In the wake of Lincoln’s Emancipation Proclamation, on June 19th, 1865, the Union Army announced General Order No. 3 proclaiming the end of slavery in Texas, marking the beginning of the end of a dark period in American and human history.
Today, we commemorate that day as Juneteenth National Independence Day. WRO Law and Strategy takes this opportunity to reflect and honor the history of black excellence, and particularly black ownership.
The history of black businesses and black ownership in the United States has been a long and fraught one. The earliest black businesses can be traced back to before slavery’s end in the United States. In the free states, African Americans ran many businesses small and large, from shoemaking to sailmaking. Freedman William Johnson was one notable pre-emancipation entrepreneur in the American south. In his diary he outlined his successes in owning a barbershop, a bathhouse, a bookstore, and even plots of land.
Another famous instance is that of Mary Ellen Pleasant, who famously became one of the first black women to become a self-made millionaire. After moving to San Francisco in 1852 during the San Francisco Gold Rush, Pleasant worked as a servant for wealthy financiers. As she worked, she carefully eavesdropped on her employers’ conversations to learn about investing and wealth building. With these free lessons, she invested her modest salary into real estate, local laundromats, boarding houses, and even gold and silver mines. The fortune she amassed would be worth hundreds of millions of dollars today.
After emancipation, while most African Americans in the antebellum south remained employed in menial labor or share-cropping, many fled north to become the founders of what would become the black middle class in the midwest. As Reconstruction gave way to Jim Crow segregation, the black bourgeoisie remained strong, and took advantage of a large class of black consumers blocked out of white owned businesses. Between 1900 and 1914, dubbed the Golden Age of Black Business by historians, the number of black owned businesses doubled--from 20,000 to 40,000.
Among the famous centers of black business were the south side of Chicago, Atlanta, and the Greenwood District of Tulsa Oklahoma--which infamously became victim to the Tulsa Race Massacre. Greenwood was once dubbed a “Black Wall Street”--a testament to what the African American community could build even in the face of severe racial exclusion.
In the Tulsa Race Massacre, this “Black Wall Street” was destroyed in two days of rioting in response to a clash between a white lynch mob and a defiant group of black men at a Tulsa jail. This episode is among the most dramatic examples of the obstacles the black community has faced in forming a durable middle class and intergenerational wealth--over $30 million in black owned property and hundreds of promising black lives were wiped out in a frenzy of racial hatred. However, the more persistent restrictions to black advancements in industry were more subtle, pernicious, and remain with us today.
A perennial hurdle for black entrepreneurship has been the lack of credit lines available and the practice of redlining. As the compounded effect of segregation and urban planning marginalized black Americans to inner city ghettos, banks restricted loan and mortgage insurance to those residing in these neighborhoods, deeming them a financial risk. This essentially stifled the development of black entrepreneurship, black ownership, and stunted the progress of black communities.
While many of these discriminatory practices aren’t in place today to the same degree they were in the 20th century, we still feel their lingering effects, and black businesses still face particular challenges.
For instance, generations of denied opportunities have meant that even where black families have caught up, an entrenched racial wealth gap persists. Many white entrepreneurs benefit from families who have had generations to accumulate property and capital gains and pass them on to their children (along with business experience and know-how), whereas many equally ambitious and entrepreneurial black Americans may be the first in their families to go to college or start a business. With an average net worth of $17,150, the typical black family has a net worth that is just over one tenth of the typical white family’s ($171,000).
With less savings backing them up, during the Coronavirus pandemic, black-owned businesses closed at twice the rate of their white counterparts. And this only tops off a decades-long trend of a decline in black-owned businesses, attributable to growing monopolizations and market consolidation by larger firms.
As we stand at a generational sea change in racial politics, and rebuild and reopen small business communities, now is the opportunity to build back a tradition of black entrepreneurship and black ownership, tapping into a long history of black ambition and resilience.
Our firm prides itself in assisting many black entrepreneurs, ranging from young music artists to professors and online retailers, start and maintain their businesses. We assist with the procurement of investment capital, as well as the navigation of compliance and legal issues. As we all build a strong and diverse business community in the DMV and New Jersey, WRO Law and Strategy is here to give you the experience, guidance and confidence you need to start something new and leave your mark.