The South is by far the best region in the United States for blacks to own businesses, and the Golden Crescent is one of the best places in the South — at least if you put any credence in the methodology created by NerdWallet.
The credit card blog has ranked the 111 metropolitan regions with populations exceeding 100,000 according to two equally weighted sets of measures — economic environment and black-owned business success — to determine where black-owned businesses succeed.
Georgia clearly ranks as the best state in the country by these metrics, with Columbus ranking No. 1 on the list, Atlanta No. 3 and Savannah No. 9. But Virginia’s major metros also appear to be hospitable territory, with Washington ranking No. 5, Richmond No. 11 and Hampton Roads No. 13. Remarkably, with the exception of Salt Lake City (No. 19), every one of the top twenty metros are located south of the Mason-Dixon Line.
Metros in the West Coast, the industrial Midwest and the Northeast consistently scored dismally.
There are two possibilities here: that (a) the South is more fertile field for black businesses, or (b) the ranking methodology is skewed toward metros with high percentages of African-American residents. The second interpretation is entirely possible, given that 30% of the entire score is based upon “the percentage of black-owned businesses” in a metro area. All other things being equal, a metro area where 30% of the population is black will tend to have ten times the percentage of black-owned businesses as a metro area where 3% is black. A better indicator would be to compare the percentage of blacks who own a business versus the percentage of the population as a whole that owns a business. I tried contacting NerdWallet this morning for clarification but had no luck.
Another finding: The vast majority of black-owned businesses are sole proprietorships — fewer than one in ten actually hire employees. In other words, most are self-employed. Do self-employed people — many of whom are free-lancers — really count as businesses? How do those numbers compare to the rate for the population as a whole? Sadly, NerdWallet doesn’t say. Yet another question: How does the average revenue of black-owned business compare to that of other racial groups? Again, NerdWallet doesn’t say.
As much as I would like to crow that Virginia is great location for black entrepreneurship, I hesitate to do so on the data provided here. This data needs polishing before we can draw any meaningful conclusions from it. If someone is inclined to do the grunt work and submit results to Bacon’s Rebellion for publication, I would be most grateful.
— JABThere are currently no comments highlighted.