Black Wall Street of the South: From Reconstruction to the Pandemic
A Publication of the Samuel DuBois Cook Center on Social Equity at Duke University
JULY 2021 ACKNOWLEDGEMENTS
RESEARCH TEAM: M’Balou Camara Samuel DuBois Cook Center on Social Equity at Duke University Andre' D. Vann North Carolina Central University William “Sandy” Darity Samuel DuBois Cook Center on Social Equity at Duke University Raffi E. García Rensselaer Polytechnic Institute and Samuel DuBois Cook Center on Social Equity at Duke University Jim Harper North Carolina Central University Bertha Johnson City of Durham Addison Malone Columbia University Henry McKoy North Carolina Central University Carl Webb Provident 1898 Gwendolyn Wright Samuel DuBois Cook Center on Social Equity at Duke University
FUNDED BY JPMorgan Chase Foundation
STUDY PARTICPANTS Durham entrepreneurs who gave their time and shared their knowledge and experiences to inform this report. Contents
Executive Summary...... 2
Introduction and Background...... 4
Data and Methodology...... 8
Portrait of the Business Ownership Ecosystem in Durham...... 10
Starting a Business...... 13
Business Age: Longevity and Dynamics...... 21
City Contract Bids and Funding Sources...... 23
Unpacking the Impact of COVID-19 on Black-Owned Businesses in Durham...... 25
5.0 The Paycheck Protection Program...... 31
6.0 Black Business Owners in Durham, NC: Coping with and Responding to the COVID-19 Impact...... 47
Policy Strategies: A Vision for the Future...... 53
Short-Term, Medium-Term, and Long-Term Interventions...... 54
Appendices – History...... 61
Appendices – Data...... 71
Appendix...... 74
References...... 80
Black Wall Street of the South: From Reconstruction to the Pandemic 1 Executive Summary
The goal of this project was to provide a descriptive, operational, psychological, social, and financial. Third, analytical, and textured understanding of black business it analyzes racial and gender disparities in the Paycheck owners’ experiences in Durham amidst the COVID-19 Protection Program (PPP) lending during the pandemic. pandemic. The report provides a rich historical context Fourth, it describes the ways that black business owners of black business ownership in Durham prior to the are coping and responding to the COVID-19-related onset of the pandemic, emphasizing the prevalence of impacts. Finally, the report concludes with a discussion racial and gender disparities in business characteristics. of the policy implications of this study and offers Second, the report examines the impact of COVID-19 recommendations that draw insight from the data and on four key dimensions of black business ownership: participant interviews.
Summary of Key Findings: 1. Before the COVID-19 pandemic, black business 4. The 2020 Buy Black Movement in Durham, although owners were disproportionately underrepresented generally positive, shaped business owners’ as business owners in Durham, North Carolina. perspectives and psychological experiences Moreover, compared to their white counterparts, during COVID-19 due to the fleeting engagement black business owners reported having fewer of predominantly non-black customer bases. It employees, less annual revenue, younger businesses, informed business owners’ understanding of Buy and more barriers to credit access. Black Movements as a positive short-term initiative, yet not a panacea for sustaining black-owned 2. Faced with the uncertainty created by the COVID-19 businesses in the long term. pandemic and the changing landscape of the world of work, black business owners in Durham 5. The majority of business owners expressed engineered countless innovations to ensure the a preference for reciprocal, intra-business or well-being of their employees, their firms, and varied community-level interventions that allowed firms communities in Durham. These innovations and across and within industries to support each other adaptations in-service of community, however, at- financially throughout the COVID-19 pandemic times came at the expense of respondents’ personal without taking on debt. Respondents highlighted a and financial well-being. wealth of factors played into their present and future success, chiefly communal impact and longevity, 3. Existing relationships with banks did not insulate personal peace and fulfillment, and individual black business owners in Durham who were seeking financial security. loans through the PPP, in contrast with recent literature on bank-customer relationship. Moreover, 6. The Paycheck Protection Program has helped black- some respondents experienced time as a racialized, owned businesses stay afloat. However, black-white gendered resource, specifically when seeking comparisons of loan amount distributions show financial support. Structural gendered racism shaped that black-owned businesses faced a 30-40 percent respondent experiences pre-COVID, and figured funding gap compared to other business owners. largely in some of the funding experiences of black The effects are statistically significant even when women business owners during the pandemic, correcting for selection and controlling for industry, operational adjustments made in solidarity with number of jobs, gender, lender, zip code, and other female employees, and the development of virtual borrower and community-level characteristics. networks.
2 The Samuel DuBois Cook Center on Social Equity at Duke University 7. The analysis shows evidence of self-selection in 8. Self-reported black owners, when compared to the deciding not to report the borrower’s race on the unreported race subsample, faced a 42 percent PPP loan applications for fear of the information funding gap, providing some evidence of a penalty being used against the applicant. In Durham, for self-reporting as a black business owner. When approximately 90 percent of the PPP loan borrowers compared to self-reported white borrowers, the did not report their race; this number is consistent magnitude of the effect remains similar, but the with national PPP data. Those that did not report statistical significance disappears. This shows their race received an average of approximately that financial institutions do compare across self- $35,000 more in funding; this amount is statistically reported racial groups. Hence, any bias against black significant at the 99% level. borrowers also hurts white borrowers that self-report their race. In terms of gender, the findings show that black female owners did not experience an additional funding gap outside of the racial funding gap faced by all black owners.
Black Wall Street of the South: From Reconstruction to the Pandemic 3 Introduction and Background
In the initial weeks after the onset of COVID-19, The Samuel DuBois Cook Center on Social Equity at the emerging consensus was that it was an equal Duke University and its collaborators at North Carolina opportunity virus insofar as it affected everyone equally Central University, the City of Durham, and local without regard to socio-economic status. However, with entrepreneurs investigated the underlying causes and the release of demographic data from various states, consequences of inequitable systems that led to such this consensus proved false. This report highlights a disparate impact on local black-owned businesses in the disparate impact the disease had on black-owned Durham, North Carolina, as a result of COVID-19. Data businesses. The goals of this project were to address from this study are key in developing bold policies and the following: how are black business owners and their strategies to assist black business owners, employees, employees coping with the present economic shocks; and underserved communities on a national scale. It analyze the government impact through the American is through this framework that we create a more just Rescue Plan, CARES Act and other legislative action; environment, not only for these businesses to survive, and examine strategies put forth by the private sector in but also for their long-term sustainability. support of black-owned businesses.
Durham’s Historic Black Wall Street
The historic marker located in downtown Durham the New South. The Hayti community was the epicenter reads, “In the early decades of the 1900s Durham of the majority of businesses and homes for African acquired a national reputation for entrepreneurship. Americans. Black people developed a cradle-to-grave Businesses owned by African Americans lined Parrish community where they could be born in a black hospital, Street. Among them were North Carolina Mutual Life attend black secondary schools, attend a black college, Insurance Company (1898) led by John Merrick and be employed by a black person, build a black-owned later Mechanics and Farmers Bank (1907) led by R.B. business, shop at black-owned businesses, and seek Fitzgerald and W.G. Pearson.” This historic marker is a the services from black people with skills any number symbol of the economic prowess and entrepreneurial of trades, deposit money in a black bank, purchase spirit that existed in Durham, North Carolina, at the turn life insurance, and be buried by a black mortician of the 20th century. While other cities including Tulsa, in a black cemetery. Durham became a model for Oklahoma; Richmond, Virginia; New Orleans, Louisiana; entrepreneurship, and self-help and the name Hayti was Chicago, Illinois; Detroit, Michigan; Baltimore, Maryland; meant to suggest the symbolism of the independent and Atlanta, Georgia, were also centers of Black black nation of Hayti and reflects the principles of race entrepreneurship, Durham was different. The Black Wall pride, self-help, and autonomy. Street in Durham lasted longer than in the other cities from the early 1900s to 1960s. From the beginning of the development of black business enterprise, there was a tendency towards Durham was not the usual southern city entrenched in cooperation between blacks and whites that was not a history of racial and class-based separation. It was seen in other southern cities. The rapid development sparsely populated by farmers until the railroad was of Durham as one of the industrial centers of North routed through in 1853. Tobacco warehouses sprang Carolina in the early twentieth century continued to give up along the tracks, creating a demand for an increase the Durham County Negro advantages not generally in black and white laborers. Jim Crow segregation available to the Negro in the South. Harry J. Walker provided the rules, written and unwritten, for the day-to- stated, “Thus the rapid growth of the population of the day interactions between black and white people as well town as an aspect of the industrial development brought as the geographical location in which both groups lived. together whites and blacks in a new relationship. The Blacks lived separately from whites in Hayti, East End, industries established in this period were owned and West End, Hyde Park, Brookstown, Emorywood, Buggy controlled by a group of whites who did not represent Bottom, Hicks Town, and a few other communities. At the planter class but were drawn from a white class of this time, Durham was a relatively progressive city in moderate means. For the first time Negroes were used
4 The Samuel DuBois Cook Center on Social Equity at Duke University as industrial workers and thus came into competition March 4, 1933, for the banking industry was instituted as with white labor in both tobacco and cotton mills” a national bank holiday. North Carolina Governor John (Walker, 1945). C. B. Ehringhaus initiated the state’s bank holiday on March 6. On March 13, 1933, Mechanics and Farmers Although racial tensions were high in the South, in officials led by bank President Charles C. Spaulding and Durham businessmen including Julian Carr, Washington cashier R. L. McDougald met with Honorable Gurney P. Duke, and James Duke, supported black businesses Hood, the state banking commissioner, to request the through financial investment and racial tolerance. These bank reopen. Their request was granted because of partnerships between blacks and whites in Durham the bank’s strength of management and soundness of distinguished Durham’s black business community assets. Mechanics and Farmers Bank became the first from other cities in the South. The concept of the bank in North Carolina—black or white—to reopen. “New South” lessened racial tensions in Durham as an Mechanics and Farmers and Wachovia Bank had the economic shift occurred in the South from an almost responsibility of servicing the Capital in Raleigh during exclusively agrarian society to one that embraced this period. This is an example of the behind the scenes industrial development. These newly emerging white maneuvering Spaulding, Wheeler, and other leaders businessmen encouraged blacks to help themselves in Durham operated with white powerbrokers, while economically while plantation owners in other areas leaders like Wheeler took a more politically vocal stance were economically dependent on a continuation of towards achieving equity for blacks as Chairman of feudalism. The new factory owners could profitably the Durham Committee on Negro (Black) Affairs. C.C. use blacks, encourage them to provide service, and Spaulding focused his attention strictly on maintaining encourage the development of the Black Middle Class. relations with white business and politicians. Their It made sense for whites to encourage the development actions were part of the way black business activism of early black businesses and services that whites would functioned in the South (Winford, 2014). Essentially, not provide for the emerging black middle class. A the white community looked to the black leadership to local business leader loaned one of the founders of ensure the black residents remained compliant under John Merrick, the Negro insurance company money to the rules of Jim Crow segregation and not be too start his career. Printing presses were given to blacks, vocal about fighting for equality. However, the black white bankers helped to get Mechanics and Farmers community continued to press for their rights as full bank chartered, and a hospital was donated to them. citizens. John Merrick was instrumental in securing funding from the Duke family to build Lincoln Hospital for African During its height, the Hayti business and residential Americans. The Duke family also built B.N. Duke district heralded over 600 homes and over 100 Auditorium on the campus of North Carolina Central businesses. Prominent African American businessmen, University (Bowman, 1963). intellectuals, politicians, and entertainers including Booker T. Washington, W.E.B. Du Bois, and E. Franklin At the state and federal levels, black leaders in Durham Frazier, recognized the substantial entrepreneurial leveraged their influence and business savvy to obtain efforts of African Americans. Booker T. Washington the necessary resources to maintain effective and stated “Durham is one of largest cities in North efficient business strategies with the assistance of white Carolina…the city of cities to look for prosperity of the state and federal support. After the 1929 crash of the Negroes and the greatest amount of friendly feeling stock market, the Great Depression led to the collapse between the two races of the South…Durham was a of many businesses and black businesses suffered the city of Negro enterprise (Independent, 1911).” W.E.B. greatest losses. As the depression loomed through the Du Bois regarded the relationship between blacks and 1930s, black-owned insurance companies and banks whites in Durham as an example of a solution to the race were a few of the businesses to survive the depression. problem where African Americans operated with brains On June 16, 1933, President Franklin D. Roosevelt and drive to accomplish the goal of autonomy (Du Bois, signed the Glass-Steagall Banking Reform Act, which 1912). E. Franklin Frazier noted, “when Harlem in New created the Federal Deposit Insurance Corporation. This York City became the Mecca of the 'New Negro” and new system ensured that depositors in member banks the center of the Negro Renaissance, the capital of the were given the security of knowing that if their bank black bourgeoisie was Durham, North Carolina. In this were to collapse, the federal government would refund city were located the most spectacular achievements of the money they deposited. Prior to the signing of the Negroes in the field of business enterprise: the North Glass-Steagall Banking Reform Act, President Franklin Carolina Mutual Life Insurance Company, the Mechanics D. Roosevelt’s all-encompassing New Deal plan on and Farmers Bank, the Bankers Fire Insurance Company,
Black Wall Street of the South: From Reconstruction to the Pandemic 5 and the National Negro Finance Corporation. These Practicing group politics led African Americans in enterprises had grown out of the pioneering efforts of Durham to found the Durham Committee on Negro men who had had little experience with business but Affairs, now the Durham Committee on the Affairs of had been inspired by the current faith, promulgated Black People, in 1935 at the Algonquin Tennis Club. by Negro leaders that business enterprise would open The Durham Committee used its influence to ensure the way to equality and acceptance in white America” that Black Durham residents had a voice in the political (Frazier, 1997). affairs of the city. The founders were Charles Clinton Spaulding, James E. Shepard, Rencher N. Harris, Black Durham businesses included insurance companies, W.D. Hill, R.L. McDougald, James T. Taylor, and Louis banks, manufacturing establishments producing E. Austin, who were referred to as “a committee of mattresses, hosiery, brick and iron articles and dressed influential Negroes.” From its inception, the Committee lumber. There was also a hotel, hospital, newspaper, has opened its membership to every Black citizen; it has law firms, barber shops, beauty salons, restaurants, required no dues from its members. The Committee pharmacies, real estate companies, construction vigorously pursued nine major categories of activity: companies, a movie theatre, printers, laundry cleaners, economics, politics, education, health, housing, youth, and grocery stores. religious freedom, human affairs, and civic affairs. The strength of the financial institutions and collaborative As a business leader, John H. Wheeler advocated for networks with whites provided an environment where blacks to move from low-wage, unskilled laborers to the Durham Committee could exert its political influence skilled, fair-wage labor positions in order to expand not only in Durham but also in state and national politics the purchasing power of black people and develop a and influential members of Black Durham including C.C. path that would contribute to the South’s economy. Spaulding, Asa Spaulding, and John H. Wheeler served In an address to Southern business leaders, Wheeler on state and national boards representing the interests emphasized that blacks made up one-fourth of the of black people. region’s 42,000,000 citizens the South had to improve their economic viability. Through full integration, blacks Urban Renewal devastated Durham Hayti community could be fully integrated into all phases of the South’s as redevelopment or rehabilitation of property in the economy. Wheeler further informed the business city took precedence as the result of a cooperative leaders that “in 1940, 750,000 Negro families owned effort by private developers and local government. The their own homes valued at one billion dollars, and, in the basic concept of urban renewal was to demolish and South alone, 700,000 Negroes owned 8,325,000 acres of rebuild major city areas that were seen as obstacles to farm land valued at $850,000,000 plus farm implements economic development. Created in 1958, the Durham worth $40,000,000.” Black businesses accounted for Redevelopment Commission oversaw seven projects of “approximately 32,000 retail stores having an annual urban renewal aimed at combating “urban blight,” one sales volume of approximately $100,000,000. In all, in Durham’s downtown, and the other six in historically about 60,000 business enterprises in over 200 different black neighborhoods including Hayti and Northeast lines [were] conducted by Negroes, among which [were] Central Durham. The decision was made to build Hwy 55 life insurance companies reporting total assets of 147 directly through the Hayti business district and more than $45,000,000 and total insurance in force of residential community to make way for the development approximately $600,000,000” (Wheeler, 1945, 2014). of the Research Triangle Park (RTP). As the tobacco and Just eighty years after the abolition of slavery, African cigarette manufacturing industries were ending, the Americans made exceptional strides in gaining wealth city was looking for a way to provide jobs and remain despite challenges faced during segregation. a relevant part of the growing technology industry. Beginning in 1961, the initial completion was supposed The Hayti community flourished in the segregated to take 10 years, but, to this day, all of the projects have South as a result of the partnerships developed with not been completed. Over 500 homes were lost and the white businessmen and the intentional effort black majority of the black owned businesses were destroyed, Durham residents put into practicing group economics never to be rebuilt. As anchor financial institutions, North and group politics. Group economics was seen as they Carolina Mutual Life Insurance Company and Mechanics supported black owned businesses, both small and and Farmers Bank survived; however, over 500 residential large, that were in some instances also supported with homes were lost along with the majority of businesses white investment. The money spent in these businesses that existed on Fayetteville and Pettigrew streets. almost never left the black community and supported the development of youth programs, social activities, schools, and other businesses.
6 The Samuel DuBois Cook Center on Social Equity at Duke University Only a few businesses that existed during Durham’s To date, there are ongoing efforts to reinstitute a Black Wall Street era survived urban renewal and program to assist African Americans to actively engage continue to exist today. Those businesses include an in entrepreneurial efforts to rebuild Durham’s “Black insurance company, bank, funeral homes, an auto Wall Street.” The final anchor institution is Mechanics service center, restaurant, barbershop, and a political and Farmers Bank, which saw an increase in account organization. These businesses listed below were able holders resulting from the 21st century social justice to adapt and relocate to spaces and continue to serve movements that focus on supporting black businesses. the Durham community. They can be categorized as The North Carolina Mutual Life Insurance Company either anchor institutions or sustainable businesses. is currently under the control of regulators and is Anchor institutions include NC Mutual Life Insurance awaiting a decision as it remains in litigation with a New Company and Mechanics and Farmers Bank; they York CEO that has been charged with defrauding the provide the financial base that allows them to employ company. There are a number of well-established black large numbers of people, provide a needed service, or owned businesses in Durham that include restaurants, provide loans to develop or sustain a business or home. a bed and breakfast, apparel stores, accountants, law An anchor institution may also have an economic impact firms, dentist offices, automotive services, as well as at the state and national levels. These sustainable skilled trade service providers. The 70-year prominence businesses are defined as meeting a specific need of Durham’s Black Wall Street gives hope that it will of the community without compromising the ability return once again and bring new levels of financial of future generations to meet their needs. It must be and political collaboration and tolerance to the noted that the term sustainability does not only apply Durham community. to environmental efforts. A listing of the surviving businesses that were developed during Durham’s Black Wall Street are below:
North Carolina Mutual Life Insurance Company, Inc. (1898) Scarborough-Hargett Celebration of Life Center, Inc. (1871 and opened in Durham in 1906) Mechanics and Farmers Bank (Chartered in 1907 and opened in 1908) Union Insurance and Realty Company (1924) Durham Committee on the Affairs of Black People (1935) Speight’s Auto Service Center (1938) Burthey Funeral Service, Inc. (1946) The Chicken Hut Restaurant (1957) Fisher Memorial Funeral Parlor (1963) Special Consideration: Friendly Barbershop and Durham Business and Profession Chain (1938)
Black Wall Street of the South: From Reconstruction to the Pandemic 7 Data and Methodology
The 2019 City of Durham Business Survey provides a How business owners and their employees are coping pre-COVID-19 snapshot of the black-white differentials with economic effects initiated by the COVID-19 on full time employees, annual business revenue, pandemic. business age, city contracts, funding sources, and barriers to profitability. This dataset has an A note on sampling: For the qualitative part of this overrepresentation of employer businesses, due to study, we employ case-study logic, rather than sample- the difficulty in capturing non-employer businesses in based logic, in our approach to the sequential in-depth national datasets. We look at data on the Paycheck interviews (Small, 2009). Case-study logic dictates each Protection Program (PPP) (established by the CARES subsequent interview, or case, offers an “increasingly ACT and implemented by the Small Business accurate understanding of the questions at hand” Administration - SBA) for information on loan amounts, (Small, 2009, pp. 24-25). Researchers thus continually lenders, and loan approval dates. Corresponding refine and re-evaluate their understanding of the analytical findings are presented in Section 6. mechanisms at play in answering the core research questions of the study and conclude the interview Additionally, a Directory is found in the Appendices process only once saturation is attained, e.g., no novel that lists black or African American-owned businesses patterns emerge via interviews. A case-study approach in Durham. This list was generated by collecting prioritizes saturation over representation, and allows information from different sources online. We compiled a set of cases to make important contributions to this non-exhaustive list using online sources such as knowledge by underscoring that the importance of a Discover Durham, Black Owned Biz, The Durham Box, single case “lies in what it tells us about society as a as well as the PPP dataset. Businesses on these lists whole rather than about the population of similar cases” identify as black-owned, and the business owners of (Small, 2009, p. 20). these businesses identify as black or African American. It should be noted these public databases may not in Research participants for the qualitative section of each instance represent businesses owners’ affirmative the study were selected from industries or sectors in consent of inclusion or self-identification as a black- which black-owned businesses in Durham, NC, are owned business. most represented according to the data from the 2019 Durham Business Survey and our Durham Black-Owned The qualitative component of this study utilizes in-depth Business Directory. interviews with eight black business owners (n=8) and two black CEOs (n=2) in Durham, NC, (N=10) to present In addition, we use data on Paycheck Protection a set of 10 cases together with statistical analyses of Program (PPP) Loans by Racial and Ethnic Groups in secondary data concerning business ownership directly the City of Durham in 2020 in creating the qualitative preceding and following the onset of the COVID-19 sample. PPP data reflect the distribution of business pandemic. Discussion and analysis from the qualitative type and number of jobs by self-reported black business component of the study are presented in Sections owners in Durham. Specifically, two corporations were 5 and 6. We utilize this mixed-methods approach, sampled with markedly divergent structures from other or triangulation, “wherein different kinds of data are business types, insofar as their CEOs are employees collected to measure the same phenomenon” (Small, of the corporation and paid a salary annually, with 2011, p. 63) to best assess: shareholders and board of directors. A concerted effort was made to avoid the sampling The influence of COVID-19 on black-owned error of survivorship bias; as such, owners of firms either businesses and surrounding communities, as well as temporarily or permanently closed since the onset of the the ripple effects throughout the local economy, COVID-19 pandemic were contacted, both by phone and email, to participate. Firms founded and established The federal government’s impact through the CARES following the start of the pandemic were similarly Act (or PPP) and other legislative action, as well as included in qualitative-sample creation. private-sector interventions, and
8 The Samuel DuBois Cook Center on Social Equity at Duke University For the purposes of this study, the onset of the A methodological approach was taken in conducting pandemic is bounded by the March 10, 2020, issuance these in-depth interviews which enabled researchers of Executive Order 116 in North Carolina declaring a to: 1) study power and inequality; 2) join critical analysis state of emergency to prevent the spread of COVID-19. with people’s lives; and 3) theorize action (Charmaz, Prior to interview-requests and scheduling, a complete 2017, p.16). The qualitative component of this study proposal (including interview schedule, participant- likewise prioritizes three frameworks: 1) “mechanisms: consent form, and interview-request letter) was reviewed seeing racism as a fundamental cause of inequality” to and approved by the Internal Review Board (IRB) of “examine structural stability and changing mechanisms Duke University. in a single framework,”; 2) “spatial: the settler-colonial framework draws attention to material conditions Although participants received no direct monetary across time and space and sees racial domination as benefits in the form of compensation, the interviews an ongoing process of distribution of land and labor,”; ideally offered an opportunity for business owners to 3) “agentic: the notion of racialized agency examines reflect and voice their experiences as business owners individual relations of mobility—and the crucial ability and CEOs in Durham during the COVID pandemic. to structure one’s time—within a larger racialized These semi-structured, in-depth qualitative interviews structure” (Seamster & Ray, 2018, p. 329). The qualitative were conducted via telephone and/or Zoom, particularly component of this study is indebted to the expertise in light of the ongoing nature of the pandemic, and and insight of business-owner and CEO participants; lasted approximately one-hour. Interview transcripts with their contributions of time and specialized knowledge business owners and CEOs were coded for theme and allow the qualitative component to join the statistical variation in their stories concerning business ownership analyses of secondary data to render a more robust during COVID-19. picture of black business ownership in Durham during the COVID-19 pandemic.
