People of color only own 18% of businesses with paid employees, despite making up about 40% of the U.S. population, according to the Census Bureau.
Sen. Elizabeth Warren, to nobody’s surprise, has a plan to fix that.
If elected President, the Massachusetts Democrat says she would invest $7 billion in funding to provide grants for non-wealthy entrepreneurs, according to her Medium post published Friday morning.
Grants would be limited to entrepreneurs with less than $100,000 in household wealth, Warren writes, citing that the figure is roughly five times the median worth of black and Latino families, and more than 10 times the median net worth of Native American families.
Earlier this month, Warren proposed replacing the Commerce Department with a new Department of Economic Development. This grant program, called the “Small Business Equity Fund,” would be part of that new government body if she’s elected.
“The small business gap is another example of how the racial wealth gap in America holds back our economy and hurts Black, Latinx, Native American, and other minority families and communities,” she wrote. “Because the government helped create that wealth gap with decades of sanctioned discrimination, the government has an obligation to address it head on.”
Warren estimates the program could translate into as many as 100,000 new minority-owned businesses, and therefore create over a million new jobs.
But that’s not all the progressive 2020 candidate will do, she writes.
“We need to do more. We have to recognize that even if we fully close the gap in startup capital, deep systemic issues will continue to tilt the playing field against entrepreneurs of color,” Warren says.
She also says she will direct federal retirement and pension plans to recruit more diverse investment planners, and triple the budget of the Minority Business Development Agency — an existing agency that promotes the growth of minority-owned businesses.
In the past few months, Warren has released other proposals that would grant extremely low-income families free childcare, erase student loan debt for millions of Americans, and address the opioid crisis. In April, she also announced a plan to base bonuses for hospitals on their maternal health outcomes, which are disproportionately poor among women of color.
While many of those plans would help some marginalized voters, this one could have a larger effect across the board. That might be smart politics for Warren, who has surged in some recent national polls overall, though is currently facing tougher odds among voters of color.
A new UC Berkeley-Los Angeles Times poll found Warren in second place with 18% of likely Democratic primary voters — nearing former Vice President Biden’s 22%, and just ahead of Sen. Bernie Sanders’ 17%.
Meanwhile, a recent poll conducted for the Black Economic Alliance showed 76% of African American Democrats who responded were “enthusiastic” or “comfortable” with Biden, versus only 42% who said they felt that way about Warren. Sens. Sanders, Kamala Harris and Cory Booker ranked in between the two.
According to Warren’s Medium post, the Small Business Equity Fund would be paid for by her ultra-millionaire tax: a 0.2% wealth tax levied on Americans with assets over $50 million.