Black and Hispanic Small Business Owners Have Been So Badly Hit

Black and Hispanic Small Business Owners Have Been So Badly Hit

The pandemic has had a severe impact on Main Street. Small business have closed down across the U.S. by the thousands. The situation is worse for minority-owned businesses, however. The advocacy group Small Business Majority released a survey on Jan. 27, which found that nearly one in five Black and Hispanic entrepreneurs. Expects to close their business permanently within the next three months.

This is a higher rate than white business owners. This is in response to a Federal Reserve of Cleveland report that suggests that the impact of coronavirus. Could be more severe for Black and Hispanic-owned companies than for white-owned ones.

Researchers on racial inequities, entrepreneurship and the impact of economic downturns have found. That Black-owned and Hispanic-owned businesses were more susceptible to recessions than white-owned ones. The capital of minority-owned businesses is lower than that of white-owned businesses.

This makes it more difficult for them to protect themselves against economic downturns. Black-owned and Hispanic-own companies tend to be concentrate in industries. And areas that have most severely affect by the pandemic like retail and restaurant.

Income Is Lower, But Capital Is Less Business

Long-standing disparities in homeownership rates are a major reason for the gap in capital available for Black and Hispanic entrepreneurs. Hispanic Americans and Black Americans have lower homeownership rates, which limits their ability to use their home equity to create or maintain businesses. Higher mortgage rates, premiums for mortgage insurance, and property taxes will mean homeowners have less wealth to help keep their businesses afloat during tough times.

The 2019 Survey of Consumer Finances revealed that white business owners have almost five times as much home equity than their Black or Hispanic counterparts. Moreover, income from minority-owned businesses was 10 times lower than that of white-owned.

This means that white-owned businesses have greater liquidity to weather sharp drops in revenues such as the one experienced during the pandemic. We found that Black and Hispanic business owners are 25 percent less likely to have emergency savings than those of white business owners. They also hold significantly fewer stocks and other liquid assets.

Minority business owners often have to rely on other income sources, such as family income or debt, to finance their operations. However, entrepreneurs might need cash when they most need it. Therefore, higher interest rates on debt can drain cash.

Business Decline

The pandemic’s impact on small business clients and customers only adds to the problem. Many minority-owned businesses are located in areas with high minorities populations. These communities have particularly affect by the pandemic through job loss and illness. This affects the demand for minorities products and services, particularly since recessions often hit Black and Hispanic communities in America earlier and harder.

SafeGraph, an analytics website, shows that foot traffic to businesses in minority communities has fallen more than in white neighborhoods. Small businesses located in predominantly white neighborhoods saw a decline in foot traffic of almost zero during the pandemic. Small businesses with a 20% minority population saw almost 40% decline in foot traffic.

Black and Hispanic own enterprises tend to be concentrate in certain sectors, which can also lead to racial disparities in closings. American Community Survey data shows that the most vulnerable sectors, such as restaurant and retail, have a higher percentage of minority ownership. It is not surprising that the number of job losses in the worst recession was greater for those who own minority businesses.

Targeted Assistance

Businesses owned by minorities in crisis are less likely to receive government aid. This is what seems to be happening during the pandemic. To assist small businesses affected by the coronavirus lockdowns, the federal government established the Pay check Protection Program in April. It was administered in two rounds and offered loans worth more than US$500billion. If funds were used to pay payroll, the loans could be forgiven. Many small businesses have found these loans a lifeline.

Research has shown that the first round was not equitable in terms of distribution. The majority of funds were given to neighborhoods with low Black and Hispanic populations. Due to the high number of business closings during the first months of the pandemic, it may have been crucial that federal assistance was not given to minority business owners.

We believe that it is vital that the Biden administration directs more of its small-business aid to Black and Hispanic businesses and the most vulnerable communities in order to mitigate the negative effects of the downturn on minority-owned business. If aid is not distributed more fairly, there will be further suffering for the Black and Hispanic businesses.

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Business Schools Failing On Climate Change

Business Schools Failing On Climate Change

Nestle and Coca-Cola have closed down their facilities recently, while Starbucks is facing a worldwide shortage of coffee due to climate change. Every resource that businesses use, including water, energy, and land, is affect by climate change. There will no business left behind.

As a professor of business management and researcher, I’ve found that the U.S. has a lack of sustainable business programs that align with the scientific consensus about the need for radical changes to avoid the disastrous effects of climate change. These business leaders of the future not prepare for the climate change issues their companies will face.

Business Sustainability Climate

According to climate scientists around the world, keeping global temperatures rising below 2 degrees Celsius is the best way to prevent climate change’s most harmful effects. To achieve this goal, the scientists also conclude that drastic reductions in greenhouse gas emissions are needed.

