Black-Owned Businesses Received Less Than 2% of PPP Loans, White-Owned Got 83%
moguldom.com
moguldom.com
https://www.census.gov/newsroom/press-releases/2015/cb15-209...
https://www.usnews.com/news/articles/2016-09-01/most-of-amer...
https://blackdemographics.com/economics/black-owned-business...
Edit: More data -
"Data from the Small Business Administration indicates that just over 19 million businesses, or 70.9 percent of all U.S. businesses, are white-owned. Blacks own about 2.6 million businesses or 9.5 percent of all U.S. businesses, and Latinos own 3.3 million businesses or 12.2 percent of all American businesses. But the sales and employment numbers tell a more depressing story. The 19 million white-owned businesses have 88 percent of the overall sales, and control 86.5 percent of U.S. employment, while black businesses have a mere 1.3 percent of total American sales, and 1.7 percent of the nation’s employees."
Seems like the loan rate roughly matches the % of employees by group.
That said for me it didn’t seem worth it, as I wouldn’t get unemployment during that time - and if I somehow screwed up it would mean I’d need to repay it. No chance of that on unemployment.
I personally think it is most likely that more of the money went to larger corporations than intended.
I am not sure which of these metrics is most important, but I think comparing PPP recipient ownership to the general population is rather blunt, especially if it is the only metric offered.
> The full list of Paycheck Protection Program recipients released by the Small Business Administration on Monday shows that of the 14 percent of businesses that chose to identify race in their loan application, Black-owned businesses received 1.9 percent of loans while White-owned businesses received 83 percent.
So the actual percentage of black-owned businesses receiving PPP loans is somewhere from 0.26% - 86.26%, depending on how you think the data is biased.
https://www.nytimes.com/2020/04/10/business/minority-busines...
> Racial discrimination in banking is outlawed on paper, but it continues in practice — often in subtle forms. In 2018, for instance, the National Community Reinvestment Coalition, a nonprofit organization that works with banks to increase the flow of private capital into poor and underserved communities, sent “mystery shoppers” to 32 different banks in Los Angeles. It found that potential borrowers with identical financial profiles were treated differently by bankers based on their race. Black and Latino borrowers were asked for more detailed financial documents and were given less information about many banks’ available products than white borrowers.
It probably does hold true though that white businesspeople may have better relationships with their bankers, resulting in faster loan processing.
This is very similar reasoning to alien conspiracy theorists, who look at something in the night sky and assert "It can't be A, it can't be B, it can't be C, therefore it must be Aliens"
The author was also dishonest. They purposely framed their blog post in a way that would you lead you to this.
That would be just crazy.
You do nobody any good by claiming racism where there is none. In fact you do damage, the same way that hate crime hoaxes and false sexual assault allegations do damage to real hate crime and sexual assault victims.
It's the responsible thing to do.
And I'm not saying we shouldn't look for an explanation. The null-hypothesis is that these loans are allocated proportionally, so a deviation does require an explanation, which will probably be interesting, most likely multi-variate, and may include a component of discrimination. The nature of that discrimination may be different than what you assumed - so how are you supposed to fix it, if you were too lazy to actually dig to find the actual problem.
Why is that controversial?
[1] Truth be told, I actually see debt in a negative light. I haven't seen a lot of small business survive when starting with a bank loan - it's like you're setting yourself to fail because not only do you have business expenses, and not only did you way overestimate the sales you were going to do (a common trait of entrepreneurs), but also you have loan payments that drain your revenues. And those loans are usually personally guaranteed, so if your business tanks, you are still responsible for them. I wish debt was harder to come by across the board.
There is racist discrimination in banking. This can be demonstrated. The burden of proof is on you to demonstrate that the PPP program is somehow magically immune to that discrimination.
Come on. You can't do to that. That's not how it works. The burden of proof is always on a positive claim. General negative claims are intrinsically unprovable. This is because for one, you've begged the question, and there is no level of evidence that you would accept or even list what you would accept as evidence that your conclusion is wrong.
More importantly, it is impossible to list every factor and modality of this discrimination (and you have to do that to prove a universal negative claim that there is no racial discrimination), because there is an infinite number of possibilities of this manifestation (i.e. what is the nature of this racist discrimination you're claiming?).
Here are some potential modalities for this 'racist discrimination'.
1) The program was designed with the intent to discriminate against certain minorities (and not others). 2) The program was not designed with the intent to discriminate, but certain factors had as a side-effect discriminating against certain minorities (and not others). 3) The program was not designed with the intent to discriminate and does not intrinsically discriminate, but the executors of this program intentionally discriminated against certain minorities (but not others) 4) The program was not designed with the intent to discriminate and does not intrinsically discriminate, and the executors of this program did not intentionally discriminated against certain minorities (but not others), but certain factors had a side-effect of discrimination. 5) The program and execution was not intrinsically discriminatory, but other structural factors led to discrimination. Factors such as the claim that minorities are discriminated in banking, or certain minorities being turned away from entrepreneurship by lack of role-models, or ... etc.
