Tuesday, August 30, 2011

Striving Against the Persistence of Segregation

By Ranada Robinson, Senior Research Associate.

When my parents were growing up in Jackson, MS, they lived in the era of Jim Crow, where across the South the law mandated racial segregation. The set of laws was said to be intended to keep African Americans “separate but equal,” but while people like my grandparents and parents were separated from whites, they were not treated equally, suffering through yet thriving despite many educational, economic, and social disadvantages. Fast forward to today—in an age where we’ve elected our first African American president, where the Martin Luther King, Jr. National Memorial (the first memorial for an African American on or near the National Mall) has been constructed, and where many other achievements have been made by African Americans—how far have we come as a nation?

In March 2011, John Logan of Brown University and Brian Stults of Florida State University, representing the US2010 Project, published The Persistence of Segregation in the Metropolis: New Findings from the 2010 Census. The report uses census tract-level data to examine how historic patterns of segregation are changing. Among the findings are that racial segregation has been declining slowly but steadily since 1980. While this blog post won’t delve into neighborhood diversity, the report found that minorities (specifically African American, Hispanic, and Asian) have not often gained access to primarily white neighborhoods.

The following table lists the 20 metro areas with the largest black populations in 2010 with the highest levels of black-white segregation. A score greater than 60 is deemed very high—this means that 60% of either racial group has to move to different census tracts in order for the metro area to be equally racially dispersed.

My hometown of Jackson ranks 31st, with a score of 55.8, down from 68.6 in 1980, 62.4 in 1990, and 57.4 in 2000. Atlanta, home of Market Street, ranks 24th, with a score of 58.3, down from 76.9 in 1980, 66.3 in 1990, and 63.9 in 2000

So why does this matter? What does this have to do with economic development? As Mac Holladay, our CEO, and Ellen Cutter, our Director of Research said in their article entitled “How Diversity Fosters Economic Success” featured in ACCE Magazine, “As our communities reflect the growing diversity of the workforce, we cannot afford to leave any group behind.”

According to the U.S. Department of Commerce Minority Business Development Agency, which tracks business growth by a variety of ethnic groups and gender, 21.3 percent of all firms in the nation in 2007, or 5.8 million, were minority-owned. These firms earned gross receipts of $1 trillion, only a fraction of the $30 trillion nationwide. Nearly 2 million firms were African American-owned, earning $137.5 billion in 2007. In 2009, minorities had purchasing power of $2.46 trillion, and African Americans alone had buying power of $910.4 billion, larger than the estimated buying power of all but 16 countries worldwide. Between 2002 and 2007, African American-owned firms outpaced the growth of non-minority firms in gross receipts (55%, African American growth vs. 21% non-minority growth), number of firms (61% vs. 9%), and employment (22% vs. 0.03%). Between 2002 and 2007, African American-owned firms created over 921,000 jobs. 

Research has shown that there are still disparities in opportunities available for minority-owned businesses, especially higher cost of capital which presents an additional burden. Minority-owned businesses have an impact on the entire economy, and they have the potential to make greater waves with greater opportunity. Thus, it is imperative for communities to understand the value in ensuring that minority-owned businesses are reached and supported—that good ideas are fostered no matter who the idea belongs to. We’ve come a long way as a country without a doubt, and we still have a ways to go. Communities are stronger when they embrace the diversity within, being mindful that each of us contribute to the overall prosperity of us all. As Aristotle said, “The whole is more than the sum of its parts.”