Black Wall Street of the South: From Reconstruction to the Pandemic 9 Portrait of the Business Ownership Ecosystem in Durham
There are different ways of categorizing businesses. employees whereas a “small business” is one with 500 The most common categorizations tend to classify employees or fewer (U.S. Small Business Administration, businesses as either (1) micro vs. small or (2) non- SBA). Nationally, 99.9% of all businesses meet the employer vs. employer. According to the U.S. Census criteria for small businesses (SBA, 2019). Bureau, a “micro-business” is one with one to nine
FIGURE 1. Distribution of Establishments in Durham, North Carolina, 2021
Ninety-nine percent of Durham-County employer firms were small businesses (U.S. Census Bureau, 2019)
A “non-employer business” is one with no paid Census Bureau’s definition of “micro-businesses,” 70 employees other than the owner while an “employer percent of Durham County employer firms had nine or business” is one with at least one paid employee other fewer employees in 2018. Of note, the City of Durham than the owner. The majority of firms in the United makes up approximately 85 percent of Durham County’s States are non-employer (U.S. Census Bureau, 2019). total population (Bull City Rising, 2021). The distribution In 2018, Durham County was home to approximately of establishments in Durham can be observed in the 7,600 employer-businesses and 26,150 non-employer data heat map in Figure (1) accessed using the Durham firms (U.S. Census Bureau, 2019). Ninety-nine percent of Business Data Portal (2021). Durham-County employer firms were small businesses (U.S. Census Bureau, 2019). In keeping with the U.S.
10 The Samuel DuBois Cook Center on Social Equity at Duke University TABLE 1: Industries for 2018 by Gender and Racial Groups in the City of Durham (%)
For the purposes of this study, the North American Analyzing race and gender representation across Industry Classification System (NAICS) provides a industry is important. To test whether the industry rank standard for categorizing business establishments. distributions for female and male business owners are Using the 2-digit NAICS classification, economic the same, we conducted a Spearman rank correlation activities are divided into 20 sectors. Nationally, the coefficient test (see Table 1.1). The steps taken are the four most-common sectors for employer-businesses following. We first rank each industry based on the are Professional, Scientific, and Technical Services; proportions provided in Table 1 for each of the racial- Construction; Health Care and Social Assistance; and gender groups. We then proceed to calculate the Retail Trade (U.S. Census Bureau, 2019). About one in correlation coefficients between male and female for every five black-owned businesses tend to fall under each of the racial groups. We also derive the number of niche industries, frequently classified using the NAICS ranks (or industries), t-statistics, degrees of freedom, and “Other Services” categorization. This sector includes the p-values. We can infer, based on the results, that the the provision of services not elsewhere specified, such industry rank distributions are highly correlated for both as advocacy, personal care, grant making, repairs, male and females at the 5-percent or 1-percent level death care, and other personal services. However, the (given the p-value is lower than 0.0001). We do find, majority of black-owned businesses in Durham fit neatly however, that the rank distribution correlation is lower within NAICS categorizations as shown in Table 1, with between black male and female owners (correlation of Professional, Scientific, and Technical Services and 0.70) than that of white male and female owners (0.86). Health Care and Social Assistance as the top two sectors for both male and female black business owners.
Black Wall Street of the South: From Reconstruction to the Pandemic 11 TABLE 1.1: Testing the Rank Distribution of Industries Representation by Gender and Racial Groups of Ownership
By Gender and Racial Groups
All Businesses Black White
Revenue Male Female Male Female Male Female
(01) Agriculture, Forestry, Fishing, 17 16 17 17.5 16.5 13.5 and Hunting
(02) Mining 20.5 20.5 17 17.5 20.5 20.5
(03) Utilities 18.5 19 17 17.5 18.5 17
(04) Construction 4 6 6.5 7.5 4 8.5
(05) Communications 13 16 10.5 17.5 13.5 13.5
(06) Manufacturing 8 12 17 17.5 8 11.5
(07) Wholesale Trade 12 11 10.5 17.5 12 8.5
(08) Retail Trade 3 3.5 3.5 6 3 4
(09) Transportation and Warehousing 10 16 8 12 10 17
(10) Information 15.5 13 17 12 15 17
(11) Finance and Insurance 6.5 7 6.5 4.5 6 11.5
(12) Real Estate and Rental Leasing 5 8 2 9.5 5 5
(13) Professional, Scientific, and Technical 2 2 3.5 2.5 2 2 Services
(14) Management of Companies 18.5 16 17 17.5 18.5 17 and Enterprises
(15) Administrative, Support, Waste 15.5 16 10.5 12 16.5 17 Management, Remediation Services
(16) Educational Services 11 5 10.5 2.5 11 6
(17) Health Care and Social Assistance 6.5 3.5 5 4.5 7 3
(18) Arts, Entertainment, and Recreation 14 9 17 7.5 13.5 8.5
(19) Accommodation and Food Services 9 10 17 9.5 9 8.5
(20) Public Administration 20.5 20.5 17 17.5 20.5 20.5
(21) Other 1 1 1 1 1 1
Spearman Rank Correlation Coefficient 0.89 0.70 0.86
N 21 21 21
T-statistics 8.74 4.33 7.43
Degrees of Freedom 19 19 19
p-value 0.00 0.00 0.00
Next, we provide additional descriptive findings based on the 2019 City of Durham Business Survey to provide a snapshot of business ownership in the city directly preceding the COVID-19 pandemic.
12 The Samuel DuBois Cook Center on Social Equity at Duke University 3.1 Racial Disparities in Durham’s Business Owner Characteristics Pre-COVID-19
According to the U.S. Census Bureau’s Population In terms of business characteristics after the start-up Estimates Program (PEP), in 2019 Durham, North stage, we observe racial disparities in enterprise size, Carolina, had a population that was 38.7 percent black. opportunities, and obstacles in Durham, North Carolina. Yet, data from the 2018 Annual Business Survey of all A total of 754 business owners in Durham were included the business owners of employer businesses in the City in the 2019 Durham Business Survey. Some questions of Durham indicates that only 4.7 percent were black. in the survey allowed for business owners to select Nationally, black or African Americans made up 13.4 multiple answers. percent of the U.S. population, but only 1.7 percent of employer business owners across the country were black for the same year. Consistent with national trends, black Americans in the city of Durham were underrepresented as business owners of employer-firms prior to COVID-19 disproportionately.
Starting a Business
Prior to the COVID-19 pandemic, the most common seeking to increase household income. Conversely, reason for starting or purchasing a business (see Table 2) white business owners were 88 percent more likely to was to increase household income, and black business start a business because they were continuing a family owners were nearly 37 percent more likely than their business that existed previously. white counterparts to enter into business ownership
TABLE 2: Reasons for Starting/Purchasing a Business in Durham, 2019 (%, multiple answers allowed)
Reasons All Businesses Black White
To increase household income 28.1 35.8 26.2
Needed flexible work arrangement 12.7 16.0 11.6
Continuing a family business 11.7 6.2 13.4
Lack of employment options 6.0 9.9 4.1
Innovate new product or service 22.3 22.8 22.8
Other 19.2 9.3 22.0
Total 100.0% 100.0% 100.0%
Number of Responses 855 162 614
Black Wall Street of the South: From Reconstruction to the Pandemic 13 Size of the Business: Number of Full-Time Employees and Total Revenue
The business size disparity is best captured by the business owners were more likely than their white number of full-time employees as well as the annual counterparts to have a smaller enterprise represented total revenue of the business. by the number of full-time employees. Table 3 illustrates the percentage of 128 black business owners and 563 As depicted in Figure (2), most business owners in white business owners that fell into each of the full- Durham (regardless of race) had between zero and time employment categories prior to the COVID-19 five employees in 2019. Comparatively, however, black pandemic.
FIGURE 2. Number of Full-Time Employees in Durham, 2019 (%)
According to the City of Durham Business Survey business owners in Durham had more than 50 full-time (2019), 29.7 percent of black business owners and only employees. These findings align with national studies 11.5 percent of white business owners had no full- that suggest that non-employer firms are much more time employees in that year. Black business owners prevalent amongst black-owned businesses (Darity et were 2.6 times more likely than white business owners al., 2019). to have no full-time employees. Moreover, no black
14 The Samuel DuBois Cook Center on Social Equity at Duke University TABLE 3: Full-Time Employees by Racial Group of Ownership in Durham, 2019 (%)
Full-Time Employees All Businesses Black White
0 14.5 29.7 11.5
1–5 40.7 43.0 39.6
6–10 15.4 14.1 16.2
11–20 13.1 8.6 14.0
21–50 9.9 3.1 11.5
51–99 2.1 0.0 2.5
100–499 2.8 0.0 3.6
500–999 0.0 0.0 0.0
1000–4999 0.1 0.0 0.2
5000 or more 0.3 0.0 0.4
No Answers 1.1 1.6 0.5
Total 100.0% 100.0% 100.0%
Number of Businesses 754 128 563
At the intersection of race and gender, we find that percent of black female business owners had zero there were more black female business owners in the employees, while the proportion was only 9 percent survey than black male. Black female business owners for white male business owners. This means that black constituted the group with the largest proportion of women were 3.5 times more likely than white men to businesses that were non-employer. Specifically, 31.9 own a non-employer business.
Black Wall Street of the South: From Reconstruction to the Pandemic 15 TABLE 4: Full-Time Employment and Business Ownership by Gender and Racial Groups in the City of Durham in 2019 (%)
By Gender and Racial Groups
All Businesses Black White
Full-time Employees Male Female Male Female Male Female
0 11.2 22.2 27.6 31.9 9.0 19.3
1–5 40.3 41.7 50.0 37.7 39.0 41.4
6–10 15.7 14.8 8.6 17.4 16.8 14.3
11–20 14.0 11.7 6.9 10.1 14.7 12.1
21–50 10.7 8.7 3.4 2.9 11.6 11.4
51–99 3.1 0.0 0.0 0.0 3.3 0.0
100–499 3.7 0.4 0.0 0.0 4.5 0.7
500–999 0.0 0.0 0.0 0.0 0.0 0.0
1000–4999 0.2 0.0 0.0 0.0 0.2 0.0
5000 or more 0.2 0.4 0.0 0.0 0.2 0.7
No Answers 1.0 0.0 3.4 0.0 0.7 0.0
Total 100% 100% 100% 100% 100% 100%
Number of Businesses 516 230 58 69 423 140
Correspondingly, black female business owners were the group with the lowest percentage of businesses having 21 employees or more in 2019. These findings suggest that, prior to the COVID-19 pandemic, non-employer businesses played a larger role amongst black women than they did in any other groups at the intersection of race and gender. This finding aligns with the fact that in 2012, black women business owners of non-employer firms made up nearly 60 percent of all black business owners in the U.S. (Survey of Business Owners, 2012).
16 The Samuel DuBois Cook Center on Social Equity at Duke University TABLE 4.1: Testing Rank Distribution of Full Employment by Gender and Racial Groups of Ownership
By Gender and Racial Groups
All Businesses Black White
Full-time Employees Male Female Male Female Male Female
0 4 2 2 2 5 2
1–5 1 1 1 1 1 1
6–10 2 3 3 3 2 3
11–20 3 4 4 4 3 4
21–50 5 5 5.5 5 4 5
51–99 7 10.5 10 9.5 7 10.5
100–499 6 7.5 10 9.5 6 7.5
500–999 12 10.5 10 9.5 12 10.5
1000–4999 10.5 10.5 10 9.5 10.5 10.5
5000 or more 10.5 7.5 10 9.5 10.5 7.5
No Answers 9 10.5 5.5 9.5 9 10.5
Spearman Rank Correlation Coefficient 0.88 0.93 0.86
N 11 11 11
T-statistics 5.52 7.76 4.99
Degrees of Freedom 9 9 9
p-value 0.00 0.00 0.00
We use a Spearman rank correlation coefficient test to examine whether the full-time employment distributions for female and male business owners share a similar distribution, see Table 4.1. We follow the same steps described above. The results show that the full-time employment rank distributions are highly correlated for both male and females at the 5-percent or 1-percent level (given the p-value is lower than 0.0001). The full-time employment distributions for black male and female business owners tend to be more correlated (0.93) than that of white male and female owners (0.86).
Black Wall Street of the South: From Reconstruction to the Pandemic 17 TABLE 5: Business Revenue by Racial Group in Durham, 2018 (%)
Business Revenue All Businesses Black White
$25,000 or less 6.6 18.8 3.9
$25,001 – $50,000 4.5 10.9 2.8
$50,001 – $100,000 4.5 7.8 3.6
$100,001 – $250,000 8.9 15.6 7.5
$250,001 – $500,000 10.5 12.5 9.9
$500,001 – $1,000,000 10.6 7.0 11.7
$1,000,001 – $5,000,000 16.2 7.0 19.2
$5,000,001 – $10,000,000 3.6 0.8 4.3
$10,000,001 – $100,000,000 3.6 1.6 4.3
Unsure 16.2 7.8 17.9
No Answer 14.9 10.2 14.9
Total 100.0% 100.0% 100.0%
Number of Businesses 754 128 563
In terms of total revenue, we find that, in 2018, 37.5 percent of all black business owners made $100,000 or less in annual business revenue while the proportion for white business owners was only 10.3 percent. At the upper end of the scale, 9.4 percent of black business owners compared with 39.5 percent of white business owners in Durham made between $1 million and $100 million in annual business revenue, as indicated in Table 5. Black business owners in Durham made significantly less in business revenue in 2018 than their white counterparts and were far less likely to make revenue above $1 million, see Figure (3).
18 The Samuel DuBois Cook Center on Social Equity at Duke University FIGURE 3. Annual Business Revenue in Durham, 2019 (%)
TABLE 5.1: Revenue for 2018 by Gender and Racial Groups in the City of Durham (%)
By Gender and Racial Groups
All Businesses Black White
Revenue Male Female Male Female Male Female
$25,000 or less 4.5 11.7 15.5 21.7 2.8 7.1
$25,001 – $50,000 3.5 7.0 13.8 8.7 1.9 5.7
$50,001 – $100,000 3.5 7.0 5.2 10.1 2.8 5.7
$100,001 – $250,000 7.6 12.2 17.2 14.5 6.4 10.7
$250,001 – $500,000 10.1 11.7 15.5 10.1 9.0 12.9
$500,001 – $1,000,000 11.4 9.1 8.6 5.8 12.1 10.7
$1,000,001 – $5,000,000 17.1 14.8 6.9 7.2 18.9 20.0
$5,000,001 – $10,000,000 4.8 0.9 1.7 0.0 5.2 1.4
$10,000,001 – $100,000,000 4.5 1.7 3.4 0.0 4.7 2.9
Unsure 17.2 13.9 8.6 7.2 18.2 17.1
No Answer 15.9 10.0 3.4 14.5 18.0 5.7
Total 100% 100% 100% 100% 100% 100%
Number of Businesses 516 230 58 69 423 140
Black Wall Street of the South: From Reconstruction to the Pandemic 19 The descriptive analysis of the intersection of race and female (7.1 percent) and black male business owners gender (Table 5.1), shows that in 2018 approximately (15.5 percent). At the upper end, we find that 7.2 percent one of every five businesses (or 21.7 percent) led by a of black female business owners make more than one black female business owner made less than $25,000 in million in revenue, compared to 12 percent for black total revenue. A significantly higher representation in male owners and 24.3 percent for white female owners. the lowest revenue category when compared to white
TABLE 5.2: Testing Rank Distribution of Business Revenue by Racial and Gender Groups of Ownership
By Gender and Racial Groups
All Businesses Black White
Revenue Male Female Male Female Male Female
$25,000 or less 8.5 4.5 2.5 1 9.5 6
$25,001 – $50,000 10.5 8.5 4 6 11 8
$50,001 – $100,000 10.5 8.5 8 4.5 9.5 8
$100,001 – $250,000 6 3 1 2.5 6 4.5
$250,001 – $500,000 5 4.5 2.5 4.5 5 3
$500,001 – $1,000,000 4 7 5.5 9 4 4.5
$1,000,001 – $5,000,000 2 1 7 7.5 1 1
$5,000,001 – $10,000,000 7 11 11 10.5 7 11
$10,000,001 – $100,000,000 8.5 10 9.5 10.5 8 10
Unsure 1 2 5.5 7.5 2 2
No Answer 3 6 9.5 2.5 3 8
Spearman Rank Correlation Coefficient 0.67 0.58 0.65
N 11 11 11
T-statistics 2.72 2.12 2.6
Degrees of Freedom 9 9 9
p-value 0.02 0.06 0.03
The Spearman rank correlation coefficient test results the distributions for all male and female owners are for the rank distribution of business revenue by racial correlated (0.67) and statistically significant with p-value and gender group of ownership are shown in Table 5.2. of 0.02. This indicates that revenue generation is a main The results show that black female and male business source of variation in terms of gender for black business owners do not share similar revenue rank distributions. owners. The Spearman rank correlation coefficient test The distributions are correlated (0.58) but not statistically findings show this is not the case for white business significant at the 5-percent or 1-percent level (given the owners. p-value is 0.06). This is an interesting result, given that
20 The Samuel DuBois Cook Center on Social Equity at Duke University Business Age: Longevity and Dynamics
According to the U.S. Bureau of Labor Statistics, about surveys suffer from survival bias. Based on the 2019 20 percent of U.S. small businesses fail within the first City of Durham Business Survey, the most common year and about a third fail within the first two years. age of businesses in 2019 was between 20 and 50 By the end of the first five years, almost 50 percent of years, regardless of the race of the business owner. Yet, small businesses fail. These failure rates are surprisingly businesses owned by black entrepreneurs in Durham consistent through time and across national geography were generally younger than those owned by white (similar statistics are found for North Carolina).1 entrepreneurs (as indicated in Table 6 and illustrated in Figure (4)). As mentioned earlier, because of the difficulty of sampling businesses that already close, most business
Table 6: Business Age by Racial Group in Durham, 2019 (%)
Business Age All Businesses Black White
0-2 4.9 10.2 3.4
3-5 8.4 16.4 6.4
6-10 10.9 17.2 9.9
10-20 21.5 18.8 21.5
20-50 30.6 25.0 32.5
50-100 4.1 0.8 5.3
100 1.6 0.8 2.0
No Answers 18.0 10.9 19.0
Total 100.0% 100.0% 100.0%
Number of Businesses 754 128 563
Approximately 44 percent of black business owners established in the same time period. However, given reported owning businesses that were ten years old that younger firms are more likely to fail, young black- or younger, while only 19.7 percent of white business owned businesses are more likely to falter. In contrast, owners had businesses in a similar age range. 61.3 percent of white business owners owned firms that Therefore, the proportion of businesses originally were 10 years of age or older as of 2019. In short, in established between 2009 and 2019 and owned by 2019 more than half (61.3 percent) of all white business black business owners was roughly twice the proportion owners owned firms originally established prior to 2009. of the businesses owned by white business owners
1 See The U.S. Bureau of Labor Statistics website on Business Employment Dynamics for national and state statistics. https://www.bls.gov/bdm/ bdmage.htm#NChttps://www.bls.gov/bdm/bdmage.htm#NC
Black Wall Street of the South: From Reconstruction to the Pandemic 21 FIGURE 4. Age of Business in Durham, 2019 (%)
TABLE 7: Business Age by Gender and Racial Groups in the City of Durham in 2019 (%)
By Gender and Racial Groups
All Businesses Black White
Business Age Male Female Male Female Male Female
0–2 3.7 7.8 9.4 13.3 3.7 5.3
3–5 7.0 11.7 17.0 20.0 7.4 9.1
6–10 9.9 13.0 20.8 16.7 11.7 13.6
10–20 19.8 26.1 20.8 21.7 23.8 33.3
20–50 31.2 30.4 30.2 26.7 42.0 36.6
50–100 5.4 1.3 1.9 0.0 8.3 2.3
100+ 1.9 0.9 0.0 1.7 3.1 0.8
No Answers 21.1 8.7 0.0 0.0 0.0 0.0
Total 100% 100% 100% 100% 100% 100%
Number of Businesses 516 230 53 60 324 132
22 The Samuel DuBois Cook Center on Social Equity at Duke University When we look at the intersection of race and gender, with a long tenure) being the least common type of we find that nearly half of all black female business business in Durham regardless of race and gender, black owners had firms that were ten years old or younger, as women represent the group of business owners with the of 2019 (Table 7). More specifically, we find that black second largest proportion (after white male business women represent the group with the largest proportion owners) with businesses that fall into the category of a of businesses that are two years or younger at 13.7%. business age of 100 years or older. Paradoxically, despite “legacy businesses” (businesses
City Contract Bids and Funding Sources
Some of the top reasons for small business failure are business owners that responded to a City of Durham cash flow issues.2 Hence, businesses with government bid or proposal, only 37.5 percent of them ended with contracts tend to increase their survival rate and a successful contract. White business owners who longevity. Compared to white business owners, black responded to a city bid or proposal, on the other hand, business owners were less likely to have a successful had a 71 percent success rate. All told, white business bid or proposal with the City of Durham in 2019. Out of owners in Durham were nearly 91 percent more likely the 754 business owners in the survey, only 94 indicated than black business owners to gain a contract for their they had responded to a City of Durham bid or proposal businesses. in that past year. Table 8 shows that of the 16 black
TABLE 8: Successful City Contracts by Racial Group in Durham, 2019 (%)
Success of Bid or Proposal All Businesses Black White
Yes 64.9 37.5 71.6
No 35.1 62.5 28.4
Number of Businesses 94 16 67
Compared to their white counterparts, black business As Table 9 shows, 11.1 percent of all white business owners were more likely to receive business funding owners in Durham in 2019 received business loans in 2019 from government grants, personal savings from a bank or financial institution while 8.3 percent belonging to the business owner, personal loans from of black business owners received funding from the family members or friends, and credit cards. However, same sources. Conversely, compared to their white when it came to tapping into personal home equity counterparts, black business owners were approximately loans and business loans from a bank or financial twice as likely to use their personal savings or receive institution, black business owners were less likely to use personal loans from family members or friends as that as a source. business funding sources, further highlighting the financial-services gap in the black business community in Durham and supporting the idea that black business owners are largely undercapitalized.
