Business
More African-American entrepreneurs required to help reduce erosion of the Black middle class
Entrepreneur, John H Johnson., Founder of Ebony and Jet Magazines. PHOTO/File
As a young black man graduating from the College of the Holy Cross 40 years ago, Ted Wells felt his generation had reason to hope racial barriers to economic advancement would disappear. In many ways he was right. Wells went on to earn both an MBA and a law degree from Harvard before becoming one of the country’s top trial lawyers.
His Holy Cross hallmates included Pulitzer Prize-winning author Edward P. Jones and Supreme Court Justice Clarence Thomas. American Express chief Kenneth Chenault and Ken Frazier of Merck are law school friends; his wife, Nina, served as New Jersey’s secretary of state.
Yet Wells now sees an economy where obstacles to a middle-class life for many black families are still daunting. “This recession has had a terrible hit, especially on the middle and lower class,” says Wells, now a partner at Paul, Weiss, Rifkind, Wharton & Garrison in New York. “But we’re less willing to talk about economic problems as issues of race.”
When the U.S. Census Bureau last surveyed the landscape in 2007, African Americans owned 1.9 million businesses, about 7 percent of the total. While that was a 60 percent increase from five years earlier, the average revenue at those businesses had decreased 3 percent since 2002, to US$72,000 a year, vs. an average of US$490,000 at those owned by whites. And that was before the recession wreaked havoc on the black middle class. Median wealth in black households fell 53 percent between 2004 and 2009, to US$5,677, according to the Pew Research Center.