A push -- not a pause -- for black businesses

June 5, 1981

A "pause" on the political and economic roadway. That is how many blacks seem to perceive their condition midway through the first year of the new Reagan administration. That sense of an interruption or break, with the federal government less inclined to take an activist role on behalf of blacks -- as was more the case under the Carter administration -- is underscored by an ABC poll taken this spring. It finds that white Americans, while generally agreeing that much progress has been made for blacks during the past two decades, believe that blacks should now "forge ahead" on their own in seeking further progress.

Given the free-market, do-it-yourself orientation of the Reagan administration, this clearly is a time in America's affairs when allm persons, not just blacks, will be called upon to move ahead more on their own initiative than with the financial backing of a once- beneficent federal government.

Yet it would be rediculous not to recognize that many parts of the business community, not to mention agriculture, still receive generous federal assistance. Consider, for example, the US Export-Import Bank loans that go to help large corporations sell goods abroad. And who can forget those not inconsiderable loan guarantees for Chrysler?

For these reasons, it would be unfair for the Reagan administration to overlook the present plight of the nation's black business community. That community includes from 230,000 to upwards of 300,000 firms. Most are small "mom and pop" or family-held retail stores. But some are highly sophisticated enterprises. Of the top ten black-owned firms in Black Enterprise magazine's latest survey of black businesses, for example, five are energy companies with combined annual sales of $255.4 million.

The point is that black-owned firms, like small businesses in general, are finding themselves socked by soaring interest rates, continuing inflation, and often erratic consumer purchasing habits. Despite an increase in overall numbers, black firms have actually shrunk in financial importance relative to the gross national product during the past decade.

All Americans have a vested interest in ensuring the success of black-owned businesses. They provide not only jobs but a definite stake in the overall economic pie for the nation's black community. Their role takes on added dimension at a time when direct federal assistance for blacks will be reduced, given cutbacks in such social programs as food stamps and medicaid.

What is to be done to aid black firms? Minority firms may well want to seek out appropriate joint ventures with white-owned firms. Black businesses might also consider converting out of the retail sector into the "hightech," professional sector of the economy.

That means going into computer and data processing, credit reporting, market research, accounting and auditing, electronic and space-related enterprises, and so on.

Federal programs directly aiding minority firms, such as those in the Small Business Administration and the Commerce Department, should be made as efficient and comprehensive as possible. Budgets should be set at realistic levels to take into account high interest rates.

Such a helpful and supportive attitude from the administration need not be construed as "favoritism." Rather, it should be seen as a special caretaker role , ensuring that a national asset -- in this case, the nation's several hundred thousand black-operated business enterprises -- is not permitted to decline in the currently difficult economic climate. Such a decline would be a loss for all Americans.