2 See https://www.nav.com/small-business-statistics/
Black Wall Street of the South: From Reconstruction to the Pandemic 23 TABLE 9: Credit and Funding Sources by Racial Group in Durham, 2019 (%, multiple answers allowed)
Funding Sources All Businesses Black White
Personal savings of owner 15.4 23.8 13.1
Personal loans from family/friend(s) 2.6 3.9 1.8
Personal home equity loan 2.5 1.5 2.6
Credit cards 13.4 15.5 12.3
Business loan from a bank or financial institution 10.2 8.3 11.1
Business profits and/or assets/working capital 31.3 29.6 32.9
Asset backed loans 2.0 1.5 2.2
Government grants/funding 2.4 3.4 2.4
Equity financing/venture capital 1.6 0.5 2.0
Don't know 18.6 12.1 19.7
Total 100.0% 100.0% 100.0%
Number of Responses 1292 223 962
As displayed in Table 10, survey respondents were also asked to identify barriers to their businesses’ profitability in 2019. Respondents could elect multiple responses. Regardless of race, the most common barrier to a business’ profitability was the “high cost of doing business.” While only 2.2 percent of white business owners in Durham indicated that having access to credit was a barrier, 10.8 percent of black business owners identified that as an obstacle to profitability.
TABLE 10: Barriers to Profitability by Racial Group in Durham, 2019 (%, multiple answers allowed)
Barriers All Businesses Black White
Government regulations 7.2 5.8 7.1
Taxes 12.0 11.7 12.0
Access to credit 4.3 10.8 2.2
Paying off debt 8.5 10.3 8.1
High costs of doing business 16.3 19.7 15.4
Access to markets 3.9 5.8 3.4
Costs of goods sold 5.4 4.0 6.0
Hiring/retaining qualified staff 16.1 12.1 17.1
Other 26.2 19.7 28.8
Total 100.0% 100.0% 100.0%
Number of Responses 1202 223 865
24 The Samuel DuBois Cook Center on Social Equity at Duke University Unpacking the Impact of COVID-19 on Black-Owned Businesses in Durham
The primary purpose of this part of the study is to data: (1) Infrastructural, Operational, and Technological explore the experiences of Durham's black business Experiences, (2) Psychological Experiences, (3) Social owners in the midst of the COVID-19 pandemic. Using Experiences, and (4) Funding Experiences. These supporting evidence from semi-structured in-depth categories are presented in Sections 4.1, 4.2, 4.3, interviews and a short questionnaire, this section and 4.4, respectively. The participants’ stories reveal describes how COVID-19 has shaped the business common patterns across their experiences, despite experience from the perspective of eight black business belonging to different business industries, business owners and two black CEOs in Durham to present a types, business size categories, and gender identities. set of 10 cases. Four categories emerged from these
4.1 Infrastructural, Operational, and Technological Experiences: A Changing Landscape
Directly preceding the state’s declaration of a state of Mass-gathering restrictions and social-distancing emergency on March 10, 2020, North Carolina had the requirements presented barriers to business operations, sixth highest number of black business owners per-state shifted the physical landscape of business ownership, in the country (Mills & Battisto, 2020, pp. 7-8). Between and changed the trajectory of business plans. On March February and June 2020, the state experienced a net- 14, 2020, K-12 closed schools statewide. One set of decline in active black business ownership rate: the business owners in the food service industry found number of active black business owners fell 37.2% from themselves integrating their workspace into a setting February to May 2020, and then rose 30.5% from May that would allow them to watch over their own children: 20th to June (Mills & Battisto, 2020, p. 8). “If you want to work, bring your kid…that space is for our kids.” They acknowledged that “many people in While reflecting on the impact of the COVID-19 [their] industry cannot afford childcare.” As a mother pandemic on their business operations, participants herself, one participant acknowledged that she had revealed that they underwent common operational to be considerate of concerns that her all-women staff shifts as required by North Carolina’s Executive Orders. had with school closures and the unexpected demand Participants either closed their active locations, for schooling to take place at home. These factors redefined the nature of their workspaces, or gave up on encouraged her to be more empathetic towards her their plans of opening up a physical location altogether. employees’ challenges and moved her to adjust their One owner of a business in the arts and entertainment work schedules. This example illustrates that business industry that relies on “bringing people together” owners became more flexible with their workspace and reported being shut down for over a year after the initial work hours in response to the pandemic. state of emergency. Similarly, a woman business owner in the medical industry stated that her practice had Business owners also said that they implemented “closed down for two months.” increased safety precautions to make themselves, their employees, and their customers feel safe. These safety One woman business owner in the field of spiritual measures (and the efforts needed to ensure them) healing experienced a setback in her plans to sign a figured largely in the operational and technological lease for a physical store location: “I had this vision changes that business owners navigated during the for my business to go one way, and, literally a couple pandemic. A wife and husband of a business in the of days before I was supposed to sign the lease, food-services industry stated the following was true everything shut down.” She described her work as about their increased use of masks and gloves during “very front-facing” with clients that “prefer that personal the pandemic: “They were such a show that we were interaction.” Societal attempts to prevent the spread handling food with [care]. It helps appeal to the public.” of COVID-19 forced her to “get creative in how [they] service people” through online workshops.
Black Wall Street of the South: From Reconstruction to the Pandemic 25 One business owner reflected on how the media’s services, to the point where their firm saw a “30 to 35% emphasis on staying home clashed with his general increase in the utilization of online mobile banking...and business aims and drove him to make systematic electronic banking services.” Yet, he also recognized adjustments: “The media is telling everybody to that digital and online tools present “a tale of two cities” ‘stay inside, stay inside, don't go outside.’ And we due to varying technological capabilities to provide need people to come outside to support us…” This online services across businesses. owner adopted new kinds of protocols, policies, and procedures which integrated Personal Protective One of the biggest challenges to black-owned businesses Equipment (PPE) into daily operations. The rising that emerged during the in-depth qualitative interviews demand for precautions, shifting safety norms, and was “stay[ing] on top of all the information” useful for new business compliance standards at the onset of the coping with the pandemic. New information on laws, pandemic drastically shifted the landscape of business opportunities, regulations, and norms presented a labor ownership for business leaders in Durham. burden on owners. Business owners reported the urgency of having to keep up with rapidly changing information, In addition to safety adjustments, many participants particularly in light of the “first-come, first-served” nature acknowledged that adapting to virtual service delivery of many government programs and forms of funding added labor burdens for them as owners. A business support (Humphries et al., 2020). Respondents, in some owner in the educational services industry stated that the cases, reported being met with an overabundance of following was true of her experience: “The virtual learning information in the form of “webinars and seminars,” is something that really almost took me out.” Another and reflected on the near impossibility of utilizing business owner in the food services industry commented: these resources amidst trying to “grow and maintain a “So now you’ve got to teach maybe an older generation. business” while “still trying to be a wife and a mother and How do they order food online?...Now you have a keep the house clean and do laundry...” learning curve. Now you have to re-teach people how to get your product and to know that you’re available.” In nearly all cases, business owners viewed information- sharing with industry peers as a crucial part of managing Indeed, another participant emphasized the challenges this potential information overload and to sustaining they faced having an elderly customer base when their business. Owners created GroupMe chats, it came to navigating Zoom meetings. With new participated in Clubhouse chat rooms, and consistently platforms to consider, this business owner revealed engaged in verbal conversation with others in their that he believed he now had the added responsibility respective industries to remain informed. of educating his customers. Conversely, technology in some cases interfaced with customer-age to enable One business owner in the real estate industry respondents to more adequately meet the needs of compared information-sharing to the notion of their patrons. As one medical provider said: “people catching the rhythm of a particular wave: “As long [are able to [send] in photos when they don't feel safe as you can grab that information as it is coming in coming in, particularly some of the seniors.” and the information is moving, then I think you can catch the wave.” Business owners revealed that these One business leader of a financial firm understood practices were critical in helping them develop cutting online presence during the pandemic as central to the edge infrastructural, operational, and technological firm’s prosperity. He reported that his firm offered digital adaptations amidst the COVID-19 pandemic. products, online appointments, and electronic banking
4.2 Psychological Experiences
While sharing their perspectives on COVID-19-related what it was like for business owners required to interface shifts, participants revealed that many mental and with customers during the pandemic. emotional factors affected their own experiences, the experiences of their employees, and the experiences of The use of military metaphors in their language their customers. One family owned business in the food- demonstrates the potential mental-emotional services industry described feeling “battle-hardened.” experience of operating a business during a crisis, Other words and phrases participants used included particularly given 1) the financial and psychological “being in the trenches together” while reflecting upon costs associated with possible business closure and
26 The Samuel DuBois Cook Center on Social Equity at Duke University 2) operating a business during a time in which civilian safety, but also that of their employees, families, and death, especially that of minoritized “frontline” workers, other communities—all while striving to ensure the has been normalized as inevitable (Kroeger & Wright, success and continued viability of their business. 2021; Mills & Battisto, 2020; Off et al., 2021). The inability of one business owner to see clients in- “Survivalist” language permeated participant responses person due to the COVID-19 pandemic motivated her and was marked by possible acceptance that the shock to introduce virtual community workshops. However, this of COVID-19—as an emergency and disruption literally innovation in-service of their community eventually came to business-as-usual—was simply the world in which we at the detriment of her own personal and financial well- now live. In tandem with the military metaphors used being: “It impacted me financially, obviously, because by business owners to describe their experiences, the I went from making revenue from my business at the survivalism of business owners betrayed a pattern of time to basically everything just being donation based… planning for hardship as crucial to a firm’s continuity: [but] I wanted to try to offer up some type of comfort “You need emergency funds. And I don't necessarily to the community. I think I did that until about July know if you can always plan for any emergency, but you [2020], then I stopped the community-based workshops have to think that way. It has to be your thought process because I had to start dealing with my own self-care...” that you prepare.” Business owners, just as everyday people navigating the pandemic, were not immune to COVID-19’s far-reaching The psychological experience of continually anticipating effects in the form of active COVID cases and death: future disruption reveals the “life-or-death” mindset “I've lost family members. I've lost friends because of of some entrepreneurs in relation to their businesses: this pandemic” (Mills & Battisto, 2020, p. 8; Richardson “Right now, I think the mentality is just as long as et al., 2021). we stay open...” This constant state of planning for hardship dually connects with literature on the Despite these challenges and widespread loss, pressure embodied in allostatic load burdens and participants revealed that they did not let these difficult provides insight into the landscape of business owners’ experiences hold them back from continuing on, both psychological experiences and stressors while dealing as business owners and as people. One participant with the pandemic (Duru et al., 2012). stated, “we don’t dwell, we just move on,” while another similarly shared, “I don’t like to dwell. I’ve learned not Fear of business closure, or that others are heavily to dwell.” The ways in which business owners dealt dependent on you (such as employees, family members, with the psychological effects of COVID-19 in multiple or customers), took center stage in the majority of cases interlaced with their faith, religion, spirituality, and respondent reflections. COVID-19 joined other socio- overall life’s journey as entrepreneurs: “I believe in God political issues—including immigration policies and a great deal, so I really use that. It has been my strength the high cost of child care—in contributing to owners’ during this time to push me and give me the innovation fear, particularly in regard to the experiences of their and everything that I need to do to even survive.” employees: “I've actually got an employee who is seeking her citizenship… but still at any time she can The owners of a family owned firm provided similar get taken away, you know? And so the fear that is insight into their ability to continue and ultimately present is real.” Continually planning for emergencies survive during the pandemic: “growing up poor, infiltrated owners’ thoughts and delineated their mode growing up disadvantaged, you learn different survival of operation throughout the pandemic: “Our mantra is techniques...we believe that God has us on this path ‘What will befall us today?’... There’s a huge amount of for a reason, and so everything that's meant for us will pressure to not fall on our face.” be for us. If it's not meant for us, we accept and pray to move it aside.” Business owners across industries and Furthermore, many participants emphasized that firm sizes expressed gratitude for support they received they are more than just business owners; they are in varied forms, often noting reception of support was people with personal needs not too different from the “not the experience across the board,” particularly for average person navigating life during a pandemic. black-owned businesses. One participant, who had recently undergone surgery, stated she had to be “doubly careful” during COVID-19 This reverence for support during the pandemic, because her “immune system is not the best.” Business whether from customers or other firms, further illustrates owners' personal well-being was shaped not only by the potential psychological impacts of seeing other firms attempts to guarantee their own physical and emotional around you fail. This is a real fear, significantly shaping
Black Wall Street of the South: From Reconstruction to the Pandemic 27 owner-behavior during the pandemic and beyond it: experiences of respondents. As one participant in the “That is my biggest fear when it comes to businesses agricultural industry said when considering COVID’s in Durham, you see so many changing and shutting potential impact on the already low number of black- down during this pandemic.” Business closures across owned firms: “[knowing] it’s a fading industry, that's what industries dually governed the mental and emotional hurts a lot too...”
4.3 Social Experiences
Participants acknowledged that their business threatens business failure. Business owners said that experiences during the COVID-19 pandemic were they were members of the Greater Durham Chamber governed by the landscape of their social interactions of Commerce, the “Discover Durham” network, and and systems of social support. The term social capital Durham’s “Legacy Business” program. is defined as “the sum of the actual and potential resources embedded within, available through, and They believe these kinds of formal networks make up the derived from the network of relationships possessed business-coaching context that enables them to share by an individual or social unit” (Nahapiet & Ghoshal, information and bounce ideas off their peers. In short, 1998, p. 243). In relation to economic behavior, social these networks bond business owners with other business capital is known to lower transaction costs, insure owners. Many participants reported benefiting from against risk, increase cooperation, and subordinate self- being in a locality where it is common to see “businesses interest to society (Baker, 2000). In relation to business helping other businesses.” Furthermore, the business behaviors, social capital can facilitate avenues for owners also recognized several informal actors and business information, business mentorship, and business figures in the City of Durham that gave them access to funding. Structural social capital (formal and informal social support. These informal assets (while intangible) relationships and networks) can bond business owners facilitated their ability to navigate the pandemic, shaped through horizontal ties. It also can bridge relationships the nature of their business-related interactions, and between entrepreneurs and other financial, institutional, bridged the gap between the individual business owner and legal actors through vertical ties in a wider network. and the broader Durham community.
Past studies indicate that traditional and nontraditional One set of business owners in the food services industry forms of social capital historically have promoted told how they leveraged their university contacts from economic outcomes for black Americans. The stories Duke University to step in and do the “hard work” of told by these black business owners illustrate that their feeding medical staff and students in the earlier months social ties have helped secure benefits for their firms. of the pandemic. Another set of business owners from a family owned business in the same industry Many of the business owners' perspectives and said the “local distillery [stepped] in to fill the gap” by experiences shed light on the circ*mstances that providing PPE resources such as masks, hand sanitizer, permitted greater access to communal support, business and gloves. They also expressed their appreciation for education, and avenues for funding (Cook, 2011). One having bridged ties with the American Tobacco Campus, owner noted that it is not enough to be a part of a Enterprise Community Partners, and the Capitol business network: “...not just a network, but relationships Broadcasting Company. with people that you can call and say, ‘Okay. Can you get someone to help us with that?’” In fact, one business Similarly, business owners also reported how they owner and her partner stated she believed that the fostered partnerships with local event promoters, durability of their business relationships contributed to the Food Bank of North Carolina, and other local their business growth: “I think that a lot of black-owned organizations within the Durham community. As a newer businesses don’t grow because they do not have the business owner in Durham, one entrepreneur described relationships that we had.” the support she received as phenomenal and “extremely encouraging”: “I had a reporter from WRAL at Christmas One business-owner respondent recognized the time reach out to me and say, ‘Hey – you need to put importance of having a secure “kitchen-cabinet of yourself on this Christmas list.’” She recognized that her resources (a banker, a financial adviser, an accountant, social experience was unique to the story of business- a lawyer, an estate plan person, a business adviser)” ownership in Durham and contrasted with her business to tap into whenever one runs into a challenge that experience elsewhere: “Since moving here to North
28 The Samuel DuBois Cook Center on Social Equity at Duke University Carolina, particularly Durham, I've had so much support in Baltimore. There it's kind of like you hoard your from other business owners that it's just overwhelming. resources, you know, no one wants to share too much.” I mean, to support the business community here, the For these business owners, Durham provided a business small-business community here, the black-business experience that was rooted in the community and social community, the minority women. Everyone has just capital that helped them survive during the pandemic. been extremely helpful. It’s way different than it is
4.4 Funding Issues
The business experiences of participants during the we contacted [someone] and she gave me the [direct] COVID-19 pandemic were overwhelmingly shaped by contact-people. She said, `Try this person, they can try to the process of seeking funding support. As previously work around that for you…’.” noted, mandated closures and restrictions in North Carolina bore the potential to decimate normal revenue Connections and networks (specifically outside of more streams for businesses owners and to impact owners’ formalized avenues) were key to receiving funding- ability to meet usual expenses such as payroll, rent, support during the pandemic. For one black woman mortgages, and utilities (Atkins et al., 2021). As one business owner in the medical field, a decades-long, respondent in the food services industry commented, seemingly positive relationship with a bank and multiple the sudden cancellation of university athletics contracts highly successful firms did not translate into her initially and other large public gatherings had a sudden and receiving the first round of PPP: “I got the impression significant impact on firm revenue: “In one week, we lost that [with this bank], and probably with a lot of banking 95% of our revenue projected for 2021.” institutions, that there's a good old boy system… sort of the good old boys helping out [their] friends and The onset of COVID-19 in March 2020 meant significant neighbors. So in that sense, I wasn't surprised, but I changes to staffing for the majority of respondent-firms was definitely disappointed, but I’m not ever surprised with employees: “We closed down for two months about these kinds of things.” This experience connects so employees had to be furloughed… Personally, I with other women-owners experiences nationally and experienced a lot of stress because I didn't know what research from the Federal Reserve System’s Small we were going to do and what my employees were Business Credit Survey in which black women business going to do.” Another owner shared that staff had to be owners report being less-likely to receive some or all of terminated “during the [pandemic’s] first wave...just to the financing they requested (Sheng, 2020). cut down on payroll and costs.” With a similar emphasis on racialized networks and Owners of employee-firms expressed camaraderie with informal information sharing, one family owned firm did staff members they were required to furlough or lay off not receive a loan with their bank at the time; however, during the initial stages of the pandemic due to revenue they were connected with another lending institution loss initiated by COVID. Owners prioritized continued with which they had not previously done business communication with and assistance to their former through their white landlords. These findings complicate employees while seeking funding-support to reinstate existing research which suggests “banks may be using former employees and enable them to survive the crisis. the Paycheck Protection Program [PPP] to ensure that their borrowers survive the crises” and that “banks had The concern business owners felt for their employees’ incentives to prioritize borrowers with whom they had well-being, as well as the potential psychological effects existing relationships'' (Atkins et al., 2021, pp. 8-10; owners felt while making staffing changes during the Cororaton & Rosen, 2020; Li et al., 2020). Moreover, pandemic, are evident in the reflections of one family the experience of one participant initially denied a PPP owned firm: “That’s a conversation I also have with my loan with her long-time bank (required to address this staff, like don't feel embarrassed because you need to loan denial repeatedly with bankers through in-person fill your pantry, go to the food bank… there's nothing meetings) speaks to the long history of structural wrong with asking for help.” Another owner expressed discrimination, amplified under the pandemic (Laster similar concern for her furloughed employees amidst the Pirtle & Wright, 2021). crisis: “We were having difficulty with unemployment at that time. People couldn't get through. You couldn't get through on the lines to even get your call answered...So
Black Wall Street of the South: From Reconstruction to the Pandemic 29 As previously noted, when examining Durham’s calling financial institutions, while white testers were given business ecosystem pre-COVID, 8.3% of black-owned specific information about a line of credit and loans via businesses received business loans from a bank or the phone (Lederer & Oros, 2020, p.10). Furthermore, financial institution in 2019 while 11.1% of white-owned existing relationships with lending institutions do businesses received funding from the same sources (City not seem to migrate these effects for black business of Durham, 2019, p. 31). Still, many firms sampled for owners in Durham based on findings from the in-depth, the qualitative portion of the study eventually received qualitative interviews (Atkins et al., 2021). the first and/or second round of funding through PPP— enabling them to reinstate furloughed employees, Business owners highlighted the pandemic’s impact on “stay afloat,” or even grow their business during the their personal finances as well. One family owned firm’s pandemic. And many did not. owners said: “The sales that we[during the pandemic] covered payroll and nothing else…[that was] a major Multiple owners said they did not apply for funding detriment to our own personal finances.” The perceived support from the federal or city government during or legitimate scarcity of funding-support through the COVID-19 out of a reticence to take on debt. One owner CARES act and other legislative action, as well as explained: “You're thinking: ‘[do] I want to go into debt to private-sector interventions, likewise drove business make my business advance? I don't want to get all these owners to pull from their personal savings: “Everything loans.’” Other owners cited application criteria required that I did has been pretty much self-funded by my bank to receive government funding-support did not reflect accounts.” their holistic business experiences during the pandemic, resulting in their inability to secure funding: “For the Business owners understood their ability to readily second round of PPP, we were ineligible because we did access capital during the pandemic as inherently tied not show a loss. They don’t care… Instead of looking to their informal social networks, including familial at profit-loss, they're looking at revenue. Our expenses connections: “If you were white or had another race, you grew. They’re not looking at our expenses.” might have access to more capital or more funding… You might have access to a network that might not be Many business owners characterized the pandemic associated with a bank so much as family members or as having been marked by a scarcity of funds, and people that they know that have capital. We want to they recognized this posed barriers to their financial be in a better situation where, you know, somebody endeavors: “It was a full-time job just attending all of the could loan you $100,000 or somebody could loan you Zoom calls with a lot of information… By the time I sat $200,000, but it's just not that easy.” down at 11 at night to even begin to start the application process, the money was gone” (Humphries et al., 2020). As previously discussed, black-owned businesses in Another owner said: “I wish I could find some grants, but I Durham were the most likely to receive business funding don't have the time or energy to do that.” from personal savings belonging to the business owner and from family and friends in 2019; however, when it Combined with the centrality of informal information came to tapping into personal home equity loans, black- networks in securing funding-support, (as seen in the owned businesses were the least likely to use that as a examples of the firm owner required to locate a contact source (City of Durham, 2019, p. 78). person for their furloughed employees to reach the unemployment office or the owner required to meet Black owners indicated a preference for public and with their long-time bank after not receiving the first private-sector interventions during the pandemic which wave of PPP), extra time required of black business enabled them to reduce their debt, whether indirectly owners to secure basic funding resources through the or directly. Business owners appreciated and promoted CARES act and other legislative actions, the entire PPP reciprocal, business-level interventions which allowed process raises questions with respect to time as a scarce, firms across and within industries to support each other racialized resource and the role of organizations in financially throughout the COVID crisis. Examples of literally stealing time from black people (Humphries et these intra-business interventions included a statewide al., 2020; Kwate, 2017; Ray, 2019). corporation purchasing gift cards for their employees for a black-owned Durham-based restaurant such that Existing research has explored similar phenomena at the the owners received the money up-front during the intersection of financial institutions and time as a scarce, pandemic’s first wave but could honor these vouchers racialized resource. Black testers in a matched-pair study in exchange for food service as individual employees were told they would need to physically travel to the decided to redeem them. bank before receiving information about products when
30 The Samuel DuBois Cook Center on Social Equity at Duke University As the firm owners reported: “[The gift card program] The financial experience of one woman business owner allowed us to move forward. It felt like a community during COVID was likewise shaped by the communal thing… These employees have been coming in with support she experienced in Clubhouse chat rooms, with their families and buying food. It's a two-fold win other educational business owners locally and nationally because these are people that live in the community promoting her business via their own firms’ social media that maybe knew nothing about us but they're coming channels. in, having the food, enjoying it, and then coming back… and you don't feel like it was just a hand-out because people are coming in and giving us a chance to have repeat customers.”
