Lessons from Oregon: Let’s Support the Minority and Women Owned Businesses That Drive our Economy
Whenever I tell people I grew up in Portland, Oregon, I usually get a response along the lines of: “Wait, isn’t that place super white?” To which I often respond, “Yes, it is super white.” Portland, a modern-day bastion of progressivism, is the whitest major city in the United States. In a population of 630,000 people, three out of every four people are white. Portland’s Black population is slightly more than five and a half percent and its Asian population is almost eight percent, according to the 2013–2017 American Community Survey Five-Year Estimates.
I was born in Kingston, Jamaica and moved to Portland in 2001. An odd move indeed since there are precious few Jamaicans on the West Coast and even less in Oregon. But, in 1998, my father and stepmother met in Jamaica during my mother’s volunteer service in the Peace Corps and, three years later, my father, sister, and I took a one-way trip to the City of Roses. Portland, also known for such things as hosting the annual World Naked Bike Ride and having more microbreweries than anywhere in the world has recently been named the best food city in the U.S., ahead of major cities like New York and Miami. However, one cuisine for which you’ll be hard-pressed to find good, authentic options is Jamaican food. Even staple ingredients, such as scotch bonnet pepper or jerk seasoning, can be hard to find.
In 2013, my father, a Jamaican immigrant and my stepmother, whose family came to the U.S. as refugees of the Vietnam War, opened their first business. After years of perfecting their own jerk rub, my parents opened FiMi Kingston LLC, bringing Jamaican jerk spice to the supermarket shelves of the Pacific Northwest. You may know by now that immigrants are the drivers of the U.S.’s entrepreneurial ecosystem. In 2016, during any given month, immigrants were nearly twice as likely to start a business compared to the U.S. born population. The rate of entrepreneurship for immigrants is around 11.5%, compared to 9% for the U.S. born population. People who come to this country as refugees have an even higher rate of entrepreneurship — 13%.
My parents are great cooks. After six years of building their first business, doing tastings at events across the city and building relationships with local markets, they opened a food cart, FiMi Kingston Jamaican Jerk Shack, realizing a long-time dream of cooking delicious Jamaican food for the people of Portland.
Starting a business, let alone two, is really hard, especially for immigrants and people of color. Major disparities exist in how the financial ecosystem serves business owners of color and white business owners. Most minority-business owners do not have the personal and professional networks to attract angel investors or venture capital and they often face numerous barriers to accessing the capital needed to start and grow their businesses. They are more likely to be denied business loans and to be charged higher interest rates for the smaller loans they do receive. According to the results of the 2018 Small Business Credit Survey, Black-, Asian-, and Hispanic-owned firms are nearly twice as likely as white-owned firms to forgo applying for financing because they believe they won’t be approved.
In February, the Oregon State Legislature held the first hearing on House Bill 4033, which, if it had passed, would have done three things: (1) create a lone reserve for lenders across the state so they can issue capital to entrepreneurs who may not qualify for traditional loan products; (2) conduct basic quantitative and qualitative research on the needs of women, people of color, veteran, and rural entrepreneurs; and (3) support existing technical assistance that are focused on underserved entrepreneurs. Small businesses drive economic growth in Portland and in communities across the country, but resources to support their health and growth are steadily dwindling. This presents a huge challenge, especially for entrepreneurs of color who already contend with fewer resources. In just the last 10 years, Small Business Administration (SBA)-backed loans to black-owned business dropped 96%.
Over the years, traditional programs, like those created by Business Oregon, the state’s economic development agency, have failed to reach women and people of color. House Bill 4033 was created through conversations between elected officials and small business owners to reach a solution that really works, and supported by a broad coalition of community lenders, economic development, and entrepreneur support organizations. It failed in committee in March 2020. House Bill 4033 presented an opportunity for the State of Oregon to lead in supporting entrepreneurship and small business growth, especially for women and people of color, who are the least supported.
In the land of opportunity, entrepreneurship is the American Dream. According to the Minority Business Development Agency, the “potential for growth among minority-owned businesses is largely untapped.” As the U.S. continues to become more racially diverse and minorities become the majority, it is essential that our elected officials take the necessary steps to ensure that entrepreneurs of color have equal access to the capital and training needed to grow their businesses and contribute to the growth of the economy. Legislation like House Bill 4033 would have been a crucial first step.
As small businesses around the nation, especially minority-and women-owned enterprises (MWBEs), are reeling from the impacts of COVID-19, it is worth recalling that although MWBEs were less likely to survive the Great Recession, they had a huge part in the nation’s recovery. Between 2007 and 2012, MWBEs added 1.8 million jobs nationwide, while firms owned by white men and women lost 1.6 million jobs.
COVID-19 cases and deaths have been highest among the nation’s Black, Indigenous, and People of Color (BIPOC) communities and the crisis will likely have a disproportionate impact on MWBEs. Newly created programs, like the much-lauded CARES Act Paycheck Protection Program, continue to disadvantage MWBEs. It is high time that our local, state, and federal governments deeply invest in the business owners of color that continue to drive our economy. Despite its failure, legislation like House Bill 4033, provides an example of the type of targeted, stakeholder driven proposals needed to give MWBEs the capital and technical assistance they need to grow and reinvigorate the economy.
