A recent study conducted by the University of Wisconsin–Extension reveals that Wisconsin ranks last among all 50 states in terms of business ownership rates among people of color. Despite significant growth in the number of businesses owned by people of color since the late 1990s, they remain underrepresented compared to the state’s population demographics.
According to the study, Wisconsin is home to over 48,000 businesses owned by people of color, employing nearly 55,000 workers and contributing over $1.6 billion in payroll. However, these businesses make up only around 11 percent of all businesses in the state, while people of color constitute approximately 19 percent of the population.
The report highlights disparities among different ethnicities in Wisconsin. Latinos own 3.12 percent of businesses but make up 7.09 percent of the population, while African Americans own 4.3 percent of businesses and make up 6.44 percent of the population.
The study identifies various obstacles faced by communities of color, including limited access to financing, lending discrimination, and a lack of exposure to business development resources. Access to capital is particularly challenging for people of color, making it difficult for them to start and operate their businesses.
Business owners of color also struggle to hire employees due to limited funding options. Non-minority-owned businesses are twice as likely to have multiple employees compared to businesses owned by people of color.
To address these disparities, Governor Tony Evers allocated grant funding to support diverse businesses in 2022. However, some business owners, like Syovata Edari, suggest that the funds should have been directed directly to diverse businesses rather than through nonprofits.
Efforts to create inclusive business environments that provide opportunities for communities of color to build wealth, social and economic mobility, and community development are crucial, according to the study.
The findings of this study shed light on the need for increased support and resources to promote business ownership among people of color in Wisconsin, aiming to create a more equitable and inclusive business landscape in the state.