5.0 The Paycheck Protection Program
The U.S. government implemented different market and the median income is $60,000. In addition, the interventions during COVID to support the economy. city population has a median age of 34, and females One of these interventions was the Paycheck Protection represent 53 percent of the population (see Table Program (PPP), targeting small businesses (with 500 11). Hence, it is not surprising that 41 percent of PPP employees or fewer) to help them keep their employees borrowers were corporations, a proportion which is on their payroll. PPP funds also could be used for other significantly higher than the 29 percent found at the operating expenses such as mortgage interest, rent, and national level (Atkins et al., 2021). utilities. The PPP loans come with one percent interest rates and borrowers may be eligible for full PPP loan While PPP loans were meant to help small businesses forgiveness by SBA if the borrowers maintain current stay afloat during the pandemic, many small business employee and compensation levels for at least 8-24 owners faced difficulties when trying to obtain PPP loans weeks after funds disbursem*nt, the funds are spent due to the limited amount of funds, the procedure for on qualifying payroll costs and expenses, and at least fund distribution, and which businesses were prioritized 60 percent of the proceeds are spent on payroll. The for receipt of the fund. For example, there were U.S. Small Business Administration used local banks to glitches the first few days in the SBA portal used for allocate the loans on a first come, first served basis. banks to disclose their PPP loans (Fox and Herb, 2020). Additionally, banks were supposed to allocate these Based on the U.S. Small Business Administration’s PPP funds on a “first come, first served” basis, but some loan database, the city of Durham received a total large banks such as Bank of America, Wells Fargo, and of 4,582 PPP loans that were disbursed (as of March JPMorgan Chase, and U.S. Bank were sued and accused 2021), with an average of 12 reported employees per of front-loading applications with higher loan amounts loan (see Table 11). The number of PPP loans suggests since it meant bigger fees for the banks (Egan, 2020). that roughly 60-65 percent of the approximately 7,600 Also, banks were accused of giving priority to current establishments in Durham County received PPP loans, or past clients including distributing loans to publicly directly impacting the local economy. traded firms such as Potbelly Sandwich Shop, Shake Shack, and Ruth’s Chris Steakhouses (Egan, 2020). According to the American Community Survey, the city of Durham is a vibrant city; approximately 50 percent of the population has a bachelor's degree or higher,
Black Wall Street of the South: From Reconstruction to the Pandemic 31 TABLE 11: Average Paycheck Protection Program Loan Data in the City of Durham
Mean Std Dev
Loan Amounts 107609.49 363665.48
ln(Loan Amounts) 10.33 1.51
Jobs Reported 11.97 29.58
Race Unanswered 0.89 0.31
White Owner 0.06 0.23
Black Owner 0.03 0.17
Hispanic Owner 0.01 0.09
Asian Owner 0.02 0.14
Native American Owner 0.00 0.04
Veteran Unanswered 0.83 0.38
Veteran Owner 0.01 0.11
Gender Unanswered 0.79 0.40
Male Owner 0.14 0.34
Female Owner 0.07 0.26
Corporation 0.41 0.49
Median Age (Zip Code) 34.43 2.94
Female % (Zip Code) 52.61 0.98
Median Income (Zip Code) 60027.59 17537.74
Bachelor or Higher % (Zip Code) 48.86 10.42
Observations 4582
Another issue with the PPP loans that different news Atkins, Cook, and Seamans (2021) find that 90 percent outlets and academic scholars immediately highlighted of all PPP borrowers did not report their race at the was the disproportionate distributions of the funds national level. We see a similar percentage for the city favoring white business owners (Atkins, Cook, and of Durham—89 percent of PPP borrowers did not say Seamans, 2021). According to the SBA Paycheck their race. Additionally, we find that a high number of Protection Program loan data, approximately 75 percent Durham borrowers do not report their gender or veteran of all PPP loans at the national level did not include any status as well, 79 percent and 83 percent, respectively. demographic information such as race and gender of Consequently, we find that only 6 percent of borrowers the borrower. identified themselves as whites, 3 percent as blacks, 1 percent as Hispanics, 2 percent as Asian, 1 percent as veterans, 14 percent as males, and 7 percent as females (see Table 11).
32 The Samuel DuBois Cook Center on Social Equity at Duke University Table 12 compares the entire sample of Durham PPP 2003; Cavalluzz and Cavalluzzo; 1998; Fairlie, Robb, and loans to the subsamples of unreported race, self-reported Robinson; 2020). For small business loan recipients in blacks, and self-reported whites. One important takeaway Durham who did indicate information on their race, we is that borrowers that did not report their races tend find that black PPP borrowers in Durham received an to have received higher average PPP loan amounts average of $25,598, which is less than any other group ($111,281 versus $107,609 for the total sample). This (U.S. Treasury, August 2020). This amount represents only suggests that borrowers anticipate that self-reporting about one-fourth of the amount received by self-reported race carries a penalty given the pre-existing racial biases whites ($103,300) and the unreported race borrowers in the financial service industries (Blanchard, Zhao, and ($112,281), see Table 12. Yinger, 2008; Blanchflower, Leaving, and Zimmerman;
TABLE 12: Average Paycheck Protection Loan Amount by Racial Group in Durham, 2020
Variables\Ethnicity All Race Unreported Black White
Loan Amounts 107609.49 111280.74 25597.58 103300.32
Jobs Reported 11.97 12.15 5.31 12.72
Loan Amount/Jobs 9017.12 9060.51 7753.88 9823.29
Veteran Owner 0.01 0.01 0.05 0.09
Female Owner 0.07 0.04 0.44 0.30
Corporation 0.41 0.42 0.18 0.37
Observations 4582 4096 131 261
Although the number of jobs reported tends to be 2.4 were females, a significantly higher percentage than times larger for white business owners than for black self-reported white females (30 percent) and females in owners, the findings still show a racial funding gap when the unreported race subsample (4 percent). Moreover, comparing the average loan amount per job reported, 5 percent of self-reported black owners are veterans with black owners receiving $7,754 versus $9,824 per compared to 9 percent of white owners and 1 percent of job for white owners. In terms of gender, the findings the unreported race subsample (see Table 12). show that 44 percent of self-reported black owners
Black Wall Street of the South: From Reconstruction to the Pandemic 33 TABLE 13: PPP Loans by Racial Groups in the City of Durham in 2020
Loan Amounts ($000s) All Businesses Black White
<2 122 5 6
2-5 387 18 16
6-10 544 28 25
10-20 827 33 33
20-50 1012 31 62
50-100 671 10 54
100-150 326 3 21
150-1,000 624 3 41
1,000+ 69 0 3
Total 4582 131 261
Table 13 compares the PPP loan amount distribution for self-reported black and white borrowers in Durham. The findings show that 63 percent of all Durham PPP loans were for less than $50,000. However, 88 percent of PPP loans disbursed to black owners were for less than $50,000. While for whites, that percentage was only 54 percent. This further indicates that Durham’s black-owned businesses received smaller loan amounts. When we look at the PPP loan amount distribution at the intersection of race and gender (see Table 14), 84 percent of the loans allocated to black females had amounts lower than $50,000 while, for white females, it was 66 percent.
TABLE 14: PPP Loans by Gender and Racial Groups in the City of Durham in 2020
All Businesses Black White
Loan Amounts ($000s) Male Female Male Female Male Female
<2 11 6 3 0 1 3
2-5 28 34 8 7 5 7
6-10 49 34 4 12 12 6
10-20 86 69 9 19 13 17
20-50 146 75 15 10 38 19
50-100 121 47 4 5 36 11
100-150 68 20 1 2 15 5
150-1,000 103 37 1 2 29 11
1,000+ 10 0 0 0 2 0
Total 622 322 45 57 151 79
34 The Samuel DuBois Cook Center on Social Equity at Duke University Table 15 represents the number of jobs distribution for and white borrowers, respectively, report having 1-5 all businesses and black- and white-owned businesses. jobs. Similarly, Table 16 indicates that for self-reported The table shows that the allocation for black-owned male-owned and female-owned businesses, the most companies tends to have lower numbers of jobs common loan recipient group was for businesses with 1 reported, with 76 percent of black borrowers reporting to 5 jobs, 46 percent and 58 percent, respectively. 1-5 jobs. Only 57 percent and 55 percent of all borrowers
TABLE 15: PPP Loans by Number of Jobs and Racial Groups in the City of Durham
Number of Jobs All Businesses Black White
1-5 2627 100 143
6-10 761 15 32
11-20 571 11 39
21-50 446 4 38
51-99 110 0 6
100+ 67 1 3
Total 4582 131 261
TABLE 16: PPP Loans by Gender and Racial Groups in the City of Durham
All Businesses Black White
Number of Jobs Male Female Male Female Male Female
1-5 285 188 33 41 74 47
6-10 125 47 5 9 17 10
11-20 85 50 4 5 26 12
21-50 99 28 2 2 28 8
51-99 17 8 0 0 4 2
100+ 11 1 1 0 2 0
Total 622 322 45 57 151 79
5.1. Self-Reporting Race and Quantifying the Racial Disparity in PPP Loans
Our descriptive analysis in Table 17 shows that the However, we find that if a borrower self-reports her sample characteristics for both the unreported and the race, she is less likely to leave her veteran status and reported race subsamples are statistically different. As gender questions unanswered. Additionally, we find we pointed out before, we find that those that provided reported race samples are less likely to be a corporation their race received on average $34,612 less, an amount (35 percent versus 42 percent), and the difference is that is significant both in magnitude and statistically. The statistically significant. We find no statistically significant number of jobs reported is lower for the race-reported difference in terms of the location (borrower’s zip code) group, but the difference is not statistically significant. characteristics such as median age, female percentage, median income, and education at the zip code level.
Black Wall Street of the South: From Reconstruction to the Pandemic 35 TABLE 17: PPP Loans: Unreported vs. Reported Race
Unreported Reported Race Race Difference t-stat
mean sd mean sd b t
Loan Amounts 111280.74 379035.51 76668.29 187267.21 -34612.44*** (-3.34)
Jobs Reported 12.15 30.46 10.40 20.60 -1.76 (-1.68)
Veteran Unanswered 0.89 0.31 0.26 0.44 -0.64*** (-31.35)
Veteran Owner 0.01 0.08 0.07 0.25 0.06*** (5.27)
Gender Unanswered 0.87 0.34 0.15 0.36 -0.72*** (-42.59)
Male Owner 0.09 0.29 0.51 0.50 0.42*** (18.31)
Female Owner 0.04 0.19 0.34 0.47 0.30*** (13.79)
Corporation 0.42 0.49 0.35 0.48 -0.07** (-3.19)
Median Age (Zip Code) 34.42 2.95 34.50 2.83 0.07 (0.55)
Female % (Zip Code) 52.60 0.99 52.67 0.88 0.07 (1.59)
Median Income 60017.96 17596.85 60108.30 17052.01 90.35 (0.11) (Zip Code)
Bachelor or Higher % 48.87 10.38 48.79 10.75 -0.08 (-0.15) (Zip Code)
Observations 4096 486 4582
The results in Table 17 highlight the selection issue of As a result, it is necessary to correct for selection to self-reporting the borrower’s race. Literature on financial generate useful inferences about our subsamples services has shown that the relationship between the that self-reported their race. We control for potential bank branches and borrowers matters in obtaining good selection issues using the Heckman selection model and terms on loans. Given that the interest rates for PPP controlling for unobservables by adding fixed effects (in loans are set at 1 percent by the federal government, our case, industry, lender, and location fixed effects). bank branches exercise their knowledge or biases through increasing or decreasing the approved PPP loan More specifically, we apply the inverse Mills ratio (also amounts. From a borrower’s perspective, marginalized known as the non-selection hazard) to take into account racial communities tend to be penalized when it comes potential selection bias (Atkins et al., 2021). Heckman to loan terms. Hence, borrowers from such communities (1976) proposed a two-step selection correction model would refuse to self-report their race if they believe (Heckman, 1976) using the inverse Mills ratio. In the doing so would hurt their chances of getting good first stage, a probit regression is modeled using the terms on their loans. On the other hand, there is some observed positive outcomes (in our case, selecting evidence non-marginalized borrowers tend not to not to self-report their race). In the second stage, the report their race if they believe it will work against them estimated parameters are used to obtain the inverse (for example, in college admissions). Hence, the self- Mills ratio, which is then included as an explanatory selection issue shows that not reporting their race seems variable in the OLS estimation. to be an optimal strategy for some individuals across racial groups when applying for a loan.
36 The Samuel DuBois Cook Center on Social Equity at Duke University TABLE 18: Prediction of Selecting to Not Report Race: A Probit Model with Unreported Race as the Dependent Variable
(1) (2) (3) (4) (5)
Black NH % (Zip Code) -0.009*** -0.005** -0.006** -0.006** 0.001
(0.002) (0.002) (0.003) (0.003) (0.003)
Hispanic % (Zip Code) 0.016** 0.037*** 0.055*** 0.056*** 0.065***
(0.006) (0.009) (0.008) (0.009) (0.016)
Asian NH % (Zip Code) -0.018* -0.012 -0.003 -0.004 0.009
(0.010) (0.010) (0.009) (0.009) (0.019)
Other Races NH % (Zip Code) 0.012 0.313*** 0.358*** 0.367*** 0.359***
(0.041) (0.066) (0.050) (0.053) (0.084)
Median Age (Zip Code) -0.016 -0.025** -0.012 -0.012 0.015
(0.011) (0.011) (0.009) (0.009) (0.021)
Female % (Zip Code) -0.002 0.029 0.075*** 0.073*** -0.011
(0.014) (0.020) (0.026) (0.025) (0.023)
Median Income (Zip Code) 0.000*** 0.000*** 0.000*** 0.000*** 0.000*
(0.000) (0.000) (0.000) (0.000) (0.000)
Jobs Reported 0.004 0.004 0.003 -0.000
(0.002) (0.002) (0.002) (0.002)
Female Owner -0.305* -0.283* -0.277 -0.140
(0.161) (0.166) (0.171) (0.175)
Veteran Owner -0.455 -0.386 -0.374 -0.285
(0.295) (0.298) (0.307) (0.234)
Gender Unanswered 1.491*** 1.570*** 1.568*** 1.900***
(0.220) (0.235) (0.231) (0.294)
Veteran Unanswered 0.392*** 0.416*** 0.418*** 0.441***
(0.140) (0.136) (0.131) (0.110)
Industry FE No No Yes Yes Yes
Corporation No No No Yes Yes
Lender FEs No No No No Yes
Observations 4548 4548 4461 4461 4087
Pseudo R2 0.002 0.371 0.392 0.392 0.518
Black Wall Street of the South: From Reconstruction to the Pandemic 37 Table 18 shows the first step – the probit regression In Step 1, the probit model shows that a higher results with a dummy variable of unreported race as percentage of Hispanics and Other Races (non-white our dependent variable. The unreported race dummy and non-Hispanic) in the zip code population increases variable takes the value of 1 if the borrower did not self- the chances of not reporting race. Additionally, higher report her race and zero otherwise. Column (1) consists median income at the zip-code level increases the of the borrower’s location (zip code) characteristics such probability of not reporting race. We also find that as the percentage of Blacks, Hispanics, Asians, and leaving the questions on gender and veteran status other races, not including Whites (with whites as the blank is highly correlated with not reporting race. baseline race variable); female percentage; median age, This is understandable given that those questions are and median income as controls. The assumption is that presented on the same page and close to each other on some of these variables can influence the decision not the PPP loan applications. The other control variables to self-report their race. Column (2) adds the borrower’s are not significant when looking at column (5), the full characteristics such as jobs reported, female dummy, probit model specification. We then use column (5) veteran status dummy, gender unanswered, and veteran results to calculate the inverse Mills Ratio. In Step 2, we unanswered as controls. Column (3) adds industry fixed use the inverse Mills Ratio in our standard OLS model effects, column (4) adds a corporation dummy (equal to as one of the independent variables when regressing 1 if it is a corporation and zero otherwise), and column against the natural log of loan amounts (see Table 19). (5) adds lender fixed effects to control for potential un- observables at the bank branch level.
38 The Samuel DuBois Cook Center on Social Equity at Duke University TABLE 19: ln(Loan Amounts) – Paycheck Protection Program (PPP)
(1) (2) (3) (4) (5) (6) (7)
White Owner 0.238 0.213** 0.209** 0.166 0.130 0.031 0.013
(0.151) (0.094) (0.095) (0.100) (0.094) (0.088) (0.085)
Black Owner -0.839*** -0.516*** -0.495*** -0.436*** -0.334*** -0.418*** -0.362***
(0.106) (0.066) (0.068) (0.062) (0.084) (0.083) (0.078)
Hispanic Owner -0.080 0.063 0.039 0.056 0.203 0.087 0.062
(0.117) (0.118) (0.117) (0.135) (0.148) (0.142) (0.144)
Asian Owner -0.143 -0.169* -0.148 -0.184* -0.027 -0.131 -0.139
(0.149) (0.096) (0.091) (0.097) (0.129) (0.136) (0.143)
Native American Owner 1.304** 0.631*** 0.674*** 0.616*** 1.362*** 1.143*** 1.024***
(0.478) (0.217) (0.213) (0.192) (0.208) (0.262) (0.238)
Jobs Reported 0.027*** 0.026*** 0.026*** 0.023*** 0.025*** 0.025***
(0.001) (0.001) (0.001) (0.001) (0.003) (0.003)
Veteran Owner 0.278 0.335* 0.362* 0.175 0.073 0.090
(0.166) (0.173) (0.197) (0.107) (0.096) (0.108)
Female Owner 0.071 0.049 0.063 0.038 -0.042 -0.057
(0.051) (0.060) (0.060) (0.061) (0.083) (0.075)
Corporation 0.760*** 0.769*** 0.672*** 0.523*** 0.530*** 0.501***
(0.078) (0.074) (0.070) (0.054) (0.057) (0.050)
Median Age (Zip Code) 0.223*** 0.137*** 0.242*** 0.250*** 0.210***
(0.002) (0.011) (0.011) (0.014) (0.016)
Median Income -0.000*** -0.000*** -0.000*** -0.000*** -0.000*** (Zip Code)
(0.000) (0.000) (0.000) (0.000) (0.000)
Bachelor or Higher % 0.116*** 0.084*** 0.109*** 0.112*** 0.099*** (Zip Code)
(0.001) (0.005) (0.005) (0.006) (0.007)
Inverse Mills Ratio 0.193*** 0.148**
(0.056) (0.051)
Zip FE No No Yes Yes Yes Yes Yes
Industry FE No No No Yes Yes Yes Yes
Lender FE No No No No Yes Yes Yes
Month-Year FE No No No No No No Yes
Observations 4582 4582 4548 4490 4490 4089 4089
Adjusted R² 0.010 0.374 0.388 0.410 0.498 0.499 0.516
Black Wall Street of the South: From Reconstruction to the Pandemic 39 Table 19 shows our OLS and fixed effect models using were accused of allocating funds to their clients first or the natural log of PPP loan amounts as our dependent favoriting some type of businesses instead of using a variable. The first 5 columns show different models “first come, first served” basis as instructed by the SBA. without correcting for selection. We correct for selection in the last two models, columns 6-7, for comparison The first column controls only for racial and ethnic purposes. Next, we implement our regression analysis characteristics of the borrower. Column (2) adds other using fixed effects to control for un-observables at borrower characteristics such as jobs reported and different levels (industry, lender, zip code, and month veteran, female, and corporation dummies. Both of when the loans were approved). The intuition is that the first columns do not control for fixed effects, and the PPP loan distribution and approval process could they show some of the largest impacts in terms of the be influenced by set standards such as the type of magnitude of the coefficients, a gap in funding of 84 industry (essential vs. non-essential industries; service percent and 52 percent, respectively. In other words, vs. manufacturing, etc.), the type of lender (credit union; black owners received PPP loans that were 52-84 commercial banks; regional vs. large banks, etc.), the percent lower than those borrowers that did not self- location or zip code of the business (it could be that report race. In column (3), we control for neighborhood the business location is in a poor neighborhood with characteristics at the zip code level and also add the zip limited business growth opportunities during and after code fixed effects. The results show that the funding gap the pandemic), and the month the loan was approved remains high for black borrowers (50 percent). (it could be that businesses that applied earlier had a In columns (4) and (5), we add industry and lender fixed better chance at getting approved for larger amounts). effects, respectively. We find that the funding gap for Our findings are quite interesting; as shown earlier, there black business owners remains large and significant at 33 seems to be a penalty for self-reporting race/ethnicity percent. In fact, when we correct for selection, by adding for black small business owners, and the penalty remains the inverse Mills Ratio, the effects do not disappear, statistically significant across all specifications when showing a funding gap of 42 percent in column (6). controlling for borrower, lender, and neighborhood We find that the coefficient of the inverse Mills Ratio characteristics, as well as other potential un-observables is positive and significant, showing evidence of self- (see Table 19). The coefficients are interpreted as the selection in not reporting race and that those that do percentage differential between those that self-report not state their race tend to have higher loan amounts, their race-ethnicity vs. the control group (those that did further confirming our expectations and evidence from not self-report their race-ethnicity). the descriptive analysis.
