This Father’s Day will be my sixth without my dad, Cary Booker. He was born poor, in a small town in North Carolina to a single mom with health problems who couldn’t care for him. When he had nowhere else to go, a local family in town took him in and raised him as their own.
The family who raised him were successful small business owners; they ran the Black funeral home, which like so many other Black-owned small businesses during the time of segregation was a critical source of independent wealth. That family, and their success as small business owners, opened doors for my dad he never knew existed. By the time I was born, my dad had moved his family from poverty to the middle class within the span of a single generation.
Black-owned businesses have always been central to our communities — more than just storefronts, they are job creators and community anchors that create opportunity for so many.
That is certainly true in my community in Newark, New Jersey, where black-owned small businesses — from barbershops to coffee shops to the local burger place — are the lifeblood of our city.
But deep-seated structural inequalities and persistent disparities in wealth and access to capital still prevent so many African Americans from pursuing their dreams of entrepreneurship. Black entrepreneurs face challenges getting capital from lenders, and when they do, they disproportionately receive smaller loans with higher interest rates.
Given the challenges accessing debt capital, Black entrepreneurs are often dependent on independent wealth, which on average lags far behind that of White Americans. According to the Kauffman Foundation, the average startup capital required to launch a new business is about $30,000. That is close to double the net worth of the typical Black family, who already has nearly ten times less wealth than the average White family.
The racial wealth gap we see today did not happen by accident. Purposeful federal policy over the course of decades has concentrated wealth in the hands of the few at the expense of the many. Some of the most ambitious federal policies as they were originally designed — from Social Security to the GI Bill — excluded Black Americans.
Today, it’s going to take purposeful policy to balance the scales and create a nation of abundant opportunity for everyone.
To start that work, I am proposing ideas to dramatically expand the level of federal investment and commitment to accelerating Black entrepreneurship and small business development.
We can, and should, give every child a “baby bond,” my proposal to help close the opportunity gap in this country. Baby bonds would create a federally-funded savings account for every child at birth. Each account would be seeded with $1,000 and sit in an interest-bearing account, growing by up to $2,000 each year, depending on family income. By age 18, the most impoverished kids would have access to nearly $50,000 for eligible uses like starting a business or paying for college tuition — the kinds of investments that change life trajectories. The average Black child would have access to more than $29,000 by age 18; a Columbia University study found that a plan like this would virtually close the racial wealth gap among young adults in America.
Next, we should work to build the greatest apprenticeship system in the world, with a focus on entrepreneurial apprenticeships that develop a pipeline of aspiring entrepreneurs through an “earn while you learn” model. And we should make dramatic investments in increasing access to capital in every community — beginning with a $1.5 billion investment in the State Small Business Credit Initiative, a successful program pioneered by the Obama Administration that provides flexible funds for states to create local, community-driven programs to expand venture capital and credit support to underserved areas.
Finally, we should boost entrepreneurship accelerators and incubators with a $25 million investment in a nation-wide startup accelerator program based in geographically-underserved areas and dedicated to serving underrepresented entrepreneurs, including women, people of color, and veterans.
This Father’s Day, I will remember my dad — his humor, his kindness, and his intelligence. I will also remember one of the most important lessons he taught me: that we cannot pay back the work our ancestors did for us — we can only pay it forward.
We owe it to past and future generations to do just that — and to finally invest meaningfully at the federal level in boosting Black entrepreneurs and Black small businesses so that they can do what they do best: empower our communities, expand opportunity and make our entire economy stronger.