How Generational Wealth Impacts Minority Entrepreneurship
Barriers to generational wealth have plagued people of color for hundreds of years. According to Fast Company, citing a report from the Center for Global Policy Solutions, America is losing out on over 1.1 million minority-owned businesses due to discriminatory financing practices and a bias towards companies primarily operated by white males, noting that, “The first step toward solving venture capital’s diversity problem is investing in minority founders.”
Today, we would like to discuss how generational wealth impacts minority entrepreneurship and how organizations like the Eastern Minority Supplier Development Council (EMSDC) are tackling this ongoing issue.
Facts and Statistics
In a recent article titled, How Minority-Owned Businesses Can Close Racial Wealth Gaps and Rebuild the U.S. Economy, SCORE states that, “Minorities in the US face a range of factors and variables that limit their wealth development. When these are left unchecked, the gaps could spiral even further out of control and have a detrimental impact on the US economy as a whole, not just on minorities.” Here are some facts and statistics:
- “Minority business owners are the lifeblood of American society. Although this group only owns about 20 percent of all small businesses in the US, they contribute much-needed diversity to the business landscape.” (Entrepreneur)
- “Self-employment can help improve a family’s earnings, diversify its wealth base to non-personal assets, and patch shortfalls. However, the real issue is access to capital, which is significantly more difficult for minorities.” (SCORE)
- “In the United States, the average Black and Hispanic or Latino households earn about half as much as the average White household and own only about 15 to 20 percent as much net wealth.” (gov)
- “The fraction of children who earn more than their parents has declined sharply in America over the past half century primarily because of the growth in inequality.” (Harvard Gazette)
- “Families lacking generational wealth often must deal with societal inequities, such as lower homeownership rates, unequal access to higher education, identity discrimination, and a lack of social mobility. (Best Colleges)
- 40% of Black business owners do not apply for financing because they expect to be rejected. (NMSDC)
- Systematically excluded communities of color are up to twice as likely to have a mortgage application denied. (NMSDC)
The National Supplier Diversity Council (NMSDC) and regional affiliates across the US, including EMSDC, are working to stimulate and support economic development with minority-owned businesses (Asian, Black, Hispanic, and Native American). At EMSDC, our focus is to certify and connect MBEs in Pennsylvania, Southern New Jersey, and Delaware with member corporations committed to supplier diversity. We also provide opportunities for growth, including events and targeted programs that help facilitate success and bridge the generational wealth gap. According to the NMSDC 2021 Minority Business Economic Impact Report, “Certified minority businesses drive wealth creation for their owners, employees, and communities… triggering a ripple effect of economic activity through their supply chain.”
To learn more, visit nmsdc.org and emsdc.org.
The Eastern Minority Supplier Development Council (EMSDC), a 501(c) (3) non-profit organization, is an affiliate of the National Minority Supplier Development Council (NMSDC). We certify and connect minority-owned businesses (Asian, Black, Hispanic, and Native American) throughout Pennsylvania, Southern New Jersey, and Delaware with member corporations that want to purchase their products, services and solutions. Our mission is to stimulate and support the economic development of minority-owned businesses and to better align them with corporations in an effort to initiate growth and opportunity through Supplier Diversity channels.