The existence of this race reporting penalty suggests We then control for the timing of loan approval by that racial biases in the financial service industries adding the month-fixed effects in column (7). We find infiltrated into the mechanism through which PPP loans that the gap to be 36%. Finally, using the last two were distributed. For example, the combination of columns that control for self-selection and timing aiming for a fast distribution funds and the fact that SBA fixed effects, we see that the racial loan gap between use existing local bank branches likely serve to amplify self-reported blacks and the non-self-reported is the biases in banking relationship (Blanchard, Zhao, and approximately 40%; in other words, black business Yinger, 2008; Blanchflower, Leaving, and Zimmerman, owners obtained PPP loan amounts that were 40% 2003; Cavalluzz and Cavalluzzo, 1998; Fairlie, Robb, lower when compared to other borrowers with similar and Robinson, 2020; Atkins, Cook, and Seamans, business, location, and lender characteristics. 2021). Additionally, as mentioned earlier, some banks
40 The Samuel DuBois Cook Center on Social Equity at Duke University TABLE 20: Racial Gap Across Samples: ln(Loan Amounts)
vs. All Other vs. Unreported Race vs. Reported White
Black Owner -0.357*** -0.425*** -0.350
(0.079) (0.081) (0.203)
Jobs Reported 0.025*** 0.024*** 0.034***
(0.003) (0.003) (0.008)
Veteran Owner 0.132 0.217** -0.093*
(0.117) (0.090) (0.041)
Female Owner -0.062 -0.025 -0.262
(0.072) (0.116) (0.175)
Corporation 0.501*** 0.503*** 0.447*
(0.049) (0.054) (0.194)
Median Age (Zip Code) 0.212*** 0.211*** -0.004
(0.017) (0.015) (0.065)
Median Income (Zip Code) -0.000*** -0.000*** 0.000
(0.000) (0.000) (0.000)
Bachelor or Higher % (Zip Code) 0.100*** 0.101*** -0.024
(0.008) (0.007) (0.036)
Inverse Mills Ratio 0.145* 0.133** 0.346
(0.073) (0.056) (0.277)
Zip FE Yes Yes Yes
Industry FE Yes Yes Yes
Lender FE Yes Yes Yes
Month-Year FE Yes Yes Yes
Observations 4089 3751 373
Adjusted R2 0.516 0.514 0.605
In Table 20, we conduct an exercise in which we keep is self-reported whites, the significance disappears self-reported black business owners and vary the control due to the shrinking number of observations and large group — vs. all other borrowers in column (1), vs. variation. This result is particularly interesting because it unreported race borrowers in column (2), and vs. self- shows that if borrowers report their race, banks are more reported white borrowers in column (3). We find that the likely to compare across racial groups to ensure parity. racial gap remains when compared to all loans and loans However, they do not do so across those who self-report with unanswered race. However, when our control group and those who do not report their race or ethnicity at all.
Black Wall Street of the South: From Reconstruction to the Pandemic 41 5.2 Racial and Gender Disparity in PPP Loans
Did black female owners face additional disparity in are not statistically different from zero. In other words, the distribution of PPP loans? In Table 21, we conduct a there seems to be no incremental funding gap for black similar analysis, as shown above, presenting the findings female owners because of gender. Instead, the funding on the intersectionality of gender and black-owned gap that we see for black female owners comes through businesses in the acquisition of PPP loans. We find that the racial funding gap. Put differently, black female in Durham black female owners received slightly larger owners face similar biases as black male small business loan amounts with respect to all other borrowers and owners through the PPP loan application process. unreported race borrowers; however, the differences
TABLE 21: Racial and Gender Gap: ln(Loan Amounts)
vs. All Other vs. Unreported Race vs. Reported White
Black Owner=1 -0.399*** -0.463*** -0.315 (0.125) (0.112) (0.275) Female Owner=1 -0.077 -0.047 -0.228 (0.094) (0.135) (0.288) Black Owner=1 # Female Owner=1 0.107 0.101 -0.090 (0.233) (0.230) (0.385) Jobs Reported 0.025*** 0.024*** 0.034*** (0.003) (0.003) (0.008) Veteran Owner 0.135 0.224** -0.100* (0.120) (0.095) (0.050) Corporation 0.501*** 0.502*** 0.454** (0.049) (0.054) (0.183) Median Age (Zip Code) 0.212*** 0.211*** -0.008 (0.017) (0.015) (0.073) Median Income (Zip Code) -0.000*** -0.000*** 0.000 (0.000) (0.000) (0.000) Bachelor or Higher % (Zip Code) 0.100*** 0.101*** -0.026 (0.008) (0.007) (0.040) Inverse Mills Ratio 0.148* 0.136** 0.352 (0.075) (0.054) (0.265) Zip FE Yes Yes Yes Industry FE Yes Yes Yes Lender FE Yes Yes Yes Month-Year FE Yes Yes Yes Observations 4089 3751 373 Adjusted R2 0.516 0.514 0.604
42 The Samuel DuBois Cook Center on Social Equity at Duke University 5.3 Timing and Racial Disparity in PPP Loans
Furthermore, we investigate the timing of the loan of the new administration would reduce the racial wealth approval. Anecdotal evidence from the in-depth gap and support the success of black-owned businesses qualitative interviews reveals that black small business in the long-term. owners felt PPP loan information was not disseminated equally among all business owners. For example, some Table 22 shows the timing effects by month, starting business owners in Durham felt that the funding was with April 2020 (the first month of PPP loan approval) already gone by the time they were able to apply for and ending with February 2021. The months from April PPP loans. Additionally, the different approaches driven 2020 - August 2020 are considered the first round of by the different Administrations (Trump vs. Biden) could PPP loans, and January 2021 - February 2021 are part also make a difference in funding for black business of the second PPP round. When considering all PPP owners. We heard from black business owners that the loans allocated in Durham, we find that April 2020, treatment was different in later months, particularly the first month PPP loans were approved, was a key the second round of PPP conducted under the Biden month in driving the racial funding gap, confirming the Administration. However, multiple respondents experience described by the black business owners and remained skeptical of the degree to which the policies CEOs we interviewed.
Black Wall Street of the South: From Reconstruction to the Pandemic 43 TABLE 22: Racial Gap and Timing of Loan Approval: ln(Loan Amounts)
April May June July August January February 2020 2020 2020 2020 2020 2021 2021 White Owner 0.053 0.206 -0.512 0.740* -0.535 0.033 -0.340 (0.115) (0.172) (0.281) (0.365) (0.546) (0.260) (0.253) Black Owner -0.812*** -0.121 0.129 -0.450 0.324 -0.027 -0.306 (0.237) (0.137) (0.255) (0.254) (1.300) (0.263) (0.311) Hispanic Owner -0.099 0.346 0.865** -1.841* 0.000 0.268 0.266 (0.231) (0.243) (0.355) (0.853) (.) (0.235) (0.361) Asian Owner -0.043 0.279** -0.651 -0.760 0.000 -0.092 -0.494 (0.135) (0.104) (0.459) (0.490) (.) (0.195) (0.442) Native American Owner 0.889*** 1.061*** 0.000 0.000 0.000 0.763* 0.000 (0.147) (0.090) (.) (.) (.) (0.330) (.) Jobs Reported 0.022*** 0.029** 0.106*** 0.085*** 0.100 0.048*** 0.054*** (0.002) (0.009) (0.009) (0.019) (0.070) (0.009) (0.009) Veteran Owner 0.150 -0.275 0.000 -0.197 1.171 0.501* 0.405 (0.232) (0.360) (.) (0.438) (0.662) (0.253) (0.445) Female Owner 0.064 -0.232** 0.383 -0.250 0.468 -0.132 0.127 (0.091) (0.088) (0.405) (0.678) (0.579) (0.252) (0.197) Corporation 0.401*** 0.539*** 0.556** 0.690*** 1.027** 0.352** 0.362* (0.044) (0.053) (0.230) (0.152) (0.415) (0.132) (0.170) Median Age (Zip Code) -0.100*** 0.029 -0.040* -0.008 0.345 -0.074*** 0.054** (0.018) (0.016) (0.018) (0.012) (0.460) (0.016) (0.021) Median Income (Zip Code) 0.000 0.000*** 0.000 0.000*** -0.000 0.000** 0.000** (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
Bachelor or Higher % -0.021** 0.010 -0.003 -0.029*** 0.163 -0.024*** 0.020 (Zip Code) (0.008) (0.010) (0.009) (0.008) (0.209) (0.004) (0.020) Inverse Mills Ratio 0.109 0.257** -0.174 0.578* 0.881 0.031 0.185 (0.089) (0.094) (0.262) (0.305) (0.792) (0.253) (0.276) Zip FE Yes Yes Yes Yes Yes Yes Yes Industry FE Yes Yes Yes Yes Yes Yes Yes Lender FE Yes Yes Yes Yes Yes Yes Yes Observations 1850 1172 305 170 76 277 239 Adjusted R2 0.497 0.372 0.387 0.358 0.269 0.669 0.645
44 The Samuel DuBois Cook Center on Social Equity at Duke University It could be argued that loans with large loan amounts, confirm that for loans with up to $150,000 in approved considered to be those with amounts larger than amount, the racial funding gap was driven not only by the $150,000 by the SBA, are the loans that are driven by such loans approved in April 2020 but also by those approved discrepancies in funding. To investigate this question, we in May 2020 and July 2020. We find that loans approved perform a similar analysis as found in Tables 18-21 with in later months and particularly during the second round PPP loans of up to $150,000 in loan amounts only. The were more egalitarian among black borrowers and results of this exercise are found in Tables A2-A4 in the other borrowers. This is expected given the changes appendix and Table 23 below. We find that the results implemented in the PPP program in later months are very consistent, and, in some cases, with stronger and during the second round that try to address the statistical significance. For example, in Table 23, we disproportional distributions of funds across racial groups.
Black Wall Street of the South: From Reconstruction to the Pandemic 45 TABLE 23: Racial Gap and Timing of Loan Approval: ln(Loan Amounts) - Up to $150,000
April May June July August January February 2020 2020 2020 2020 2020 2021 2021
White Owner -0.009 0.139 -0.544 0.689* -0.535 0.287 -0.426*
(0.080) (0.119) (0.293) (0.341) (0.546) (0.196) (0.210)
Black Owner -0.567** -0.209** 0.152 -0.495* 0.324 0.083 -0.320
(0.186) (0.085) (0.251) (0.213) (1.300) (0.276) (0.369)
Hispanic Owner -0.206 0.230 0.900** -1.811* 0.000 -0.014 0.191
(0.127) (0.185) (0.281) (0.820) (.) (0.437) (0.448)
Asian Owner 0.047 0.404*** -0.619 -0.728 0.000 -0.184 -0.615
(0.123) (0.105) (0.437) (0.466) (.) (0.228) (0.421)
Native American Owner 0.705** 1.088*** 0.000 0.000 0.000 0.539 0.000
(0.303) (0.077) (.) (.) (.) (0.288) (.)
Jobs Reported 0.075*** 0.069*** 0.109*** 0.073*** 0.100 0.131*** 0.074***
(0.011) (0.006) (0.021) (0.019) (0.070) (0.008) (0.014)
Veteran Owner 0.253 -0.045 0.000 -0.147 1.171 0.467 0.216
(0.214) (0.393) (.) (0.404) (0.662) (0.337) (0.488)
Female Owner 0.066 -0.140 0.410 -0.223 0.468 -0.212 0.254
(0.086) (0.087) (0.355) (0.679) (0.579) (0.324) (0.274)
Corporation 0.315*** 0.410*** 0.499* 0.587*** 1.027** 0.284* 0.362**
(0.041) (0.061) (0.258) (0.138) (0.415) (0.120) (0.104)
Median Age (Zip Code) -0.110*** 0.047** -0.038* -0.180* 0.345 -0.060*** -0.017
(0.021) (0.015) (0.020) (0.092) (0.460) (0.012) (0.021)
Median Income 0.000*** 0.000** 0.000 0.000* -0.000 0.000** 0.000* (Zip Code)
(0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
Bachelor or Higher % -0.033** 0.014 -0.003 -0.105** 0.163 -0.027*** -0.042*** (Zip Code)
(0.011) (0.009) (0.010) (0.042) (0.209) (0.006) (0.003)
Inverse Mills Ratio 0.094 0.164 -0.203 0.573 0.881 0.075 0.178
(0.082) (0.090) (0.201) (0.314) (0.792) (0.212) (0.246)
Zip FE Yes Yes Yes Yes Yes Yes Yes
Industry FE Yes Yes Yes Yes Yes Yes Yes
Lender FE Yes Yes Yes Yes Yes Yes Yes
Observations 1432 1085 298 167 76 225 199
Adjusted R2 0.430 0.355 0.304 0.301 0.269 0.619 0.516
46 The Samuel DuBois Cook Center on Social Equity at Duke University To conclude, PPP loans have proven to have helped the adaptability of small business owners (Crane et al., 2021). business community nationally and in Durham. Early However, in the early months of PPP loan disbursem*nt, reports on business closing reported that up to 40-60 black small business owners were treated unfairly given percent of all businesses (particularly restaurants) were established biases in the financial service industry further going to close for good (Yelp, 2020). A year later, recent amplified during the early months of the COVID-19 reports show that such a percentage of business closures pandemic. is around half of that, thanks to federal initiatives and the
6.0 Black Business Owners in Durham, NC: Coping with and Responding to the COVID-19 Impact
This section explores the goals, perspectives, and actions reflections indicate that business-leader experiences of black business owners amidst the COVID-19 pandemic are heavily rooted in the following categories: (1) Needs and the unfair funding landscape characterized by the and Aspirations, (2) Identities, and (3) Adaptations and Paycheck Protection Program (PPP). Their stories and Innovations.
6.1 Business Owner Preferences: Their Needs and Aspirations
What characterizes black business owners’ desires, hopes, Furthermore, one business owner in the food-services and goals amid the COVID-19 pandemic? While reflecting industry revealed his belief that his business would not be on their views of success, participants shared visions where it is today “without access to capital to grow.” of making broader impacts in the community, having pleasant interactions with their customers and clients, Participants stressed that they needed resources, equal and reveling in the activities that bring them peace. For avenues for getting those resources, funding, knowledge some participants, moving past the COVID-19 pandemic on how to access development funds, programming has not simply been about business growth in monetary opportunities on the fundamentals of business terms - it has been about fostering positive views for their operations, and “education on what it is that you need future lives even outside the realm of their money-making to be able to get sustainable funding for your small business. business.” The financial needs of business owners align with the notion that black business owners face steep In line with the statement from one business owner in the obstacles to accessing capital. arts industry – “you don’t know what tomorrow holds, you can definitely plan for what the future is going to look Historically, credit and loan discrimination have dictated like” – business owners were eager to share their views financial pathways for black business owners. In fact, on how the future should look. Their stories reveal that past literature finds that access to credit and financing while their needs are monetary, their broader hopes and are especially inadequate for black-owned businesses aspirations extend beyond their financial requirements. across different stages of the business life cycle (Farlie & Robb, 2008). Racial wealth disparities in the U.S. provide When asked to envision a policy or programs that would the context under which black business owners find be helpful to their endeavors, eight out of the ten themselves in need of increased access to capital, or participants alluded to the importance of having “access at least to the pathways that can guarantee them more to capital.” Their responses provided insight into their equitable funding resources. Black Americans are less foundational needs as business owners. A business owner likely than their white counterparts to have their business of a firm in the financial-services industry stated his belief loans approved “and the loans they do receive from that “most businesspeople understand that to grow financial institutions are much smaller than those flowing your institute...to grow your business, you need access to white business borrowers'' (Bates, 1998, p. 203). to capital… Some firms have it. A lot of firms don’t.”
Black Wall Street of the South: From Reconstruction to the Pandemic 47 A participant in the real estate industry stated that actively involved in the life and vibrancy of their business success for him is about “the continued flow and source life and not simply occupied with the inner workings of of income.” He believes that steadiness of monetary their business operations. They want to experience their flow of income is critical to his success. Similarly, a business alongside the customers that they are serving. business owner from the food services industry stated that success for her and her husband was just about A business owner in the arts industry stated that his “being able to make a living.” Apart from sharing their business scores success based on “the attitude of the hopes for individual financial security, the business people when they leave” and not necessarily from owners stated their desires to be a part of a society “how much revenue [they’re] bringing in.” Similarly, a where getting access to capital does not necessarily business owner in the food services industry revealed increase one’s burden or debt - one where businesses that she and her partner were not “money-driven.” can receive support “without being taxed for it...without Instead, they consider themselves more “experience- it being a financial burden.” In fact, one business owner type people.” They stressed that they tend to lean on in the food industry stated that he hoped for “...access the experiences that “feel right in [their] spirit.” They to capital without any strings attached, without looking expressed their excitement for integrating traveling into at my credit score, without looking at my family's history, their business practice — going overseas and trying or my zip code, or this, that, and the third, even my skin different spices. Similarly, one owner in educational color. Judgment free…” services shared her dreams of living a life of peace — one that awards her the ability to “be across the Business owners acknowledge that their business should country, somewhere across the world, somewhere.” provide them enough financial security to make ends Another participant called herself an “impact business meet. Yet, many other business owners also made sure owner.” As a business owner in the realm of spiritual to highlight the wealth of non-monetary factors that healing, she noted how her visions for success are played into their ideas of success. One business owner rooted in philanthropy, in the community, and her in the food services industry shared her dreams of being desire to “teach and guide... the collective.” Finally, at ease as she welcomes her customers entering into success for one business owner in the financial-services her business site on a day-to-day basis: “I just want to industry stated his belief that success is about helping sit there with my hands crossed and wait for my favorite other small and medium sized businesses grow: “our customers so that I can say “How are you today?” She success is helping the community.” All told, the business and her husband stated that they “never hopped into owners acknowledged and stressed that their success as [business ownership] with the idea of making millions.” business owners was all-encompassing. Many of their goals to this day rest on the idea of being
6.2 Business Owner Perspectives: Their Identities
The contours of business-owner experiences during business experiences as intertwined with their racial COVID-19 were shaped in large part by participants’ identity: “Collectively, in the minority community, funding varied, often intersecting identities. It should be noted is a lot less for us. It is more difficult for us to be able to prior research delineates social identity as referencing get the funding that we need for our businesses.” “the economic and social meaning that a society attaches to particular phenotypic characteristics or Gender and racial discrimination pre-COVID drove some distinctive cultural practices” and race as “both an business-owners to make decisions in regard to how to aspect of personal identity and a form of productive represent themselves and their businesses across public- property” (Darity et al., 2000, pp. 8-9). Respondents facing materials, including their own firm’s website: reflected on the role of their social identities, specifically “For the first three...years of our business, we didn't race, in forming their business experiences both during have our face on anything, because we didn't want the the pandemic and before it. discrimination of being a female-ran black business… We wanted you to taste our food… and that's it.” As one owner of one family owned firm revealed: “Yes, I'm a black caterer. We've lost a lot of business because Gender and racial discrimination also structured the people go, ‘oh, your prices are too high.’ And what they areas of Durham in which black women business owners were really saying was, ‘for a black person, your prices were told it would be viable to house their offices are too high.’” Other owners reflected on their economic by institutional actors and the gendered, racialized
48 The Samuel DuBois Cook Center on Social Equity at Duke University violence they may face in moving to such predetermined learning, homeschooling, and full-time childcare. This locations: “I have to tell people, listen, we are two owner adjusted her firm’s operational schedule in light females… I [am] sometimes in my kitchen until midnight. of these gendered, raced realities, all while meeting I do not want to be in a neighborhood that has the customer demand; she did so through adaptive highest crime rate because I am a black owned business innovation in the face of structural gendered racism and you want me to support my black community that is faced by both herself and the majority of her employees. developing, but you wouldn't even go there yourself.” Recent research has shown the COVID-19 pandemic Findings from the quantitative component of the in many ways further exposed endemic, structural study illustrate the funding gap observed for black gendered racism, pursuant to the fact women of color female business owners comes through the racial disproportionately “occupy disadvantaged positions funding gap. In other words, black female owners face within households, occupations, and health care similar biases as black male small business owners institutions, and therefore face heightened risk for throughout the PPP loan application process. Race COVID-19 and lowered resources for mitigating the persists as a “master category of social differentiation” impact of the deadly virus” (Laster Pirtle and Wright, in the United States (Seamster & Ray, 2018, p. 315). 2021, p. 168). An emphasis on household responsibilities Although these PPP data do not reflect a significant was echoed in business-owner responses, with female difference in treatment between black women and entrepreneurs demonstrating a heightened care for men—i.e., race appears to trump gender in shaping female employees and describing the labor burden business disadvantage in Durham—findings from the associated with owning a business during the COVID in-depth qualitative interviews suggest gender critically crisis all while “trying to be a wife and a mother and intersects with race to inform the business experiences keep the house clean and do laundry...” of black women entrepreneurs before and during the pandemic, particularly in the context of operational Initially denied the first round of PPP funding by her and funding experiences. For example, using the 2019 long-time bank, one woman business owner in Durham Durham Business Survey, we find that the total revenue had a suspicion that bank representatives were sharing distributions for black male and female business owners the procedures and protocols she developed during are statistically different (see Table 5.2 titled “Testing the COVID-19 pandemic back to other non-black, Rank Distribution of Business Revenue by Racial and non-female-owned firms with whom they did business. Gender Groups of Ownership”) which highlights Again, this case displayed a pattern of institutionalized, different operations and funding experiences. gendered racism and racialized information systems potentially laid bare by the pandemic: “[they] started Existing research has examined the singular position asking me questions about policies and protocols [I’d black women entrepreneurs occupy at the intersection implemented during COVID-19]. I got the impression of persistent racisms and sexisms, while also that [they were] taking that information to carry back to acknowledging entrepreneurship literature provides [other providers].” conflicting evidence in regard to the significance of gender in determining economic entrepreneurial Black business owners interviewed in Durham derived success, in-line with the quantitative findings (Robinson power from their varied, intersecting social identities, et al., 2007, p. 146). Useful in analyzing data from the particularly race. They valued increased support from in-depth qualitative interviews, however, literature community members and groups which demonstrated a on black women entrepreneurs has emphasized legitimate understanding of who they were and viewed “entrepreneurship does not take place in a vacuum,” their intersecting identities as bearing disruptive strength: but rather in various social settings fundamentally “we are women-led, black-led, veteran-led, LGBTQ-led structured by the racisms and sexisms which undergird business. And we're out here and we’re disrupting the the U.S. as a settler-colonial project (Glenn, 2015; norm of what it looks like [to be in our industry].” Robinson et al., 2007; Seamster & Ray, 2018). Other participants cited their racial identity as During the COVID-19 pandemic, one woman business contributing to their ingenuity, creativity, and owner in the medical field took extra care in considering perseverance in the face of institutional racism during the evolving realities of her predominantly female the COVID-19 crisis: “I think especially with African- employee base. The pandemic meant many of her Americans, you know, we are very resilient….I've dealt employees with children were now not only at-risk with, you know, not having a right, so. But how do I get? of contracting the virus due to their role as medical How do I make this work?” professionals, but were also responsible for daily virtual
