Local News in Virginia
Part One: HBCU Enrollment Woes Mirror Business Closures Post-Segregation
Of the changing consumer patterns that surfaced after the 1965 Civil Rights Act opened doors for consumers of color, the 2008 Journal of Socio-Economics noted, “Declining segregation meant that Black consumers gained admittance to the more diverse national economy and in the process became less inclined to patronize the still growing number Black-owned firms. As Black disposable income increased, the portion of their income spent on Black-owned business decreased.”
This means the answer is yes, no, and wait-and-see because the ripple effect recently changed in the business community. Specifically, the number of minority-owned businesses increased by 45.6 percent to 5.8 million between 2002 and 2007, more than twice the national rate of all U.S. businesses, according to the U.S. Census Bureau.
In addition, the number of women-owned businesses increased 20.1 percent during the same period. The total number of U.S. businesses increased between 2002 and 2007 by 18.0 percent to 27.1 million.
Increases in the number of minority-owned businesses ranged from 60.5 percent for Black-owned businesses to 17.9 percent for American Indian and Alaska Native-owned businesses. Hispanic-owned businesses increased by 43.6 percent.
Receipts of minority-owned businesses rose 55.6 percent to $1.0 trillion between 2002 and 2007. Receipts of all U.S. businesses increased by 33.5 percent, to $30.2 trillion.
So as more HBCUs struggle to compete with historically white colleges and universities, their future hinges and swings on yes, no, and wait-and-see because minority-owned businesses reinvented themselves and are growing at an unprecedented rate.
The truth is many colleges and universities (including Norfolk State) are struggling with a declining consumer base. For example, St. Bonaventure’s president, Sister Margaret Carney said in recent news reports, “Each of us is sort of chasing a declining base.”
Canisius President John J. Hurley said, “We are in the midst of a 16 percent decline in the number of high school graduates, and that is already working its way through the elementary and the secondary school system.”
Meanwhile, St. Michael’s College in Vermont has chosen to downplay growth and emphasize selectivity. This means while a recent survey of more than 400 business officers from both public and private colleges showed that 88 percent of financial officers reported that increasing enrollment has been their primary focus over the past five years.
Black businesses faced the same challenges after the 1965 Civil Rights Act was passed. Black businesses were now competing with Mom and Pop operations and major chains, in other words. And the bottom line was suffering. It did not look too great in 1965, when the landscape was changing, in other words.
”In 1969, the receipts of black firms equaled 13.5 percent of blacks’ after-tax income,” the 2008 Journal of Socio-Economics noted.
“By 1977, the proportion had dropped to 9.9 percent and by 1985 to 6.6 percent. This decline was partially attributable to increased competition from larger, white-owned firms. Also during the 1970s, the number of black unincorporated business owners fell by 8 percent.”
“While these statistics were discouraging, there was one indicator of the success of black entrepreneurship. There was a growth of incorporated business ownership among blacks.”
Next Week—
The Reinvention of HBCUs (Part Two)
