Business Ownership

Business Ownership measures the share of St. Louis region residents who were employed in the last five years that are business owners. In 2016, about 27,000 people reported being business owners, which represents 5 percent of individuals employed that year.

Business Ownership Indicator Scores

City of
St. Louis

68

St. Louis
County

1

St. Charles
County

100

St. Clair
County

52

Data Source: American Community Survey 1-year PUMS, 2016

Data Note: PUMS data may differ slightly from estimates on American Factfinder due to differences in sampling. See PUMS technical documentation for more information. The number of sample cases is too small to report reliable estimates for additional racial groups.

What does this score mean?

A score of 100 represents racial equity, meaning there are no racial disparities in the outcomes between black and white populations. The lower the Equity Score, the greater the disparity.

For Business Ownership, a score of 100 – a score reflecting racial equity – would mean black and white residents are equally likely to own their own business. It is important to note that for this indicator, equity is not our only goal; we also want to improve outcomes for all.

WHAT DOES THIS ANALYSIS MEAN?

White employed residents are three times more likely to own their own business than black employed residents. This disparity varies greatly across the four counties studied. In the City of St. Louis, white residents are over thirteen times more likely to own a business (5.5%) than black residents (0.4%). In St. Clair County, white residents are about 70% more likely than black residents to own a business (2.9% are business owners relative to 1.7%). In the City of St. Louis, 2.7% of white employed residents are business owners, compared to 2.0% of black employed residents. In St. Charles County, white residents are not more likely than black residents to be business owners.

If business ownership rates were equitable, there would be:

  • 550 more black residents that are business owners in the city of St. Louis,
  • 515 more black residents that are business owners in St. Clair County, and
  • 3,823 more black residents that are business owners in St. Louis County.

Why Does Business Ownership Matter?

Economists from the Federal Reserve Bank of Cleveland have identified active small businesses and minority business ownership as two of the major growth factors for regional economies. The Aspen Institute has identified business ownership as key to closing the racial wealth gap. Equity in business ownership could increase incomes, increase wealth, and decrease generational poverty.

Questions for Further Investigation:

  • Why is there a racial disparity in Business Ownership?
  • What can St. Louis do to reduce racial disparities in Business Ownership?
  • What initiatives are currently underway to reduce racial disparities in Business Ownership?

How can I learn more about this issue?

There are a number of organizations that promote minority business ownership in the St. Louis region, including:

 

Business Ownership Data

Individuals employed in the last five years that are business owners

 AllBlackWhiteDisparity RatioEquity Score
Business Owners
4,8441,5362,664
All Employed Workers
195,61778,372100,086
Percent of Business Owners
2.50%2.00%2.70%1.358 to 168

Data Source: American Community Survey 1-year PUMS, 2016

Employed individuals who are business owners

 AllBlackWhiteDisparity RatioEquity Score
Business Owners
13,90028111,772
All Employed Workers
312,14774,068212,457
Percent of Business Owners
4.50%0.40%5.50%13.750 to 11

Data Source: American Community Survey 1-year PUMS, 2016

Employed individuals who are business owners

 AllBlackWhiteDisparity RatioEquity Score
Business Owners
4,5382444,294
All Employed Workers
114,3965,047102,698
Percent of Business Owners
4.00%4.80%4.20%0.875 to 1100

Data Source: American Community Survey 1-year PUMS, 2016

Employed individuals who are business owners

 AllBlackWhiteDisparity RatioEquity Score
Business Owners
3,6956752,919
All Employed Workers
148,97640,46799,264
Percent of Business Owners
2.50%1.70%2.90%1.706 to 152

Data Source: American Community Survey 1-year PUMS, 2016