Black Wall Street of the South: From Reconstruction to the Pandemic 49 One corporation in the financial-services sector similarly under the racial justice rubric. While acknowledging prioritized the continuance of other businesses of color Buy Black movements as no panacea for rectifying during the pandemic, ultimately leading to their firm’s “discriminatory practices, institutions, and legislation” best year in its history: “What we do is kind of grassroots and unequal access to capital which have shaped black in terms of helping small and medium-sized businesses, entrepreneurship for centuries, multiple respondents specifically minority businesses... 70% of the businesses expressed positive aspects of their experiences of the [we provided loans to] were businesses of color. It was Buy Black movement in Durham, at least in the short- definitely necessary to help them sustain themselves term (Bogan and Darity, 2008, p. 2018). The positive through the pandemic...” experiences of business owners were primarily linked to black solidarity and strengthening of entrepreneurial In contrast, one business owner described the possibility networks. As the owners of one family owned firm of black-owned businesses to exist in a “silo-type stated: “People really showed out, our people showed situation,” partitioned away from other firms in their out by purchasing. We really enjoyed it. [Buy Black industry and corresponding networks and relationships. initiatives] also allowed us to have some access to This perspective underscores the importance of mentors that we wouldn’t have had otherwise.” Similarly, relationships, interactions, and networks for business another owner emphasized the solidarity born out owners during the COVID-19 pandemic, specifically in of the Buy Black movement both prior to and during determining the degree to which their firm had access to the pandemic, echoing a trend of Durham businesses information, support, and avenues to financing, as well supporting other businesses: “Durham is very unique in as the potentially racialized nature of such networks. the sense that [black-owned businesses] all support each other… As you can see, I have on a ‘Black August in the One central theme which touched all business owner Park’ t-shirt. Juneteenth [2020] there was a huge push to experiences during the COVID-19 pandemic was the Buy buy black, to eat black, to spend black…” Black movement, particularly during the summer of 2020. Juneteenth especially marked for many business owners The beneficial business experiences with Buy Black in Durham a period of unprecedented sales and customer initiatives during COVID-19 were characterized by activity. It should be noted the Buy Black movement did increased solidarity with other black entrepreneurs, not originate with the COVID-19 pandemic. customers, and the growth of entrepreneurial networks. The uptick in business initiated by Buy Black initiatives, Buy Black movements have a long, rich history, however, was not experienced as a universal good envisioned as a positive, political initiative to keep across respondents. Multiple participants described money flowing within and across black-owned firms the Buy Black campaigns as fleeting after observing and communities (Jeffries, 2020). Historically, Buy a sharp decrease in patronage by primarily non-black Black initiatives have likewise prioritized increasing customer bases following the movement's initial surge support for black-owned firms as one strategy to in summer 2020. The sharp increase and subsequently counter white hegemonic narratives that goods and sharper decrease in patronage by non-black customers services produced by black people are fundamentally when engaging the Buy Black movement prompted lesser and to circumvent white-owned businesses in questions with respect to who has historically bought black neighborhoods which mistreat and cheat black black and who hasn’t, and the cyclically reactive, customers (Jefferies, 2020, p. 3). Activism in the sphere performative nature of non-black customers in engaging of consumerism has a longstanding place within Buy Black movements immediately following instances movements for black power and liberation, particularly of premature black death at the hands of the state, as spearheaded by black women (Brown, 2017). While a potential symptom of what has been termed the positive political-economic movements rooted in black “pseudo white awakening” of 2020 (Melton, 2021). As solidarity and self determination, buying and banking one owner in child-care services said: “I don’t see a black have long been billed by policymakers and the big change, because people of my culture, [they know private sector alike as single solutions to the racial wealth my business is] black-owned. I don’t really put that gap and black firms’ success, rather than the creation of out there; I mean you see that when you look at our an inclusive and just economy (Darity et al., 2016, p. 8). company.” Another one owner stated: “I've been doing Attitudes toward the Buy Black movement in Durham this for about 30 years, and, a lot of times, these kinds of varied across the respondents. Their responses things happen and then it goes back to normal.” provide insights into business owners’ perspectives and experiences in the COVID-19 world as well as their perception of various currents of thought
50 The Samuel DuBois Cook Center on Social Equity at Duke University The reactive, transient nature of non-black patrons Multiple respondents expressed a desire to be when buying black in the summer of 2020 led business recognized for their products or services and rejected owners in Durham to describe Buy Black campaigns as being reduced to what they saw as a gimmick or an unsustainable long-term solution for the continued token. One family owned firm decided not to include success of black-owned firms, despite increased a picture of themselves on their website to avoid “the business and revenue in the short-term. As one owner discrimination of being a female-ran black business.” stated: “That Buy Black initiative [during summer Instead, they placed an emphasis on their product. 2020], that worked. But then after a couple of months, everything started to die down, to below normal. So Other respondents provided insight into the complex then it's like, OK, do the black lives really matter?” realities they confront as business owners in relation The attitudes expressed by predominantly non-black to their racial identity. One participant reflected on customer bases in engaging the Buy Black movement how he derives fulfillment as a business owner and the in Durham further contributed to business owners' psychological impacts of being viewed as a pet project: psychological experiences during the COVID pandemic. “I don't want my business to be considered, ‘Well, As one owner said: “Fast forward to 2021, when we're let's just support him because he’s black.’ You know, around the same time as last year. And there haven't I'd rather not have that. I would rather you support me been any strong Buy Black or Shop Black Owned because you know what I've done to get to this point, movements… I'm kind of numb to it.” everything I have lost to get to this point. I would feel more fulfilled by that…'' The state-sanctioned murders of Breonna Taylor, George Floyd, Tony McDade, among countless other black Consumer patronage outside of the confines of tokenism, Americans—and the ground-level community response as well as the universal desirability of their product, also to these murders by police and other forms of racist was a theme underscored by the business owner in violence in demanding justice—joined the Buy Black the arts industry: “I'm not doing a play just for African- movements of 2020 in shaping the psychological and Americans… I also want other people to come see it. As business experiences of owners. As one business owner artists, we sell tickets. And tickets have no color in terms shared: “With the unfortunate passing of George Floyd, of who should buy. I think that's what makes it important it definitely was a movement across America… I mean, for other people to see [the performance] so that they it was an unbelievable feeling just for me... Of course, can learn about each other's culture.” everybody was enraged… but you shouldn't have to Industry-based groups of black business owners have a tragedy or anything like that happen for people provided networks for multiple owners to receive and to, say, support of black businesses… that should be share information outside of more institutionalized happening regardless.” channels. One owner spoke to the importance of For several firms, the influx of consumers during the Buy this network of black business owners within the real Black movement of 2020, especially around Juneteenth, estate industry: “we've managed to do a good job inspired positive feelings, while also generating feelings of supporting each other and helping [each other] concerning racist stereotypes of black-owned businesses. find, or source, or share information throughout this One owner in the real-estate sector stated: “I think those time.” Women business owner-respondents cited campaigns are good and they can be beneficial, [but] I groups of black business owners within their industry don't think that those campaigns help if the businesses as critical both to their firm’s survival during COVID that are being highlighted aren't prepared to execute and personal support. These findings suggest intra- well… A stereotype [of] black businesses [is that they] business communication and uplift via associations don't know what they're doing, and so particularly or groups of black business owners within the same because they're highlighted as such instead of just a industry, particularly for women business owners, was a business, any failure within those campaigns exacerbates key mechanism of firm strength and owner well-being the potential stereotypes.” Another firm in the food during the pandemic, even when these groups were not services industry described their record-breaking sales geographically limited to Durham. on Juneteenth as a “humbling experience,” yet noted Technology again becomes salient for business owners they faced challenges in managing the surge in demand in altering the conditions of possibility and generating when staffing and operational capacities were reduced community to sustain their firms, as one owner reflected due to the pandemic. Ultimately, they felt “overrun and on her use of Clubhouse chat rooms: “I'm in a lot of overwhelmed…,” a situation only made worse by the fact groups, so my support comes from them a lot...I could that “what people are seeing is probably not your best.” just click an app...So that brings a lot of motivation and
Black Wall Street of the South: From Reconstruction to the Pandemic 51 a lot of connections” Another owner underscored the extremely helpful. [Durham] is way different than [other importance of identity-based community in survival places I’ve owned a business]. [Other places] you hoard and success during the pandemic: “the black-business your resources, no one wants to share too much...” community, the minority women, everyone has just been
6.3 Business Owner Actions: Their Adaptations and Innovations
Often bolstered by the collaborative networks detailed You would think she was local, the way she drives my above, black business owners in Durham envisioned business and everybody who surrounds me… she is the and implemented countless innovations amidst the main person who I can call at any time.” pandemic. They did so imaginatively against the backdrop of government-mandated closures, potential One Durham business leader reported high levels of revenue losses, tenuous funding support, staffing customer and worker adaptability to virtual changes changes, discrimination, and a necessity to navigate initiated by the COVID pandemic, citing a 30 to 35 uncertainty as a praxis aimed at firm-survival. They took percent increase in utilization of online banking, mobile innovative steps also from a place of passion for their banking, and ATMs: “I think it was something that was business and out of their desire for personal fulfillment: going to eventually happen, but, because of COVID, “COVID-19 really made me go into the creative it actually accelerated our use and deployment of mode on how I'm going to pivot… I found a strength electronic banking services.” within myself. I didn’t even really know that I have the Findings from participant interviews show Durham- ingenuity, the ability to be able to be creative, the ability based business owners innovated and adapted not only to be able to completely pivot…” to ensure the survival and success of their businesses One family owned business in the food services industry in response to COVID-19, but largely to ensure the reported having adopted QR codes and more online survival and success of their communities. These results ordering in the past year. Another women business suggest that the majority of sampled business owners owner of a Durham-based child care agency said that designed and evaluated operational “pivots” made her lesson plans incorporated the “Three Ws” to staying during COVID through the lens of generating revenue healthy for her kids: waiting six feet, wearing a mask, and and their firm’s continuity; however, business leaders washing hands frequently. Other firms in the medical prioritized generating products, services, and programs profession re-opened on an abbreviated schedule, both that contributed to the present and future well-being to accommodate employees with children learning from of their communities in greater measure. Respondents home and to prevent employees from having to re-gown generated these services and programs even if such multiple times per-day in their now-standard N95s, face forms of communal support were not directly revenue- regular masks, and face shields in an effort to preserve generating to their firms. health safety. Multiple business owners created formalized extensions Despite appearing restrictive at the beginning of the of their businesses following the onset of COVID-19 pandemic, operational adjustments paved the way for in-partnership with local organizations to provide innovations to their business platforms that facilitated critical services for various communities in Durham. their way of “doing business.” Many participants took Accordingly, one owner shared: “We provide meals full advantage of the virtual business opportunities for frontline workers, senior citizens, families in-need, birthed by the pandemic. In fact, one participant and people can donate [to support that program],” acknowledged that “there are so many things with while another similarly stated: “Every Friday, we actually technology that we can do with business.” donate to the Salvation Army in large quantities. So we've made that a regular thing. Whereas just last year One participant in the food services industry stated that we did it just a couple of times, we do it every Friday she started “a virtual cooking show” with her partner now… It has actually been very humbling...” from their home. Another business owner in the arts industry stated that “because we were still able to These findings connect directly to recent research stream a show...we were still able to get a product out.” suggesting forthcoming studies would do well to Finally, the owner of the child care agency said that investigate the idea that “[b]lack self-employees with she was able to hire a “...virtual assistant in June [2020]. high racial capital may reject individual economic
52 The Samuel DuBois Cook Center on Social Equity at Duke University success as a remedy to racial inequality” and instead more so than any time in recent history, although “own collective businesses that dedicate their profits the pandemic in no way created them (Laster Pirtle to addressing racial disparities” (Bento & Brown, 2021, and Wright, 2021). Black business owners in Durham p. 33). This connection may hold in spite of the fact responded with creative innovations to alter the communally focused programs innovated by black conditions of possibility—for their businesses, other business owners in Durham during COVID were not firms, and myriad Durham communities. aimed solely at one racial or ethnic group given the racialized landscape of wealth and health disparities in Contradicting cultural-determinist literature (see e.g. the city. Business owners saw their innovations in-service Light 1980 as representative of the cultural-determinist of community as a part of a reciprocal system of care, perspective) on black entrepreneurship, which posits critical to their firm’s continuance during the pandemic: black communities are too individualistic and do not “During this time of the pandemic, us showing the have the networking and solidarity that support business community that we give back during a time like that in other communities, respondents defined success of definitely gave us more support. We really were able their firms through the present and future wellbeing to withstand a pandemic because of it, because of us of communities and other members of the business being part of the community, giving back…” ecosystem in Durham across sector, customer age, race, ethnicity, and any other individualizing factor. As detailed previously, black business owners in Durham Innovations and adaptations business owners designed (and nationally) have a long history of introducing during the pandemic arose directly from networking new products and services (Bogan & Darity, 2008, p. (both in-person and virtually through channels such as 2004; City of Durham, 2019, p. 61; Du Bois, 1912). The GroupMe and Clubhouse) and from solidarity—solidarity COVID-19 pandemic has been cited as rendering with their employees, with other owners across racial- more visible “the stark social, financial, and political ethnic groups, and with residents of the city of Durham inequalities that define life for many Americans,” at-large.
Policy Strategies: A Vision for the Future
In the short- and immediate-term, it is most important Recovery Fund continues to hold loan capital, while the to assist black-owned businesses, as many as possible, grant fund is empty. This provides evidence that firms, to survive the ongoing crisis, even as Durham and other especially black-owned firms, are leery of taking out markets continue to move towards a full reopening. loans and prefer accepting grant funds. This may seem Early in the COVID crisis, as a response to the challenge an obvious choice for any business, but those founded of small businesses in Durham, the City and County of and led by black entrepreneurs are particularly hesitant to Durham, in partnership with Duke University established take on debt as a means of temporary relief. One reason the Durham Small Business Recovery Fund. The fund for this is that many black firms were already struggling was administered by the Carolina Small Business prior to the pandemic-driven recession. While white firms Development Fund, a Community Development Financial might expect profitability to return once the economy Institution based in Raleigh, North Carolina, and included fully resumes operations, coupled with the expectation $2 million in loanable funds by the public bodies and $1 of fully forgivable federal loans, the prospect of black million in grantable funds by Duke.3 Though the funds firm owners borrowing money – even from a favorable were race-neutral, they did aim to be inclusive of racially municipal loan pool – can be daunting and stressful. diverse businesses – including black businesses. Consequently, Durham should consider a number The grant capital provided by Duke University proved of policy efforts to support local black businesses to be the most popular resource, and it was quickly in the short- and medium-term, while ensuring they expended, whereas the loan capital was not sought out are stronger going forward and well into the future. as fervently. Consequently, the Durham Small Business The American Rescue Act of 2021 provides a unique
3 https://www.durhambusiness360.com/DocumentCenter/View/209/Durham-Small-Business-Recovery-Program-Report-7
Black Wall Street of the South: From Reconstruction to the Pandemic 53 opportunity to provide such capital to black businesses, were gutted by the location of federally financed as the Biden Administration has encouraged capital highways in their midst (Mohl 2008). investments related to addressing historic racial inequities. As such, Durham should consider piloting The inadequate response from America’s federal significant policy engagement related to the black government towards African American businesses, business community that is reparative in nature. The including those in Durham, sets the stage for public and basis of this reparative investment must be capital. private reparative justice in Durham. Actionable policy should directly address the impact of the COVID-19 In Durham, a key past harm related to the current Pandemic on Durham’s black business community and condition of the black community is the city’s particular black economic infrastructure. However, such policy role in the destruction of the historic Hayti community, should also be reflective of the status and condition inclusive of the black business community. The of Durham’s black business community prior to the construction of the Durham Freeway through the heart pandemic that were results of the damages directly of Hayti, destroying, by some estimates, hundreds of caused by the Durham Freeway construction, as well as businesses and thousands of homes, simultaneously the many decades of under- and lack of investment in destroyed the economic base of the black community. the community.
However, highway construction as a mechanism for To begin to rectify past and present harms, it will be leveling black communities and black owned businesses important for Durham to put forth a bold plan for was a national phenomenon, supported, in large investments in its black economic ecosystem. These measure, by federal funding. Nashville, Tennessee, New efforts and actions will be neither inexpensive nor Orleans, Louisiana, Montgomery, Alabama, Kansas City, swift, but they must begin immediately and remain Missouri, St. Paul, Minnesota, Tampa-St. Petersburg, constant. These short-, medium-, and long-term Orlando, and Jacksonville, Florida, Atlanta, Georgia, policy interventions were necessary components of Columbia, South Carolina, Los Angeles, California, any successful up-building of Durham’s black business Camden, New Jersey, Charlotte, North Carolina, and community prior to the pandemic; they are even more Milwaukee,Wisconsin, all are examples of cities where transparently essential following the COVID-19 pandemic. black business districts and stable black communities
Short-Term, Medium-Term, and Long-Term Interventions
FIGURE 5. Needed COVID-19 Tiered Responses for Durham Black-Owned Businesses
Short-Term Medium-Term Long-Term ➤ Immediate Cash ➤ Strategic Technical ➤ Procurement & Infusions Assistance Supply Chain ➤ COVID-related ➤ Partnerships opportunities ➤ Investment
Source: Authors
54 The Samuel DuBois Cook Center on Social Equity at Duke University Short-Term: Immediate Cash Infusions Medium-Term: Market-based Strategic Durham should take knowledge learned from the Technical Assistance and Connective Durham Small Business Recovery Fund and structure a Opportunities for Durham’s program to support locally owned black business firms Black-Owned Businesses that focuses on grant capital versus loan capital. Black Though immediate capital grants allow for short-term firms in Durham need access to immediate capital, but survival of Durham’s African American businesses in the capital that will not encumber their future survival, but midst of the ongoing pandemic, and tepid reopening will instead enhance it. of the economy, it fails to adequately address the The CARES Act, specifically the Paycheck Protection future positioning of those businesses in the broader Program, and especially in the first round, failed to marketplace. To some extent, the majority of Durham’s adequately reach the most vulnerable and neediest black-owned businesses, even pre-pandemic, were businesses – which includes the majority of black-owned simply – and barely — surviving. The goal should be to firms in America. The second round, and subsequent move a greater share of those firms from an existence attempts, did not and have not fared much better even that is one of merely surviving to one of thriving. In order with such targeting language. to achieve this, black-owned firms in Durham will need to both adjust to the modified and truncated pandemic- Though Durham’s economy continues to reopen, induced marketplace, as well as position themselves more many black businesses continue to struggle with strongly for the post-pandemic return to a fully opened future uncertainty. Immediate funds would be helpful economy. This will require a medium-term response and in stabilizing the black business ecosystem where it intervention to support these local black businesses. is and reduce the possibility of further loss of such establishments in Durham. But it is also critical to find Strategic Technical Assistance the most direct way to get cash to black business owners. Cash is king. Thus far, with PPP, the primary To support the former, adjusting to a modified vehicles for cash distributions have been traditional marketplace, black-owned firms must be supported banks, a reality which has worked against black-owned in this transition – which must also be on a hastened businesses. Continuing to operate a Durham grant schedule – to ensure as markets are reopened program via the Carolina Small Business Development that black-owned firms can take advantage of new Fund would likely be an efficient way to expand the knowledge. As the marketplace has shifted, so have impact of grants. the parameters for operating. Some black-owned businesses, because of limited capital resources in the The City and County governments of Durham should past or just outdated operational strategies, have been allocate significant funding to such a grant pool, unable to evolve with the pandemic marketplace – and targeted at historically underutilized businesses. To prior. For instance, some cash and carry businesses create such a grant program, the local governments might need assistance moving to operations that are would have to consult with their respective legal inclusive of the acceptance of debit and credit cards, counsels to understand the constraints they have on utilizing online and mobile application transactions. providing such funds since this capital might seem to be This type of technical assistance (TA) would have in “competition” with the private sector — which might both immediate and long-term positive impact on be considered illegal. However, the public governments the business, allowing them to remain operational might be able to create incentive agreements with during truncated marketplace conditions, as well as Durham’s black-owned businesses focused on being better positioned after those conditions have community benefit agreements of sorts (based on the normalized – or whatever this new normal will be. impact they will have on the overall black community). Many business sectors could benefit from market-based Finally, an additional aspect of the immediate cash strategic technical assistance for a post-COVID world. A grant program could allow for retroactive grant making broad range of black-owned firms could take advantage to black-owned firms that shuttered their doors as a of such a resource. Durham should work with strategic consequence of inadequate and unequitable distribution partners, such as the Greater Durham Black Chamber, to of original PPP funding. In other words, if a black business inventory the black business ecosystem in the city (see owner in Durham can prove they had a business prior to Appendix). These businesses can be invited to take part COVID-19, and were denied an adequate opportunity in the Durham Strategic TA Capital Access Program. to save their business, they would be able to get a retroactive loan or grant to restart their firm.
