Fact check: Has Black entrepreneurship hit a record during Joe Biden's presidency?
A campaign ad for President Joe Biden said: "The lowest Black unemployment rate in history. Black child poverty cut in half. Record numbers of new Black entrepreneurs. And over $130 billion in student debt forgiven."
Posted — UpdatedIn an ad timed for Black History Month, President Joe Biden touted gains Black Americans made during his tenure.
Data supports the claim that the prevalence of Black-owned small businesses has reached record levels under Biden, based on available data since 1989.
What the data shows
The growth from 2020 to 2021 represented the largest percentage increase — 14.3% — of any year since 2017.
The 2022 survey found that 11% of Black households held equity in a business, far higher than the previous record of 6.6% in 2016.
Black-owned businesses also grew faster in several categories than businesses owned by whites, Asian Americans, Latinos or Hispanics, and Native Americans did. Black-owned businesses had a 7% increase in employees, a 30% increase in revenue, and a 27% increase in payroll in 2021, the analysis by Brookings, a Washington, D.C.-based think tank, showed.
When contacted for comment, the White House shared independent analyses suggesting that some Biden policies helped spur these increases.
The path to full equity
Despite recent gains, Black business ownership continues to trail rates for white Americans.
In 2021, Black Americans represented 14.4% of the U.S. population but 2.7% of business owners. By contrast, white Americans accounted for 72.5% of the U.S. population while owning 82% of businesses. Asian Americans made up 6.3% of the population but owned 10.9% of businesses. Like Black Americans, Latinos and Native Americans also own a smaller share of businesses than their share of the population.
"Even if Black business ownership continued to grow at the rate it did in 2021 — the largest percentage increase since 2017 — Black-owned businesses would still not reach parity with their population share for another 80 years," Brookings wrote.
Meanwhile, sole proprietorships — businesses without employees other than their owners — comprise a disproportionately large share of Black-owned businesses. Brookings wrote that although sole proprietorships "are an important driver of economic growth and wealth creation," businesses with additional employees can grow even faster. The report says the high number of Black sole proprietorships stems partly from "unequal access to capital, networks, and government contracts."
PolitiFact ruling
A Biden campaign ad said that during his presidency, there have been "record numbers of new Black entrepreneurs."
Census Bureau and the Federal Reserve Board datasets found record levels of Black business ownership in 2021 and 2022. Independent analyses say that some of Biden’s policies likely played a role.
We rate the statement True.
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