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.

Which Calls to Action from the Ferguson Commission’s report are linked with this indicator?

The Commission’s calls to action related to business ownership include:

• Concentrate Financial Services through Empowerment Centers
• Create Individual and Family Development Accounts
• Implement a Statewide M/WBE Program
• Develop and Implement an Economic Inclusion Infrastructure
• Embed Public Banking Models into Community Development and Financial Institutions

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?

Business Ownership Data