California has, for example, enacted stringent laws regarding clean air, vehicle emissions, and energy efficiency standards. Required a 40% reduction in greenhouse gas emissions by 2050. California has shown that it is possible to reduce greenhouse gas emissions while still maintaining a healthy economy.

The primary source of greenhouse gas emissions in the United States and around the world is business and industry. They contribute anywhere from 6 to 25 percent to buildings and as much as 25% to electricity production worldwide.

Companies are most likely to reduce carbon emissions. This is achieve by many companies becoming more efficient with their energy and reducing their waste. Corporate sustainability efforts can be describe as business as usual with little or no improvement. The problem is that businesses are failing to see the need for deep change.

There is a vast gap between where we are now and where science points us to go. The 2015 Paris Agreement established an international agreement to limit global warming to 2 degrees Celsius. Science tells us that total emissions must be limit to one trillion tonnes. This would represent a decrease of 49 to 72 per cent globally from 2010. The United States agreed to reduce its emissions by 26 to 28 percent nationally by 2025. Some estimates suggest that the U.S. will need to double its efforts to achieve this target.

Companies Must Work Within The Scientific Carbon Budget Climate

Dell and Coca-Cola have each committed to a 50% reduction in their carbon footprints by 2020. NRG Energy, on the other hand, has pledged to reduce its emissions by 90% by 2050. Wal-Mart’s environmental footprint is 90% in its supply chain, however. Wal-Mart has set a goal to partner with suppliers to reduce their carbon emissions by 1 billion tons between 2015- 2030. This represents a more than 4000 percent increase on their previous target of 22,000,000 tons between 2010-2015. The vast majority of businesses have yet to adopt these bold reduction goals.

U.S. Business Schools Offer Sustainability Education

It is not surprising that corporate commitments to sustainability are so weak. One factor could be the manner in which business schools train corporate leaders. While sustainability is becoming a more prominent theme in business school curricula it’s still quite new and uncommon. The pace of change in business schools has been slow.

Our research involved 51 of the many business programs in the United States. We found that an introductory course in sustainable business is often an elective within the business school curriculum. A few schools offer certificates, minors, majors or graduate degrees in sustainable management or sustainability business.

Our study found that 51 schools are at the forefront in training students in sustainability. This is in contrast to many business schools which don’t offer any sustainability courses. We found that these schools do a poor job in preparing students for the future.

Sustainable Business Climate

The reading lists for 81 courses in sustainable business were analysis. We came up with a list of 88 readings. We found very little overlap between the readings and authors given to students as sustainability education is still a new discipline. There was only 20% overlap across the syllabus, which suggests that there is very little agreement on what should be taught.

The majority of sustainability readings given to business students, 55 percent, took a low sustainability position. These readings focus on a business as usual approach, which makes small incremental improvements. They point to examples like the move by the printing industry to water and soy based inks. This encourages a do more good approach to sustainability. Science says otherwise.

These readings revealed two reasons to adopt sustainability practices: either the benefits for business (i.e. increased innovation, competition and profitability) or the necessity to comply with law (i.e. meeting labour, emission or pollution regulations). Only 29 percent of the studies we conducted acknowledged the scientific necessity for implementing sustainability practices.

Future Leaders In Sustainability For The US

Global temperatures will continue rising for the next 100 years, even if greenhouse gas emissions are reduced or stopped. This is due to carbon dioxide already present in the atmosphere. Sustainability challenges are certain to confront today’s business students, who will become tomorrow’s business leaders. Future business leaders need to have a scientific understanding of how climate changes are currently affecting business and how they will affect business in the future.

These readings should be assigned by professors to communicate the scientific necessity for businesses to operate in a more sustainable manner to combat climate change. These readings should highlight the need for “substantial” changes in policies, institutions, and practices. This education can shift the focus away from corporate profit and legal compliance to a desire for sustainability.

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Tax Code Bypasses Women Entrepreneurs

Tax Code Bypasses Women Entrepreneurs

While Republicans are finishing up a tax plan to overhaul the system. They should also consider making the U.S. tax code more accessible to women entrepreneurs https://107.152.46.170/togel-online/bandar/impian4d2/.

According to ground breaking research that I did through American University’s Kogod Tax Policy Centre. On how the tax code impacts women business owners. Current federal tax incentives designed to assist small businesses grow or access capital. Effectively exclude or bypass the majority of women-owned businesses. My research focused on whether small business owners of women can or do take advantage tax breaks for them.

Our research revealed a major blind spot in the U.S. tax code and women business owners. Our survey data, together with our review and analysis of tax research on the subject. Show that many women-owned businesses are not able to access more than US$255 million worth of tax incentives. Congress created to assist small businesses. For lawmakers, my question is: Will Congress seize this once-in-a generation. Opportunity to pass comprehensive tax legislation that recognizes the difficulties women business owners face as well as how we can help them through tax code?

