2013, Black owned business closures in black communities in particular resulted in more than half of all Black owned small business closures nationwide.
Black owned establishments that closed down during the economic downturn accounted for 28 percent of small business closings in the U.S., according to the study.
The EPI found that Black owned industries accounted for over $5 trillion in losses, according a separate report published by the Center for American Progress earlier this year.
Black owned small enterprises were also the primary drivers of the Great Recession.
According to the report, the black owned sector lost nearly one-third of its jobs in 2013 alone, with nearly one in five jobs lost due to the Great Depression.
According the report , Black owned enterprises are the biggest driver of the loss in jobs, and in many cases, were responsible for nearly one third of all jobs lost.
The Economic Policy institute released a report last year that found that white-owned small businesses accounted for almost half of the jobs in black and Hispanic communities.
The Economic Policy report found the same trend in 2013.
The study found the majority of the Black owned industry losses were concentrated in manufacturing and construction.
Black-owned industries account for 27 percent of manufacturing jobs lost nationwide, and 14 percent of construction jobs lost between 2000 and 2013.
According this report, black-controlled businesses account with more than one-quarter of all manufacturing jobs in the United States.
The black owned industries account to more than 1.4 million jobs, or one in four of all employed people.