Understanding Black Wall Street
Black Wall Street has a special place in American history that demonstrated that Black communities and Black-owned businesses could thrive economically. Recent history documents a time when Black men and women were not allowed to own property, faced violence, and many social and economic restrictions, and endured many forms of racial segregation and race-based legislation. Despite this, a sense of community and faith existed and flourished among Black neighborhoods. Black people gave each other a place for community, safety, and economic support. Across the country driven by “Jim Crow” or strict racial segregation, Black communities were thriving economically across the country. Black Wall Street, located in the Greenwood neighborhood of Tulsa, Oklahoma was the perfect example of this Black economic empowerment resulting from cooperative economics.
Black Wall Street was a thriving community in Greenwood in the early 1900s. This was a community that had bustling Black-owned businesses, theaters, schools, social health, and a strong distribution of wealth among its middle and upper classes. It is estimated that the community had more than 10,000 African American residents, and most of them were thriving socially and economically. Black Wall Street was the epitome of a self-sustaining economically empowered Black community. Black people supported each other, which allowed for easier access to resources, savings, housing, jobs, education, and health. It is imperative to understand that Black Wall Street was just one of many economically thriving Black communities in the United States.
The residents of Black Wall Street owned their homes and over 40 acres of land was purchased and sold only to Black people to increase homeownership. Today the Black dollar remains in the Black community only a dismal 6 hours, but in Black Wall Street neighborhood it spent months circulating and building wealth for the Black community.
Jim Crow and Black Entrepreneurship
“Jim Crow” laws were first enacted in the 1880s by angry and resentful Southern whites against freed Blacks these laws separated blacks from whites in all aspects of daily life. Favoring whites and repressing Blacks, these laws became an institutionalized form of inequality. In the Plessy v. Ferguson case of 1896, the U.S. Supreme Court ruled that states had the legal power to require segregation between blacks and whites. Jim Crow laws existed across the South and in the North and Midwest, segregation became equally entrenched through informal customs and practices.
The Black church, self-help organizations, and men’s and women’s clubs offered refuge, support, and protection, while the National Association for the Advancement of Colored People (NAACP) provided potential legal assistance. But out of the demeaning, social, political, and economic degradation of Jim Crow arose the opportunity for Blacks to establish their own businesses. The more cut off that black communities became from white communities and the more that white businessmen refused to cater to Black customers, the more possible it became for enterprising Black entrepreneurs to create viable businesses of their own.
Most of these businesses were local, small-scale, and family-run. Many black entrepreneurs followed the tenets of Booker T. Washington, who had established the National Business League in 1900 to promote economic self-help. The Jim Crow Era provided the impetus for a number of Black businesses to grow and flourish, instilling a sense of pride within Black communities, serving as symbols of racial progress, and promising safe places to do business and socialize. The conversation and ideas that flowed freely in black business establishments also helped raise consciousness and establish a sense of solidarity within Black neighborhoods.
When the Civil Rights movement gained momentum offering an end to the indignities and disenfranchisement of Jim Crow, many black entrepreneurs did what they could to support the movement financially. After the Civil Rights Act passed in 1964, and segregation was declared illegal, Black entrepreneurs could take pride in the role they had played in the Civil Rights movement despite the fact that the future viability of their segregated businesses were now in jeopardy.
Black communities are the only communities in America where other ethnic groups can set up business and thrive economically. Out of the $1.3 in Black Purchasing power only 2% goes to Black businesses. If middle class Black families, families making $75,000 or more, would increase spending at Black owned business from 2% to 10% Black businesses could create 1 million new jobs. Using our collective economic power to make social change through community capital, crowd investing, banking Black, and supporting Black Businesses.
Nielsen and Essence estimates that Black buying power will reach $1.3 trillion in 2019, yet only 2 percent of that money is spent at black-owned businesses. According to A new report from the Institute of Policy Studies indicates a bleak future for the wealth of Black Americans. Yet Blacks spend less money in black-owned businesses than other racial and ethnic groups spend in businesses owned by members of their groups, including Hispanics and Asians. According to Dr. Amos N. Wilson the longest boycott in history has been the Black communities boycott of Black owned businesses.
African-Americans are 12 percent of the U.S. population and, only 2 percent of SBA loan volume and less than 1 percent of VC funding goes to African-American entrepreneurs. If we want to get entrepreneurial activity going again in Black America, we have to enhance microbusinesses’ access to expertise and insights in innovation, management and technical talent, market intelligence, policy and regulatory affairs, business development, and marketing and brand-building.