Black Wall Street of the South: From Reconstruction to the Pandemic 55 Such strategic assistance could range from traditional chains, policies, and practices – as well as the culture areas such as legal and accounting advice to more that drives them. Many of these cultural practices non-traditional advisory like intellectual property to have adopted automatic diversity goals of 10 percent certification of these businesses. Though these skills of procurement opportunities, even though diverse and designations were equally important prior to the populations comprise a much larger share of the local pandemic, they might allow black-owned firms to better population. For example, Durham has an African position themselves for post-pandemic opportunities. American population of nearly 38 percent, a Hispanic Technical assistance should be strategic to the firm’s population of over 13 percent, and a 5 percent Asian competitive positioning, as opposed to arbitrarily population. Even a procurement “stretch” goal of 25 chosen topics. Consequently, black-owned firms in percent, does not equitably equate to the 60 percent Durham should be able to procure these services from of diverse residents in the community. Consequently, any provider in the marketplace, and not rely on having a first-step toward economic equity is for Durham’s to go through government-specific programs. Business public and private sector players to reconstitute their owners and entrepreneurs should be able to engage in procurement goals to be more reflective of the local broader training activities that would support the growth community’s changing demographic landscape. of development of them, their employees, and their firms, inclusive of educational workshops and higher Sliding racial procurement goals should be adopted education courses. based on the demography of Durham. This would create a greater probability that local tax payments or consumer dollars paid and spent by the black Connections community would recycle back through Durham’s black Durham has an array of black-owned firms that are at community economic ecosystem, as well as other racial different stages of their development and journey. and ethnic groups. These firms might also benefit from additional reskilling or retooling, but could already be positioned to take Incentivizing Durham’s Black advantage of opportunities that present themselves. Durham local governments can survey the local Business Development landscape to identify real and immediate, as well as White-owned firms are constantly presented with and ongoing, COVID-19 related opportunities that can be offered recruitment incentive packages that include subsequently connected to and procured to qualified billions of dollars in tax credits, workforce development black-owned firms. investment, and property/site development subsidies. These economic development incentives are leveraged Long-Term: Scaled Up Public and at both the state and local levels and are a significant part of Durham’s economic development strategy. Private Investment and Opportunity Black-owned firms rarely, if ever, receive access to local for Durham’s Black Businesses Durham subsidies. Such disparate racial activities further It will not matter if short-term strategies of cash grants, widen the associated business inequity and wealth gaps. and medium-term strategies of strategic technical Durham’s public bodies should prepare for a post- assistance and COVID-related opportunities, position pandemic landscape that supports black business growth Durham’s black-owned firms for a future of wider and expansion through leveraging dedicated efforts and prospects if those wider prospects never materialize. As resources to black-focused public-private partnerships. the old axiom professes, “culture trumps policies every time.” Though inclusionary policy is important at the These short-, medium-, and long-term activities each local government level, as are devoted and enthusiastic require investments of time, energy, effort and capital. diversity, equity, and inclusion champions, if measurable They have the potential to positively impact the black impact towards equity is the desire, Durham must business landscape in Durham. These strategies change enduring cultural practices that have become should be coupled with broader efforts in the city to innate operational practices. create the most robust ecosystem for developing black entrepreneurs and ultimately successful black-owned businesses. This will entail changing the current culture of Increasing Inclusive Procurement for black entrepreneurial development in Durham through Durham’s Black Businesses more narrowly focused strategy and measurement. Both public and private entities that operate in Durham should reevaluate their procurement portfolios, supply
56 The Samuel DuBois Cook Center on Social Equity at Duke University 7.2 Broad Transformation: Changing Durham’s Inclusive Entrepreneurial Culture
FIGURE 6. Key Strategies for Permanent Transformation of U.S. Black Business Competitive Ecosystem
STRATEGY 1: STRATEGY 3: Increase Diversity of Black Entrepreneurial Increase Scale and Diversity of Capital Available Pipeline to Black Entrepreneurs and Businesses
STRATEGY 2: STRATEGY 4: Expand Place and Space Available to Removal of Barriers for Black Entrepreneurs Black Businesses and Businesses
Source: Authors
Developing Durham’s Black familial networks, employment, and financial support Entrepreneurial Pipeline (i.e., entrepreneurial capital), ensuring a pipeline of skilled black entrepreneurs, and more racially equitable Firstly, Durham’s black entrepreneurship pipeline business outcomes in perpetuity. must be broadened, strengthened, and diversified – specifically relative to sector and industry diversity. As an important component of Durham’s black Black entrepreneurs are often pigeon-holed into narrow entrepreneurial pipeline development, the local public constructs within key industries, expected to only engage bodies should aim to ensure that young black youth in entrepreneurial efforts related to their race/ethnicity, be exposed to innovative environments as early as or aggregated into low-margin and low-wealth service possible. Research suggests that the younger children sectors. Lifestyle businesses such as barbershops, beauty are introduced to innovation, the more likely they are to salons, lawn care businesses, janitorial services, and develop innovative ideas as adults. handy services are fine undertakings, but cannot be the sole or primary representatives in a business ecosystem Developing Diversity of Place and Space that expects to thrive and create wealth for the broader for Durham’s Black Businesses community. Durham should assess emerging industries and opportunities relevant to the local economy and A second strategy critical to the broader success of support the development of black-founded and owned African American businesses in Durham is expansion firms to engage in those activities. This engagement of geographic, place-based diversity. Durham’s black- should not simply be at the peripheral level, but also as owned businesses should not be resigned to exist leaders in these locally important and growing industries only in the city’s lowest-income and highest-poverty and sectors. census tracts nor exclusively in racially monolithic ones. Commercial and retail gentrification has occurred in The implementation of this strategy must pay a parallel to residential gentrification in Durham. The particular focus on increasing the representative economic integration of Durham went one way following pipeline of black-owned firms with paid employees social integration and the construction of the Durham and those that operate nationally and globally. Each of Freeway – with black dollars going into the white these various pipelines – industry, size, and type – will business ecosystem of the city. This coupled with a regenerate themselves once adequately up-built. At that lack of investment in the black physical infrastructure of point, successful mentor-entrepreneurs and businesses Durham has left Black Durham economically hollowed from Durham’s black community will support the next out. Consequently, black-owned firms in Durham have generation of black individuals and firms through gotten pushed into the most economically desolate inspiration, experiential opportunities, social networks, zip codes, until those zip codes themselves begin to
Black Wall Street of the South: From Reconstruction to the Pandemic 57 gentrify, at which time those same increasingly-nomadic allows firms to grow faster, and create more wealth, than black-owned firms get pushed into ever poorer areas debt does. If the Durham black business ecosystem (if they exist), or shuttered all together. Thus, a firm’s is to ever equitably compete and compare to their geographic location in Durham can be either a wealth demographic counterparts, they will have to access generator or a wealth stripper. significantly more capital. Durham public bodies should find creative ways to provide equity-like capital to the Durham’s black-owned businesses should be given city's black-owned businesses. strategic resources and help in positioning themselves within valuable real estate areas. In addition, these firms should be given the opportunity to lead and anchor Removing Barriers for Durham’s those efforts when revitalization is happening along Black Businesses historically black corridors. In Durham, these areas Finally, the fourth strategy needed to ensure an include the Fayetteville Street Corridor and Northeast equitable environment where black-owned firms can Central Durham, among other historically black areas. innately thrive across Durham is to remove all remaining Financial resources or government-owned property in barriers not captured in the previous three strategies. Durham should be made available to support real estate This category is meant to be fluid and broad, with little positioning to ensure that black firms are not left out definition. Durham’s African American-owned businesses of high trafficked and high growth, non-minority areas have not suffered because of one or two racist policies of the city. Such expanded geographic positioning or practices, though some are certainly more inherently will allow Durham’s black-owned firms to capture more debilitating and incapacitating than others. Instead, diverse dollars. black-owned firms have had their success suppressed by the sheer magnitude and velocity of the barriers – Helping Durham’s Black-Owned Businesses entrepreneurial, business, and economic death by a Access More Diverse Capital Sources thousand paper cuts. Truthful conversations should be conducted with Durham’s black entrepreneurs and firm Thirdly, but most importantly, the scale and diversity owners to capture information on the myriad of barriers of capital available to black-owned firms, and the that they face on a routine basis, which causes individual entrepreneurs who create them, must be central to any and collective harm to the entrepreneurs, businesses, strategy to broaden the business success landscape in and the overall Durham black business ecosystem. Durham. Capital connects to both previous strategies The Durham public sector should aim to systematically – pipeline development and geographic positioning remove as many needless barriers to black business – in crucial ways. Without adequate access to capital, success as possible. it stymies not only the types of industries and sectors that Durham’s black entrepreneurs can enter, but also Undertaken collectively, cooperatively, and consistently, what types of entrepreneurs will even attempt to enter these four broad complementary strategies have the market. Local industries with high capital barriers the potential to provide the groundwork for an to entry are often those which have the potential entrepreneurial and business ecosystem evolution that to generate the greatest wealth. Durham’s black supports robust black entrepreneurial growth in Durham. entrepreneurs must have access to capital to pursue The most important aspect is to normalize both black higher risk, higher opportunities. business inclusion and success in Durham and to expand its relevance beyond diversity and inclusion cycles into In addition, geographic positioning in the highest the regular culture of the city. A sustained and significant growth areas of Durham also requires access to Durham commitment to invest in these strategies post- substantial, and often patient capital. Current capital COVID-19, would initiate this important effort. Durham’s available to black-owned businesses are both limited current inequitable landscape did not happen overnight, and restrictive. Unquestionably, black entrepreneurs and and it will not be cured overnight. However, the most businesses in Durham need access to more equitable effective process for Durham to be successful in bank credit, but they also need access to more diverse permanently changing its black entrepreneurial culture is kinds of capital as well. Most critically, they need access to key in on the proper measurements (Figure 7). to venture, equity, and more flexible forms of capital at significantly greater and equitable scales. Equity capital
58 The Samuel DuBois Cook Center on Social Equity at Duke University 7.3 Monitoring Specifics
FIGURE 7. Six Key Metrics for Monitoring Overall Black Firm Progress in Durham
MEASUREMENT 1: MEASUREMENT 3: MEASUREMENT 5: Number/Share of Black Amount/Share of Diverse Public Geographic dispersion of Black Businesses with Paid Employees Capital available to and invested Businesses Across Diverse in Black Entrepreneurs and Black Economic Zip Codes Businesses
MEASUREMENT 2: MEASUREMENT 4: MEASUREMENT 6: Amount/Share of Black Business Amount/Share of Diverse Private Number of Black Children Revenue with Paid Employees Capital available to and invested being introduced to innovative in Black Entrepreneurs and Black environments in elementary, Businesses middle, high school; college; and beyond
Source: Authors
Any meaningful undertaking without definitive metrics to track progression towards success is one that is doomed to fail. This proposed effort is no different.
Benchmarking Equity in Durham Durham’s Investment into the Up-building of Durham’s Black Business Ecosystem As an anchoring benchmark, Durham’s demographic population share should be used as a reflective and As a means of addressing both the negative COVID- suitable guide of equity and distributive outcomes in related impacts of black businesses in Durham, and the business and entrepreneurial related statistics. In other previous harms imposed on the local black business words, Durham’s black resident population of nearly ecosystem, as well as strengthening the future black 38 percent should be matched with nearly 38 percent economic infrastructure, Durham policy must focus on of business and revenue share. This measurement a long-term and permanent commitment of reparative benchmark will allow city leadership to track Durham’s investment. To facilitate such an ongoing investment – progress towards equity and the impacts of various and investments – Durham should create a “local block policy strategies on this pursuit. grant” program dedicated to this equitable up-building.
Black Wall Street of the South: From Reconstruction to the Pandemic 59 A block grant program dedicated to African American Durham’s Black Business Block Grant Program would be business owners in Durham could include some of the repository for all the capital funds utilized to support the same capital-matching components of the federal the short-, medium-, and long-term solutions expressed Community Development Block Grant (CDBG) program in this section. The City and County of Durham should but allow Durham the flexibility to partner with other collectively allocate at least $20 million of federal resourced institutions to get funding onto the street Rescue Act 2021 funds to this effort as a pilot and down more broadly and more quickly. Durham’s program payment to local economic activities. Furthermore, could be a model for a federally funded block grant Durham City and County officials should include program for supporting the ongoing reparative up- permanent annual budget allocations into this local building of the black economy. block grant program. These associated funds should be as flexible as possible for Durham’s black businesses to The American Rescue Plan with $350 billion of the $1.9 access, and should be operate principally as grant or trillion total designated for local and state government equity dollars (as opposed to debt). control.4 Durham received several hundred million dollars in American Rescue Plan aid. Since these federal funds are encouraged to be used to address historic racial inequities, Durham should apportion a significant amount of its funds to to address past and current harms to Durham’s black business ecosystem.
4 The White House (2021, April 28). Fact Sheet: The American Families Plan. Available at https://www.whitehouse.gov/briefing-room/ statements-releases/2021/04/28/fact-sheet-the-american-families-plan.
60 The Samuel DuBois Cook Center on Social Equity at Duke University Appendices – History
Chronology of Select Events In African American Life 1865 The Thirteenth Amendment to the U. S. Constitution abolishes slavery. 1866 Praise services are held in the home of Mrs. Margaret Faucette on Pettigrew and Husband streets, which would later be known as the White Rock Baptist Church, Durham, North Carolina. This congregation was the first black church established in Durham by blacks. The first known Juneteenth celebration was held in Texas and was known as "Jubilee Day". 1868 African Methodist Episcopal Zion minister Rev. James Walker Hood (later Bishop) served as Asst. Superintendent Public Instruction for the state of North Carolina, from 1868-1970. He later became a founder of Livingstone College in Salisbury, North Carolina. 1869 Durham is incorporated as a township of Orange County. St. Joseph African Methodist Episcopal Church opens in a little log cabin on Fayetteville Street. 1870 Congress passes Fifteenth Amendment, which gives blacks the right to vote. 1874 Washington Duke, along with sons Benjamin Newton and James Buchanan “Buck” Duke, builds first tobacco factory. 1875 The Civil Rights Bill of 1875 provides for equal access to public accommodations without regard to race. 1877 The removal of federal troops out of the south ushered in the end of the political, civil, and legal rights enjoyed by African Americans during Reconstruction. 1880 John Merrick, pioneer business leader, comes to Durham as a barber. He invests in real estate, builds his own home, and builds rental properties. 1881 Durham County is created.
Black Wall Street of the South: From Reconstruction to the Pandemic 61 1883 The Royal Knights of King David a fraternal insurance society was formed. 1884 A large public school for black children was located on South Street. James A. Whitted was a pioneer in public education in Durham. Other black schools included the Ledger public school in Hayti and the Hack Road School with J. A. Whitted as superintendent. Three to four hundred students were enrolled. 1892 The first known and recorded black college football game was played on Thanksgiving day, between Biddle University (now Johnson C. Smith University) (Charlotte, NC) and Livingstone College (Salisbury, NC). 1894 Noted reformer Ida B. Wells begins a national anti-lynching campaign. 1895 Dr. Aaron M. Moore helps to organize a community pharmacy and drug store in Durham for the benefit of black citizens and to help black druggists gain experience and obtain a business. The Durham Drug Company was formed during this year. The Durham Drug Company was formed by Dr. Moore, William G. Pearson, Dr. Jesse A. Dodson, pharmacist, Richard B. Fitzgerald, and Dr. James E. Shepard, pharmacist. 1896 The Supreme Court upheld segregation in its “separate but equal” doctrine set forth in the Plessy vs. Ferguson decision in 1896. Warren C. Coleman, opened the Coleman Manufacturing Company, the nation's first African American owned and operated textile factory with support from Durham businessmen Richard Fitzgerald and Washington Duke. The mill only operated a brief period of time under white supervision and was sold at auction in 1904. 1898 North Carolina Mutual and Provident Insurance is established on October 20, 1898, founders included Dr. A. M. Moore, John Merrick, W. G. Pearson, D. T. Watson, Dr. James E. Shepard, Pinkney W. Dawkins, and E. A. Johnson. In 1919 the name of the company was changed to North Carolina Mutual Life Insurance Company. 1899 The Wilmington Race Riot occurred. Charging “Negro Domination,” the Democratic Party overthrew the Populist Party in the white supremacy campaign. Democrats then excluded blacks from the party. 1899-1905 Dr. James E. Shepard was appointed by President Theodore Roosevelt to serve as Deputy Collector of United States Revenue in Raleigh, NC. 1900 Durham’s population, according to the federal census, is 6,679. The population of Durham County is listed at 26, 233. Booker T. Washington founded the National Negro Business League. The “Grandfather Clause” adopted, which denied blacks the right to vote.
62 The Samuel DuBois Cook Center on Social Equity at Duke University 1901 Representative George H. White left Congress. It would be more than twenty years before another black served in the United States House of Representatives. He was first elected from North Carolina in 1896 and was reelected in 1898. Ground broken for Lincoln Hospital. Lincoln Hospital was incorporated and founded by Dr. A. M. Moore, Dr. Stanford L. Warren, John Merrick, and through the generosity of the Duke family (Washington, Benjamin N. and James B.). The first trustees were Dr. Moore, Dr. Warren, Dr. J. A. Dodson, A. A. Armstrong, A. P. Moore, George W. Stephens, J. W. O’Daniels, D. F. Watson, C. C. Spaulding, M. H. Christmas, and Dr. J. E. Shepard. 1907 Mechanics and Farmers Bank established in Durham to provide needed banking services to the black community. It opened in 1908. Directors were Richard B. Fitzgerald, President and Founder, William G. Pearson, James E. Shepard, John Merrick, J. A. Dodson, C. C. Spaulding, W. G. Stephens, Dr. A. M. Moore, and Dr. Stanford L. Warren. Scarborough and Hargett Funeral Home was established on Main Street. John C. Scarborough, Sr., came from Kinston, N. C., with his wife Daisy Hargett to begin what is now a six generation funeral service in the Durham community. February, two men are hanged in Durham, one for murder, the other for rape. These were the only executions in Durham’s early history. Durham’s first black newspaper, Durham Negro Observer, is published. 1908 Drs. S. T. James and James W. Pearson opened Bull City Drug Company, the second drug store in Durham formed by blacks for blacks. 1909 National Association for the Advancement of Colored People is founded. The citywide Civic Association or Civic League is established “for the cultivation of higher ideals of civic life and beauty in Durham.” Its main projects included a cleanup of public buildings, the railroad station, and vacant lots and the founding of clinics for the treatment of infants. National Religious Training School and Chautauqua was chartered and the school opened to its first students on July 10, 1910. Many of the first students went onto supply the many businesses that were established in Hayti and in the Parrish Street business district. B. N. Duke purchased the land for school from the Durham Merchants Association. The school would later be designated the first black state supported liberal arts institution in the world. 1910 Merrick-Moore-Spaulding Real Estate Company is established. Booker T. Washington and his entourage visit Durham in a tour through towns and cities in North Carolina. Nationally, the black press extols Durham as the “Mecca” for blacks, “The Black Wall Street of America,” the “Capital of the Black Business Class,” and the “Magic City.” 1911 Part of Wake County is annexed to Durham County. National Urban League is formed to care for migrants moving from the South in search of jobs, education, and social mobility.
Black Wall Street of the South: From Reconstruction to the Pandemic 63 1912 Dr. W. E. B. Du Bois visits Durham and notes its thriving black middle class. Writing in the World’s Work, he reports 15 grocery stores, 8 barbershops, 7 meat and fish dealers, 2 drugstores, a shoe store, a haberdashery, and an undertaker. 1913 The second black library in North Carolina, the Durham Colored Library is founded by Dr. A. M. Moore in the Baraca, a borrowed room in the White Rock Baptist Church, with 799 books. In 1940, it was renamed the Stanford L. Warren Public Library. 1914 The Durham Textile Mill was organized in 1914, by John Merrick, Dr. A. M. Moore, C. C. Spaulding and managed by C. C. Amey. This institution manufactured socks and was later sold in 1915. World War I begins. 1915 Dr. Booker T. Washington dies. Woolworth building was built on Parrish Street 1916 Durham Colored Library opens for service to the public on August 14th. Mrs. Hattie B. Wooten becomes the first Library Director of the Durham Colored Library. She holds the position until her death in November 1932. 1917 U.S. enters World War I. Daughters of Dorcas Club is formed at the request of Dr. A. M. Moore. 1918 World War I ends. 1919 John Merrick dies on August 6, 1919, at age 60. 1920 The Nineteenth Amendment to the U.S. Constitution is ratified, granting women the right to franchise (vote). The Bankers Fire Insurance Company is the only Stock Fire Insurance Company in the nation. The Board of Directors of North Carolina Mutual hired the Rose and Rose Architectural Firm of Durham to create the design and plans for the building.
64 The Samuel DuBois Cook Center on Social Equity at Duke University 1921 The Mutual Building and Loan Association was organized serving as a Thrift agency that services thousands of homeowners. The Durham Commercial Security Company was organized as an underwriting agency and holder of mortgages and security. The Damp Wash Steam Laundry was organized and provided employment for fifty persons at the time. North Carolina Mutual new headquarters is dedicated and the six story home office building was built at a cost of $250,000 on the site of the first home office on Parrish Street. 1923 The U.S. Department of Labor reports that half a million African Americans migrated out of the South in the preceding year. Dr. A. M. Moore dies on April 29, 1923, at age 59. C. C. Spaulding, Sr., is named president of North Carolina Mutual Life Insurance Company and served until his death in 1952. 1925 The State of North Carolina approved North Carolina College for Negroes as a four year institution, thus becoming the first state supported liberal arts institution for blacks in the nation. Henry M. Michaux, Sr., established the Union Insurance and Realty Co., Inc., which was a real estate and insurance firm. 1926 Louis E. Austin, editor and publisher, founded the Carolina Times with its slogan “The Truth Unbridled,” a black weekly newspaper still in publication today. Southern Fidelity Mutual Insurance Company was organized by William G. Pearson, with support from North Carolina Mutual. The institution sold automobile and health insurance, refinanced mortgages, granted long- term loans, and dealt in stocks and bonds. 1929 Stock market crash begins Great Depression. 1933 Attorney Conrad O. Pearson filed an action on behalf of Thomas R. Hocutt against the University of North Carolina. This case was the forerunner of all civil rights actions brought in the desegregation of state-supported universities throughout the South. 1934 The Service Printing Company was organized to service the expanding needs of black businesses.
Black Wall Street of the South: From Reconstruction to the Pandemic 65 1935 The Durham Committee on Negro Affairs is created to provide a public base for the black community. The founders were C. C. Spaulding, Dr. James E. Shepard, James T. Taylor, William D. Hill, Robert L. McDougald, William J. Kennedy, Jr., Louis E. Austin, and Rencher N. Harris. The National Council of Negro Women was founded and organized on December 5, 1935, in Washington, D.C., by famed educator Dr. Mary McLeod Bethune. The organization consisted of a coalition of 28 black and other minority organizations, working collectively for the advancement of the African American community. The North Carolina State Department of Public Instruction, the University of North Carolina, and Duke University established the Division of Cooperation in Education and Race Relations. 1936 More than 5 ½ million dollars were poured into Durham County by New Deal agencies under the Roosevelt administration. 1938 The Durham Business and Professional Chain is begun as an institution that provides advice to black businesses in Durham. 1939 World War II begins. 1940 A School of Law is established at North Carolina College for Negroes, one of only four historically African American law schools in the United States. 1942 U.S. rations food, fuel oil, and gasoline. 1944 The S. S. John Merrick was launched in Wilmington, North Carolina. 1947 Dr. James E. Shepard, founder and first president of North Carolina College for Negroes, died on October 6, 1947. The physical plant of the newly renamed North Carolina College at Durham was worth $2 million dollars, with state appropriations that year of an additional $2 million dollars. North Carolina Mutual Board of Directors approved the installation of a modern air conditioning system in the building for the first time. 1952 Tuskegee Institute (University) reported for the first time in seventy-one years of recording that there were no lynching's in America. William J. Kennedy, Jr., was elected president of North Carolina Mutual upon the death of C. C. Spaulding, Sr. He served from 1952 to 1958 and authored the company’s history entitled the North Carolina Mutual Story.
66 The Samuel DuBois Cook Center on Social Equity at Duke University 1954 U. S. Supreme Court ruled in the landmark Brown vs. Board of Education of Topeka Kansas that segregated public schools were unconstitutional. North Carolina Mutual had $200,000,000 of insurance in force. 1956 Rencher N. Harris becomes the first black appointee to the Durham City School Board. Members at that time were appointed by the Durham City Council. 1957 Seven blacks are arrested for conducting a peaceful sit-in at the Royal Ice Cream Company in downtown Durham. This was one the first civil rights sit-ins. John S. “Shag” Stewart is elected second black city councilman. He served from 1957 to 1973. The Civil Rights Commission and the Civil Rights Division of the Department of Justice were established. 1959 Research operations begin at Research Triangle Institute. 1960 Greensboro sit-in occurred on February 1, 1960, by four North Carolina Agricultural and Technical State University Students. The movement spread to fifteen southern cities in five states including Durham on February 8, 1960, led by North Carolina College at Durham and Hillside High School students. Rev. Dr. Martin Luther King, Jr., addressed the congregation of the White Rock Baptist Church on February 16, 1960, with his history making “Fill up the jails” civil rights speech, following the famous Durham Woolworth’s lunch counter sit-in on February 8, 1960. Irwin Holmes, Jr., became the first African American student to graduate from North Carolina State University. He was also among the first black athlete's to letter in the Atlantic Coast Conference (tennis). He and three others became the first African American undergraduate students in the fall of 1956. 1961 Duke University board of trustees announces that undergraduate students will be admitted without regard to race. 1963 A peaceful sit-in at the Howard Johnson Restaurant results in the arrest of black demonstrators. President John F. Kennedy is assassinated. Southern Fidelity Mutual Insurance Company merged with the Banker’s Fire and Casualty Insurance Company of Durham. On August 28, 1963, the "March on Washington" is held, with over 250,000 people in attendance at the Lincoln Memorial to push Congress to pass a civil rights bill. 1964 The Civil Rights Act of 1964 prohibits discrimination in public accommodations and in employment.
