Business deficits in minority neighborhoods across the United States

Roughly 85% of the business establishments active in the United States in 2020 employed fewer than 20 people. While individually small, they collectively employed more than 30 million people and paid those employees almost $1.4 trillion. The importance of these genuinely small businesses becomes more pronounced when focus shifts to their outsized contributions to local economic vitality, and because their prospects are much better in some neighborhoods (e.g., majority White) than in others (e.g., majority Black or majority Hispanic). In this paper, we document and discuss business deficits in majority Black and majority Hispanic neighborhoods across the United States. These large and persistent deficits, along with evidence of different correlates of small business densities, motivate the need for more research that focuses on the interplay between economics, sociology, and race and ethnicity when it comes to understanding structural inequalities in neighborhood business landscapes.