A Growing Economic Contribution Tax

Since 1986 when Congress overhauled the tax code, the number of women-owned. Businesses has increased from 4.1 million in 1986 to more than 11,000,000 at the end 2016. They now make up more than a quarter of all U.S. companies. They employ 9,000,000 people and contribute $1.6 trillion to our economy. Nearly all of them are small businesses.

Recent years have seen their ranks grow at five times the rate of the national average for all business. Increasing 45 percent between 2007 and 2016, a period which included the Great Recession. It is even more remarkable that this feat was achieve by women without the benefit of small business tax breaks.

Tax Myopia

Congress has made a variety of efforts to encourage women’s business ownership over the years. They have passed legislation that targets discriminatory lending practices, and promoted federal counseling and contracting opportunities for women business owners.

The Equal Credit Opportunity Act of 1974, for example, prohibited discrimination in credit-granting based on marital or sex status. The Women’s Business Ownership Act of 1998 supported small-business ownership by women and created the National Women’s Business Council.

The Small Business Reauthorization Act of 2000 also established a program to assist women-owned businesses in obtaining federal contracts. However, lawmakers are blind to the serious disadvantages that women face in accessing capital for their businesses. This is despite the fact that they have repeatedly addressed this problem in the tax code.

The Office of Advocacy of the Small Business Administration released a report earlier this year that showed that women-owned businesses consistently fall behind in terms of employment and revenue. Another congressional study found that only $1 out of every $23 in conventional small-business loans goes to women-owned businesses.

Billion Dollar Blind Spot

My report, Billion Dollar blind spot, How the U.S. Tax Code’s Small Business Expenditures Impact Women Businessowners was create by Women Impacting Public Policy. This non-profit trade association devote promoting women entrepreneurs survey 515 female business owners to analysis their use of four key tax expenditures that are design to encourage small business growth.

Section 1202 permits capital gains exclusion for profits from the sale of qualified small-business corporation stock. This provision is expect to cost taxpayers $6.2 trillion over the next five-years. It excludes service businesses from qualifying as most women-owned businesses work in the service sector.

Section 1244 allows small-business investors to treat losses as ordinary losses. Over the next 10 year, it is expect to cost $500,000,000. Section 179 allows for an accelerated deduction from the tax on equipment investments in tangible personal property that has a value greater than $248 billion within five years. Section 195 allows for a $5,000 deduction to cover start up costs. It is estimate that it will cost at least $400m over five years.

These Results Were Very Informative

These three provisions are so restrictive that most women-owned businesses can’t make use of them. This makes it difficult for business owners to access capital through tax breaks. These rules exclude service businesses or bypass those that aren’t C corporations or have made few capital intensive investments and therefore can’t claim the deduction.

This is because 61% of women-owned businesses are in the service industry. While most small businesses are not organize as a C-Corp. This makes it difficult to attract investors. These findings were confirm by our survey data. Very few respondents claimed to have ever used sections 1202 (less that 1%) or 1244 (6 percent), while more than half of those surveyed don’t fully enjoy section 179.

Women business owners could be missing out on more than $255 billion in U.S. aid over the next few decades on these provisions. Our survey data also confirmed that women business owners can take advantage of tax breaks. Nearly 60% of respondents claimed the start up deduction.

We also found that there was no government research about how the tax code impacts women business owners. The Senate and House tax-writing committees have not held a hearing about the issues faced by women business owners or whether the small business tax incentives in the tax code are working as intended. These critical questions are not being answered by the relevant government agencies, which is why there is a lack of data. The Internal Revenue Service and Treasury Department, as well as the SBA, don’t have tax data for women-owned businesses, which account for almost 40% of all U.S. companies.

Positive Tax Signs

Despite the current state of affairs there have been positive signs that lawmakers are not going to ignore the issues raised in our report. Both the Senate and House of Representatives have examined our research and are considering its importance. Democratic Senator Jeanne Shaheen referenced our report at a June committee hearing, and I testified earlier this month before the House Committee on Small Business.

The lack of data from the government and oversight by Congress on small business tax expenditures leaves lawmakers without vital information. This raises questions about whether these tax provisions work as Congress intended. Research from academic and government sources has consistently shown that women business owners face barriers to capital.

Congress doesn’t have enough information to make the right decisions for these 11 million small businesses to overcome their existing obstacles to growth. This is a stark contrast to the 2016 commitment Congress made to evidence-based policymaking. As they work to reform the U.S. tax code, policymakers have the opportunity to speak on behalf of women-owned businesses.

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