Financial Activism: Why consumers should support Black-owned businesses

By Annie Smith

In the wake of the Black Lives Matter movement, activism has been encouraged in a number of ways, whether it be physical protests, signing protests for justice, or donating to bail-out funds. However, one method not typically seen in protests has been the rise in encouraging support for Black-owned businesses, creating a new tactic to fight against injustice: financial activism.

If you have been on the Internet in the last month, you have likely seen articles and social media posts raising awareness of Black-owned businesses, whether it be from individuals or companies. Databases like WeBuyBlack and eatOkra have emerged to centralise these resources based on categories, Bank Black encourages the investment in Black-owned funds and businesses, and the newly-launched My Black Receipt campaign encourages consumers to spend $5 million at Black-owned businesses by July 6.

However, it’s not only these grassroots movements that are encouraging consumers to shop at local Black-owned businesses. The culinary publication Bon Appetit has curated a list of Black-owned restaurants across the country, and Etsy, an e-commerce website with a focus on independent sellers and handmade goods, is showcasing its Black sellers. The ‘fifteen percent pledge’ campaign also calls on major retailers to commit a minimum of 15% of their shelf to Black-owned businesses, as Black people make up nearly 15% of the US population.

So why is the Black community encouraging financial activism, and could it have a greater impact than other methods of protest?

While activism through voting can see greater long-term affects, this policy change does not happen overnight. Furthermore, Tech Crunch notes that much of the structural racial disparity in the United States is economic. Black Americans are far more likely to be unemployed, especially during the pandemic, Black workers are vastly overrepresented in low-paying jobs, and Black businesses themselves are at an economical disadvantage compared to their white counterparts. 

An overwhelming 40% of Black-owned businesses have shut down because of the pandemic, and even in normal financial circumstances, a study from Stanford University found that only 1% of Black-owned businesses receive loans in their first year, seven times lower than that of white businesses. 

Furthermore, a report from Business Insider in February found that only four of the current Fortune 500 CEOs are Black, and none of those four are Black women, who face more barriers than Black men. In 2018, Black women earned on average 61 cents for every dollar earned by white men, or $23,653 less in total earnings in just one year, and women of colour are more likely than any other group to experience workplace harassment.

By supporting Black-owned businesses, consumers can begin to affect the structural racism present in the economy. Tayo Giwa, the figure behind the team Black-Owned Brooklyn, highlighting Black-owned businesses in New York City, told Mashable, “Supporting Black businesses also means supporting Black communities, as they are usually more than just places that offer goods and services. They are community spaces for meeting and connection. They are cultural hubs and platforms for local artists. They provide programs and resources that the community needs. Especially given these multifunctional roles, strengthening Black businesses helps strengthen our communities.”

In capitalist societies, financial activism encourages consumers to put their money where their mouth is, and can constitute effective change. In order to reverse the policies that disadvantage the Black community and change the troubling statistics, we as participants in the economy cannot solely rely on politicians to take action. As much of the disparity stems from Black-owned businesses being beaten by big-name retailers such as Amazon, it is up to us as consumers to change how we shop.

For readers wanting to support Black-owned businesses, Official Black Wall Street is a comprehensive directory for retailers and services in the United States, and The Black Book is a similar counterpart for the United Kingdom.

Photo Credit: Anthony Quintano

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s