I can go on ... but each one is different and independent of the next and even within each one you have countless of potential mechanism. For example, if the claim is the program was intentionally designed to be discriminatory, you have unpack that and provide the mechanism for that. Is it Congress that did that? Is the White House? Which statue was discriminatory, etc.. And there are countless other potential avenues for discrimination. Each kind of discrimination calls for different approach to a solution. You're not honest when you shift the burden of proof like you did.
The positive claim here is "demonstrable, long documented racist discrimination in the banking system does not affect the PPP program within it".
And you can see the intrinsic impossibility of the burden you're placing to disprove this claim. Besides the fact that you posited no mechanism by which this racist discrimination takes place, what if the racist discrimination in the banking system did affect the PPP program, but was only a minor factor. That is, racist discrimination only explained 5% (or 10% or 30%) of the discrepancy and other factors dominated (racist or otherwise). Is that a possibility? It sure is.
That's why you need to do the legwork. This is especially true when you're talking about politically and culturally sensitive matters. The left typically makes a similar point around social studies research. Certain kind of research results may be used by racists, so you have to take extra care to qualify and frame the results. I agree with both. This is too important to be sloppy with.
I cannot stress this enough, you are hurting your case, because some individuals will believe you, they will do a deeper dive, and they may become disillusioned if they see you lied to them. Trust is so easily broken.
When the government straight up bans most companies from doing business, with little warning, and for a prolonged and unpredictable amount of time, I think some level of nuance should be applied.
>The government should not bail out private companies.
Approximately 0 people came to that conclusion reading your blog, because you used a dishonest click-bait title at a time of racial sensitivity.
This is a case of small businesses not having the resources to acquire the loans in the first place. Mixing in race obfuscates and distracts from the real issue here. It should have been easier for small businesses and harder for larger ones to balance the scales.
You can see exactly who was stepping up with quality information and even sort/poll by race if thats your thing.
It was being promoted as free money by some and many offered solid strategies for small businesses to make the 2nd cut and skip the lines.
I'm not quite sure what you're trying to say.
Businesses are only concerned with ethics if it improves their bottom line. 'Free' money in uncertain times is an opportunity any business will seize if it has the means to obtain it.
https://m.youtube.com/watch?feature=youtu.be&v=dwuUAGpWtlo
We are 15 days into SIP at this point. I do not need PPP/EIDL, but as a prior SBO, I followed this topic with interest. The quality of info was high and SB's had days and sometimes weeks notice on navigating the process.
I read that CVT went on to make $300k a day on YT (somedays) by providing daily updates on stimulus, PPP, EIDL, etc, so the incentive was there to get the word out.
If race is a factor, you'll find it was being discussed in their circles with the same delivery as Brian on YT. If not.. They should have picked a better accountant.
I personally don't see 'other' issues in this case, as this article describes a symptom and not a cause. The focus on race is at best a distraction from class, which is the real predictor on the ability to wrangle benefits from the government.
> US Treasury is transferring wealth to White people
I don't really interact with social media - why is white capitalized here? I'm not being facetious, just curious.
And wouldn't the explanation here be that the vast majority of wealth is in pension / passive funds, which primarily invest in large corporations, which are the most capable to wrangle benefits? Racist policies in the past and current discrimination limit the aggregate capital of this group, and therefore they're under-represented as presented here.
Obviously surveys are important but I worry that stating a conclusion allows leeway in choosing a hypothesis that fits personal bias and not reality.
- 'White' is capitalize cause as used it represents a racial identiy, please see https://www.theatlantic.com/ideas/archive/2020/06/time-to-ca...
- The article is not attempting to establish an "intent" to discrminate so it is irrelevant if Black people are underrespresented as owners of eligible companies. The article is only showing the policy does effectively discrminiate (whether as an intended or unintended consequence).
Also should the thread title mention that only 14% of PPP application respondents provided info on race?
A majority of modern studies about race rely on sampling.
Blacks own about 2.6 million businesses or 9.5 percent of all U.S. businesses
The 19 million white-owned businesses have 88 percent of the overall sales, and control 86.5 percent of U.S. employment, while black businesses have a mere 1.3 percent of total American sales, and 1.7 percent of the nation’s employees.
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The article doesn't clarify if by percent they mean number of loan applications approved or % of loan funding allocated.
If it the former, then black businesses have received far fewer loans than their representative amount. If it is by revenue, then it is actually inline with the ir representation in population.
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> Monday shows that of the 14 percent of businesses that chose to identify race in their loan application, Black-owned businesses received 1.9 percent of loans while White-owned businesses received 83 percent.
Might be interesting to see if this trend held when black owners did not identify themselves.
The sample size (14%) was large enough statistically. Might also be interesting to see if this trend was larger when white owners did not identify themselves.