America’s population of racial and ethnic minorities is growing faster than ever. This growth is poising nonwhite Americans to be an increasingly large force in the U.S. economy. But how does North Carolina stand with the number of minority-owned businesses compared to other areas?
The results of the most recent Census showed divergent population trends for America’s white and nonwhite populations. Yes, white Americans still represent a majority of the population. Though the number of Americans identifying as white alone declined by 8.6% from 2010 to 2020. In contrast, every other racial group saw increases in population over the same period. And this rapid growth is poised to continue. Estimates project that the U.S. will become “majority-minority” by the end of the 2040s.
Racial and ethnic minorities are playing a greater role in the economy as America’s nonwhite population grows. Minority business enterprises have accounted for more than half of the new businesses created in the U.S. over the last decade. This has led to the creation of 4.7 million jobs in the process.
But minority entrepreneurs still face numerous barriers to success. Minorities have a more difficult time obtaining capital from external investors or lenders. Which limits their ability to start and grow businesses. Minority owners are also less likely to have access to mentors and professional networks that can advise them effectively on business decisions. In addition to these structural barriers, the COVID-19 pandemic was also particularly hard on minority-owned businesses. Minority-owned enterprises were more likely to face financial challenges, have decreased sales, reduce their operations, and have limited access to credit and federal relief funds.
Nearly four out of five employer firms in the U.S. are owned by people identifying as non-Hispanic white, while only 19% of businesses are owned by minorities. However, the total share of minority-owned businesses does not capture the full picture of minority underrepresentation among business owners. White Americans own 77% of businesses despite only representing 60% of the population. In contrast, other groups own a disproportionately low share of businesses. Hispanic individuals represent over 18% of the U.S. total with only 6% of businesses being Hispanic-owned, while Black Americans are over 12% of the population but 2.3% of businesses are Black-owned.
Read the full study on Smartest Dollar
Here are the large U.S. metropolitan areas with the most minority business owners: