A roadmap to Black employee ownership
This racial wealth gap has been generations in the making. Our history of redlining and discriminatory practices has left too many Black people with too few opportunities to grow wealth, especially across generations. This remains a problem today. According to the US Census, more than 90% of all businesses with over 20 employees remain white-owned. Simply put: it’s nearly impossible to build wealth if one has been excluded from most ways to build it.
Also, almost 3 million businesses in the United States have owners at or near retirement age, many of whom have no plan for what will happen to the business when they retire. Almost one in four of these businesses are in the construction, manufacturing, wholesale trade and warehousing and transportation industries. These industries tend to have businesses with lower-wage workers and a significant percentage of workers of color. Helping companies in these industries can impact a critical mass of workers who would benefit most.
Employee ownership is good for business owners, workers and communities. It is a dynamic strategy that can help the Black business community build economic resilience and community wealth and reduce the racial wealth gap.
Black workers account for 15 million (12%) of the 125 million U.S. private-sector workers. Nearly 60% of our Black workforce lives in Southern states. 50% of Black workers are concentrated in three U.S. industries: healthcare, retail and accommodation and food service. Imagine transitioning the 30,000 Silver Tsunami businesses in Atlanta, which account for $163 billion in revenues, into employee-owned companies. This would result in over 430,000 workers becoming owners. The potential spillover effects to the Black community are enormous.
Partnership with Morehouse College
Alongside our partners at Morehouse College and other collaborators across the country, Project Equity seeks to integrate employee ownership into the Black wealth building agenda and unlock this powerful opportunity for wealth preservation for Black business owners. Together we will also bring wealth building opportunities and quality jobs to thousands of Black workers in the years ahead. Project Equity collaborated with Morehouse College to produce two groundbreaking studies that explore how employee ownership can close the racial wealth gap.
Employee Ownership for Black Workers: Closing the Racial Wealth Gap
Two undeniable facts make employee ownership a viable solution for closing the racial wealth gap: the wealth gap in America—and Atlanta in particular—is widening and steady, low-wage employment is failing to make a difference.
This study explores how traditional structures have contributed to the concentration of wealth in the hands of a few, and how employee ownership can help to democratize the economy and empower Black workers to build wealth and economic stability. Through a combination of case studies and analysis of existing research, Dr. Cynthia Hewitt, Ph.D. of Morehouse College, and Kyle K. Moore, Ph.D. of The New School, make a compelling case for the adoption of employee ownership models as a means of achieving greater economic equity and opportunity for Black workers.
Strategies to Advance Black Employee Ownership
Broad-based employee ownership sustains quality jobs and builds wealth for employees. It creates stronger and more profitable businesses, and preserves the legacy and wealth of small businesses in communities. Project Equity’s publication, Strategies to Advance Black Employee Ownership Employee Ownership offers strategies and practical considerations to advance Black employee ownership as a complement to the Morehouse College paper, Employee Ownership for Black Workers: Closing the Racial Wealth Gap. The paper suggests those strategies should focus on these goals:
- Preserving Black wealth for Black business owners through EO transitions
- Creating Black wealth by transitioning companies with significant Black workforces (regardless of ownership demographics) to employee ownership
- Helping Black-owned micro businesses grow so those that want to consider EO will be ready
- Investing in long-term, high-touch development approaches for startup cooperatives
About the Black Employee Ownership Initiative
Project Equity’s Black Employee Ownership Initiative (BEOI) integrates across our programs to ensure that all of our services reach Black workers and Black business owners. These efforts include work to expand the available data about Black entrepreneurship and workforce density. The initiative is forming critical partnerships with organizations that have deep roots in localities and communities with significant Black workforces. It is also developing strategies to advance Black EO and to add employee ownership to the Black wealth building agenda.
Project Equity is working toward lasting impact through its partnerships in Atlanta.
By the numbers
- Nearly 30,000 businesses are over 20 years old. They account for $163 billion in revenue.
- These businesses employ almost 430,000 workers.
- In addition, one-third of the workforce in Metro Atlanta is Black.
Project Equity is working toward lasting impact through its partnerships in South Florida.
- Over 20,140 businesses are more than 20 years old. They account for $70 billion in revenue.
- These businesses employ over 242,000 workers.
- 17% of the workforce in Miami-Dade County is Black.
In the news
We would like to extend our gratitude to our collaborators for their partnership and support in this endeavor.
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