Vice President Kamala Harris’s multistate economic tour stopped in Michigan this month to tout the administration’s record for black Americans. The start of the tour coincided with National Small Business Week.
The Biden administration tries to hide it, but the economic numbers show that Bidenomics has handicapped black businesses.
Small enterprises are struggling with high costs, high interest rates and increased regulations, driving many black business owners to reconsider for whom to cast their vote this November.
One day before the vice president touched down in the battleground state of Georgia, a New York Times article detailed how black small business owners viewed the Biden administration’s efforts, and it wasn’t positive. Thirty-two-year-old Atlanta-based tech entrepreneur Kimberly Jolasun, pressed by high interest rates that tripled her monthly payments on credit used to start her business, said that she was ready to consider voting for a Republican candidate.
Owners of the nation’s 2.6 million black businesses are likely weighing whether a Biden or Trump policy agenda will improve the economy and their firms’ prospects. They don’t have to think back far.
From 2017 to 2020, the number of black businesses grew by 13.64%, eclipsing the 0.53% growth in all businesses during that time period. Those black-owned businesses grossed $141.1 billion in revenue in 2020 and employed 1.321 million people.
Black women did even better during Trump’s presidency. They started businesses at a rate of 18.14% between 2017 and 2020, outpacing the growth in women-owned businesses overall (9.06%) and black-owned businesses.
Black businesses rebounded from pandemic losses, but face a very different economic climate under President Biden. Business owners are aware of the pressures on their businesses and can connect the dots back to poor leadership.
In 2023, black-owned startups rated their financial situation as “poor” more than other demographic groups, according to Federal Reserve survey data. They were also most likely to have trouble paying operating expenses, gaining access to credit, and making payments on debt due to interest rates.
These economic realities help explain the erosion of support for President Biden among black voters. It’s a trend the Biden administration seeks to fix, though that will be a challenge. Wall Street Journal polling in six battleground states finds that, as of April, Biden is winning 68% of black voters, but he carried 91% of this demographic in 2020. President Trump has now garnered support from 30% of black men and 47% of Latino men.
The administration’s exaggerations of post-pandemic job creation gloss over the higher costs of living that force many Americans to take on multiple jobs to pay bills. More women than men work multiple jobs, according to Bureau of Labor Statistics data, and that number is rising each month.
Inflation, which touched off in mid-2021 after the American Rescue Plan was enacted and reached 40-year highs in June 2022, has affected all households, but the racial disparities are acute. According to the Federal Reserve Bank of New York, black and Hispanic households experienced “steadily higher price increases relative to the overall average between early 2021 and June 2022.” These groups spent larger shares of their budget on transportation, food, and shelter than other demographics — spending categories that have been hit worst by inflation.
While inflation disparities began to narrow as the consumer price index (CPI) rose at a slower pace in 2023, the recent acceleration in the CPI does not signal that black households or small businesses can expect to return to pre-pandemic inflation levels any time soon. High costs and high interest rates on mortgages and loans are weighing heavily on small enterprises.
Small business optimism sits at its lowest level since December 2012, according to the National Federation of Independent Business’s Optimism Index. Over a third of owners rank inflation as the single most important problem in operating their business. They are also grappling with weakening sales, unfilled positions and rising labor costs.
Add to this increased regulation, from overtime rules to energy policies that make doing business more costly, and new restrictions on franchising and independent contracting that heighten uncertainty and threaten small business models.
Entrepreneurs like 34-year-old Atlanta-area real estate entrepreneur, Ray Woods, recognize that “America has been built on capitalism,” and will support the policymaker who “understands business.” Given the past seven years, the Trump and Biden economic records speak for themselves.