Black Wall Street of the South: From Reconstruction to the Pandemic 67 1965 The Voting Rights Act is passed by Congress. Mechanics and Farmers Bank purchased the North Carolina Mutual Building. 1966 IBM moves to Research Triangle Park. Attorney Floyd B. McKissick was named National Director of Congress of Racial Equality (C.O.R.E.). North Carolina Mutual moves into its new headquarters on West Chapel Hill Street. The Supreme Court ruled that any poll tax is unconstitutional. 1968 United Durham Inc., is established to create an industrial park for black businesses. Dr. Martin Luther King is assassinated on April 4, 1968. Dr. Reginald A. Hawkins-noted dentist, minister, and activist from Charlotte was a candidate for governor in the North Carolina Democratic primaries and received 20 percent of the vote, and was again a candidate in 1972 when he forced his opponent into a run-off. Henry E. Frye, lawyer, educator, and bank president became the first African American elected to the North Carolina House of Representatives, and was re – elected in 1970 and 1972. He was a member of the board of directors, North Carolina Mutual Life Insurance Company, and an organizer and president of the Greensboro National Bank before serving as a justice on the North Carolina Supreme Court and later the first African American Chief Justice. 1969 Malcolm X Liberation University was founded in Durham and later moved to Greensboro. North Carolina College was given university status by the North Carolina General Assembly and was renamed North Carolina Central University. 1970 Rev. Joy J. Johnson, a native of Laurel Hill, N. C., was elected to the N.C. House of Representatives as only the second African American in the twentieth century so elected. 1971-1972 Ruth B. Jones, of Rocky Mount, N.C., served as the first African American and first woman President of the North Carolina Association of Educators; and organized the Political Action Committee for Education (PACE) and Women's Caucus. 1972 Attorney Floyd B. McKissick founded Soul City, the new township that focused on economic empowerment in Warrenton, North Carolina. 1973 Josephine Dobbs Clement becomes the first black woman to serve on the Durham City Board of Education.
68 The Samuel DuBois Cook Center on Social Equity at Duke University 1975 North Carolina Mutual and Mechanics and Farmers Bank Building are declared a National Historic Landmark by the National Park Service. 1976 The "Wilmington 10" were convicted of firebombing a grocery store in 1971. 1980 Durham College — formerly known as Durham Business College founded in 1947 by Dr. Lucinda Harris— closes; it was one of the earliest black business colleges in the nation. 1981 United States District Judge Franklin T. Dupree, Jr., (Raleigh) signed a consent decree filed by the University of North Carolina and the U. S. Department of Education that resolved an 11-year dispute over the University's compliance with Title Six of the Civil Rights Act. 1983 President Ronald Reagan signed a law that made the third Monday in January the Martin Luther King, Jr., Day a federal holiday after many years of lobbying and protests. 1986 The North Carolina Legislative Black Caucus Foundation, Inc. a 501(c)(3) nonprofit organization was founded in 1986 for the purpose of providing and supporting African American college students through educational programs, scholarships, internships, and for the support of students attending North Carolina HBCU's. 1987 The Charlotte Hawkins Brown State Historic Site opened to the public on the campus of the former Palmer Memorial Institute in Sedalia, N.C. This was the state of North Carolina's only historic site dedicated to an African American and a woman. 1989 Chester Jenkins was elected Durham’s first black mayor. Also, eight of the 13 city council members are black. 1998 Woolworth chain donated the building to the City of Durham. 1999 North Carolina Institute of Minority Economic Development purchased the North Carolina Mutual and Mechanics and Farmers Bank Building from Mechanics and Farmers Bank. North Carolina Central University Chancellor Julius L. Chambers secured $12 million from the State of North Carolina General Assembly to establish the first of two research centers. The Julius L. Chambers Biomedical/ Biotechnology Research Institute (BBRI) was dedicated in his honor in 1999 and as serves as an anchor for research relative to medical conditions associated with African Americans.
Black Wall Street of the South: From Reconstruction to the Pandemic 69 2003 City of Durham voted to raze the Woolworth Building instead of decontaminating the building. 2004 State of North Carolina erected a historic marker titled “Black Wall Street” at the corner of Parrish and Mangum streets. 2006 Durham City Council voted in the affirmative to increase awareness of Parrish Street with new historic displays, heritage tours, and public art. 2008 The housing and financial crisis of 2008 was the largest and most sustained since the Great Depression. The recession began in 2007 and ended in June 2009. 2015 The 150th Anniversary of the 13th Amendment to the Constitution of the United States of America was held on December 6, 2015, at White Rock Baptist Church with United States Appeal Court Justice Judge Allyson K. Duncan as the keynote speaker. 2016 The Indy Week newspaper authored a history of African American owned restaurants and the demise of many in a piece entitled "Blackout-Where Did Durham's African American owned restaurants go?" by columnist Eric Tullis. 2019 The Samuel DuBois Cook Center on Social Equity at Duke University hosted a conference Capital Matters – Race, Gender and Entrepreneurship Conference on October 23 – 25, 2019. 2020 The first confirmed case of Coronavirus is confirmed on January 21 in the United States. President Trump declares a national emergency in March 2020. The Cares Act is signed into law in March as well. May 25, 2020 George Floyd dies in police custody and a video recorded the murder and protests grow nationwide. 2021 The Juneteenth Federal Holiday was signed into law by President Biden on June 17, 2021, at the White House.
70 The Samuel DuBois Cook Center on Social Equity at Duke University Appendices – Data
TABLE A2: Racial Gap for ln(Loan Amounts) - Up to $150,000
(1) (2) (3) (4) (5) (6) (7)
White Owner 0.255** 0.135** 0.124* 0.094 0.110 0.015 -0.001 (0.095) (0.060) (0.058) (0.062) (0.072) (0.048) (0.042)
Black Owner -0.463*** -0.283*** -0.270*** -0.234*** -0.229** -0.310*** -0.278*** (0.063) (0.042) (0.041) (0.038) (0.073) (0.048) (0.048)
Hispanic Owner 0.198 0.107 0.083 0.084 0.169 0.033 0.023 (0.115) (0.158) (0.151) (0.146) (0.126) (0.163) (0.146)
Asian Owner 0.012 -0.187 -0.190 -0.131 0.007 -0.103 -0.103 (0.201) (0.118) (0.106) (0.092) (0.095) (0.075) (0.091)
Native American Owner 1.052** 0.678*** 0.694*** 0.563*** 1.323** 1.219** 1.155** (0.392) (0.166) (0.170) (0.167) (0.443) (0.433) (0.442)
Jobs Reported 0.076*** 0.080*** 0.081*** 0.073*** 0.076*** 0.074*** (0.006) (0.005) (0.006) (0.005) (0.005) (0.005)
Veteran Owner 0.387*** 0.420*** 0.426** 0.304** 0.221 0.228* (0.121) (0.129) (0.152) (0.120) (0.126) (0.121)
Female Owner 0.066 0.058 0.062 0.028 -0.055 -0.062 (0.045) (0.055) (0.049) (0.054) (0.086) (0.076)
Corporation 0.552*** 0.550*** 0.481*** 0.411*** 0.408*** 0.391*** (0.055) (0.051) (0.049) (0.044) (0.046) (0.043)
Median Age (Zip Code) 0.280*** 0.051*** -0.007 -0.021 -0.004 (0.003)
(0.011) (0.013) (0.012) (0.011)
Median Income (Zip Code) -0.000*** -0.000 0.000 0.000** 0.000 (0.000)
Bachelor or Higher % (Zip Code) 0.126*** 0.035*** -0.001 -0.006 0.004 (0.001) (0.005) (0.006) (0.006) (0.005)
Inverse Mills Ratio 0.187** 0.148* (0.072) (0.072)
Zip FE No No Yes Yes Yes Yes Yes
Industry FE No No No Yes Yes Yes Yes
Lender FE No No No No Yes Yes Yes
Month-Year FE No No No No No No Yes
Observations 3885 3885 3859 3804 3804 3482 3482
Adjusted R2 0.008 0.330 0.349 0.369 0.430 0.434 0.447
Black Wall Street of the South: From Reconstruction to the Pandemic 71 TABLE A3: Racial Gap Across Samples for ln(Loan Amounts) – Up to $150,000
vs. All Other vs. Unreported Race vs. Reported White
Black Owner -0.269*** -0.325*** -0.249 (0.057) (0.059) (0.147)
Jobs Reported 0.074*** 0.078*** 0.058*** (0.005) (0.007) (0.011)
Veteran Owner 0.271* 0.188 -0.013 (0.144) (0.150) (0.081)
Female Owner -0.065 -0.077 -0.182 (0.077) (0.115) (0.135)
Corporation 0.390*** 0.382*** 0.320* (0.043) (0.048) (0.164)
Median Age (Zip Code) -0.005 0.050 0.000 (0.010) (0.041) (0.060)
Median Income (Zip Code) 0.000 -0.000 0.000 (0.000) (0.000) (0.000)
Bachelor or Higher % (Zip Code) 0.004 0.027 -0.020 (0.005) (0.017) (0.033)
Inverse Mills Ratio 0.138 0.153** 0.224 (0.085) (0.064) (0.233)
Zip FE Yes Yes Yes
Industry FE Yes Yes Yes
Lender FE Yes Yes Yes
Month-Year FE Yes Yes Yes
Observations 3482 3196 329
Adjusted R2 0.447 0.451 0.468
72 The Samuel DuBois Cook Center on Social Equity at Duke University TABLE A4: Racial and Gender Gap for ln(Loan Amounts) – Up to $150,000
vs. All Other vs. Unreported Race vs. Reported White
Black Owner=1 -0.300** -0.367*** -0.235 (0.115) (0.107) (0.269)
Female Owner=1 -0.079 -0.106 -0.167 (0.098) (0.123) (0.284)
Black Owner=1 # Female Owner=1 0.082 0.116 -0.037 (0.216) (0.187) (0.442)
Jobs Reported 0.074*** 0.078*** 0.057*** (0.005) (0.007) (0.011)
Veteran Owner 0.274* 0.196 -0.017 (0.148) (0.156) (0.102)
Corporation 0.389*** 0.382*** 0.322* (0.043) (0.048) (0.149)
Median Age (Zip Code) -0.006 0.050 -0.001 (0.011) (0.041) (0.070)
Median Income (Zip Code) 0.000 -0.000 0.000 (0.000) (0.000) (0.000)
Bachelor or Higher % (Zip Code) 0.003 0.027 -0.021 (0.005) (0.016) (0.038)
Inverse Mills Ratio 0.141 0.157** 0.227 (0.088) (0.064) (0.214)
Zip FE Yes Yes Yes
Industry FE Yes Yes Yes
Lender FE Yes Yes Yes
Month-Year FE Yes Yes Yes
Observations 3482 3196 329
Adjusted R2 0.447 0.451 0.466
Black Wall Street of the South: From Reconstruction to the Pandemic 73 Appendix
TABLE A: A Selected List of Black-Owned Business in Durham
No. Business Name Zip Code No. Business Name Zip Code
1 A Certified Trucking LLC 27701 29 Braids By Chrissy 27703
2 A'Mare Beauty Spa 27703 30 Brandon Washington 27701
3 A1 Lock & Safe 27705 31 Bright Black Candles 27701
4 Aaku Spa 27713 32 Bull City Butler LLC 27701
5 Abranova Building Company, Inc 27701 33 Bull City Car Wash 27705
6 Accessibull Healthcare 27704 34 Bull City Dental 27701
7 Acrosport Gymnastics 27712 35 Bull City Laughs Tours, LLC 27701
8 Afiya Hijama & Beadworks 27707 36 Bull City Music School 27707
9 African American Dance Ensemble 27701 37 Bull City Street Food 27704
10 Aggrandize Your Life 27703 38 Bull Run Transportation, Inc. 27713
11 Al Strong Music Production 27707 39 BullCity Apparel & Customs 27707
12 Alase Center for Enrichment 27713 40 Burthey Funeral Service 27707
13 All My Children Child Care Center 27707 41 Calculus Commercial 27701
14 Allison Family & Cosmetic Dentistry 27713 42 Candy Carver 27701
15 Amari Tech, Inc. 27704 43 Capital Seafood 27707
16 Amazing Athletes of Durham-Chapel Hill 27707 44 Catalyst Therapeutic Services, PLLC 27707
17 Amber Lynne Beauty N/A 45 CheReversible 27707
18 Amelioron Corporation 27713 46 Chez Moi Bakery, LLC 27707
19 Andrain Horton 27707 47 Chicken Hut 27707
20 Andrea Smith 27707 48 Chisara Ventures INC 27705
21 Angel Beauty Bar 27703 49 Choice Cutts Barber/Styling 27701
22 Angel Smallwood 27701 50 Chonillo Marketing N/A
23 Aplus Test Prep 27707 51 Cleaning Essentials 27715
24 Arnold Todd McClain, DDS, MS, PA 27713 52 Clemons Cosmetic and Family Dentistry 27717
25 Ashlaine Designs, LLC 27713 53 Cloud Ten Photography N/A
26 Ashley Squared Salon 27703 54 Collision Specialists, LLC 27713
27 At Last Hair Salon 27707 55 Community Expert Solutions, LLC 27703
28 B & C Care System 27705 56 Community Health Coalition 27704
74 The Samuel DuBois Cook Center on Social Equity at Duke University No. Business Name Zip Code No. Business Name Zip Code
57 Back to Health Chiropractic Medical Center 27713 88 Conjure Cleaning N/A
58 Backyard BBQ Pit 27713 89 Connoisseur Collective LLC 27705
59 Bailey Service 27703 90 Core Construction Southeast, Inc. 27707
60 Barz, LLC N/A 91 Cotton Professional Center, Inc. 27707
61 Basic 2 Bombshell By Tia 27712 92 Craig Insurance Group Inc 27713
62 Beauty and Beyond Hair Gallery 27705 93 Creative Care Learning Academy 27704
63 Beleza Couture Studio Express 27707 94 Creative Caribbean Catering 27703
64 Bespoke Bakery and Dessert Bar N/A 95 Crissy Shined Nails 27713
65 Beyú Caffè 27701 96 Crystal Griffin 27703
66 Big Baby Apparel, LLC 27713 97 Custom Creations by Murlande N/A
67 Big C Waffles 27713 98 Custom Threadz, LLC 27703
68 Bklyn Bakery, LLC 27713 99 D Squared Visuals N/A
69 Black Moon Art Jewels 27701 100 Dame's Chicken & Waffles 27701
70 Blackspace 27701 101 Desiree T. Palmer, DMD 27704
71 Blend of Soul LLC N/A 102 Details Business Management Solutions 27703
72 Blooming Butterfly Academy 27703 103 Developing Equitable Economic 27701 Partnerships (DEEP), LLC
73 Blush Essentials 27715 104 DeWhit Facility Services, LLC 27707
74 Bobbie James N/A 105 DSTNY Lifestyle, LLC N/A
75 Body Games Center 27705 106 Durham Family Medicine 27704
76 Boricua Soul 27701 107 Durham Vape Lounge 27704
77 Boxed Gift Boutique N/A 108 Early Education Intervention Service 27701
78 BR3 Float & Cryo Studios 27713 109 Ebony Judd 27703
79 Ego Barber Lounge 27705 110 Jackie Moore Salon 27701
80 Elizabeth Ashley & Co 27713 111 Jalen Gaddy 27701
81 Ellis D. Jones & Sons, Inc. 27701 112 Jamaica Jamaica 27713
82 Ellis Herbs 27705 113 Jamice's Caveau De Vanité N/A
83 Eminence Web Designs N/A 114 JC's Kitchen 27701
84 Empower Dance Studio 27701 115 Jeddah's Tea 27701
85 Empowered Minds Academy, Non-Profit 27704 116 Jennifer Scarborough 27703 Corporation
86 Evergreen Lawn Renovations 27713 117 Jessamyn Stanley N/A
87 Every Black N/A 118 Joel N Kalombo 27705
Black Wall Street of the South: From Reconstruction to the Pandemic 75 TABLE A: A Selected List of Black-Owned Business in Durham (Continued)
No. Business Name Zip Code No. Business Name Zip Code
119 EVOKE Studio 27701 150 Jordan Plumbing and Maintenance, LLC 27704
120 Exotique 27701 151 Jordan's Racing Development 27704
121 EZ Rentalz 27703 152 Jumas Food Mart, LLC 27701
122 ezTagile 27709 153 Just the Right Tough Massage & Spa 27705
123 Farrar Family Dentistry 27707 154 Kay Styles 27701
124 FastFrame Durham 27707 155 Kente Lifestyle Apparel N/A
125 Favor Desserts 27713 156 Kidz Kamp Drop-In Care, LLC 27705
126 Fikre Tadesse 27707 157 Kitisha Lawrence 27713
127 Fisher Memorial Funeral Parlor 27707 158 Klip King Lee 27703
128 Food For The Sole Inc 27713 159 Knox St. Studios 27705
129 Food That Fits You 27704 160 Kompleks Creative 27701
130 For Alma Home 27705 161 Kreative Kidz NC 27703
131 Franmoné Fragrances N/A 162 La Wynn Pa 27713
132 Frasier & Griffin, PLLC 27701 163 Lajune Frazier 27704
133 Fred Quality Cuts 27713 164 Lakefront Retreat Near RDU Airport 27713
134 Frederica King 27703 165 Laphe's Hair Loss Clinic 27705
135 Gavin Christianson Bridal 27701 166 Latoya Bynum 27713
136 Geek Chic Fashion 27701 167 Lawrence Powell 27713
137 Gentleman Status Bowties 27705 168 Let's Eat Soul Food (Let's Eat HomeStyle) 27713
138 Geoffrey Bell 27712 169 Liberation Station Bookstore N/A
139 George Stevens Insurance Agency, Inc. 27707 170 Lionel M. Nelson Dmd P.A. 27707
140 GMMC Digital 27701 171 Lionel Nelson Family & Cosmetic Den- 27707 tistry
141 Golden Krust Caribbean Restaurant 27703 172 Little Engine Academy 27704
142 Goorsha 27701 173 Logicnet Solutions, Inc. 27707
143 Gracie Rogers 27713 174 Loutricia Black 27701
144 Graham Solutions, LLC 27713 175 Lula and Sadie's 27701
145 H. Eugene Tatum III, Attorney 27701 176 M'zuri Lavish Collection N/A
146 Hairzon 27705 177 M&M Tutoring Service 27707
147 Hanes Funeral Home 27703 178 Marquee Burton 27704
148 Harlem Beer Distributing 27703 179 Maya Chapman 27704
149 Harper's Parlour 27701 180 Meat and Graze 27709
76 The Samuel DuBois Cook Center on Social Equity at Duke University No. Business Name Zip Code No. Business Name Zip Code
181 Hayti Heritage Center 27701 212 Mechanics and Farmers Bank 27707
182 Head Mechanics Barbershop 27705 213 Melanie'S Styles 27704
183 Headen Photography N/A 214 Melody Crumble 27713
184 Hersey Pharmacy 27707 215 Messick-Health Management & Associat- 27707 ed, LLC
185 Hopkins Child Care Academy 27713 216 Mi Neighborhood Playhouse Too 27713
186 Hylton-Daniel Design 27701 217 Michelle Jackson 27704
187 iAmMe Girls, Non-Profit Corporation 27701 218 Mike D's BBQ 27703
188 Indulge Catering, LLC 27713 219 Mindful Bodies 27705
189 Inner City Youth & Boxing Center, 27701 220 More Than Therapy 27701 Non-Profit Corporation
190 J&j Chicken and Fish 27703 221 Morehead Manor Bed and Breakfast 27701
191 Mufutau Adeyanju Elemikan 27703 222 Saltbox Seafood Joint 27701
192 Nailz + Beauty 27705 223 Saunte Furnace 27707
193 Nakeya Batts 27703 224 Scarborough & Hargett Celebration of 27701 Life Center, Inc
194 Natty Neckware 27712 225 Scented Endearments LLC 27704
195 New School Investment 27703 226 Senior Health Services 27713
196 Ngozi Design 27701 227 Serenity Travel Experts 27703
197 Nicole Sainworla 27701 228 Shakia Fletcher 27701
198 Noila Family + Coffee 27701 229 Shaw's School of Karate 27705
199 Nora's African Groceries 27713 230 Shear Luxury Salon 27705
200 North Carolina Central University Founda- 27707 231 Sheri Smallwood 27703 tion, Inc.
201 North Carolina Mutual Insurance Company 27701 232 Sho Nuff Seafood 27701
202 North Durham Citgo Gas Station 27704 233 Shot by 50mm Studios, LLC 27713
203 NorthStar Church of the Arts 27701 234 Sincerely Yours Salon 27705
204 Nothing Less Than Neet, LLC 27705 235 Skewers Bar & Grill 27701
205 Nuthin But Geez 27707 236 Skin Wellness Dermatology Associates 27713
206 Nzinga's Café & Restaurant 27701 237 SkyeLightLiving 27703
207 Open Wide Family Dentistry 27703 238 Soar Aerial Dance 27701
208 Palm Treez Smoothies 27704 239 Solay Counseling and Research Center, 27713 P.C.
209 Pattie G. Brown Enterprises 27707 240 Sophisticated Catering & Event Planning 27705
210 Peressi Hemp 27705 241 Soul Fresh Spring Rolls 27704
211 Perkins Orchard 27713 242 Soul Good Vegan Food 27707
Black Wall Street of the South: From Reconstruction to the Pandemic 77 TABLE A: A Selected List of Black-Owned Business in Durham (Continued)
No. Business Name Zip Code No. Business Name Zip Code
243 Perspective Context, LLC 27704 272 Soundrah Exum 27713
244 PickleBack 27701 273 Southern Bella’s LLC 27704
245 Pierce McCoy's Shoe Shine 27701 274 Southern Lady Sweets 27704
246 Piri 27703 275 Spectacular Magazine 27707
247 Polar Panda's Snoballs 27703 276 Speights Auto Services 27713
248 Pore People N/A 277 Spring Metro Grooming Spa & Lounge 27704
249 Pork In The Road N/A 278 Studio Motif 27705
250 Portfolio Group, LLC 27703 279 Styled By Vondranique 27707
251 Power of Massage 27705 280 Sweet's Smoothies 27707
252 Power Of Massage 27705 281 Sweets By Alexandria 27713
253 Prime Athletic Training and Fitness 27707 282 Tantania Harding 27703
254 Profound Elegance Romance Concierge 27713 283 Tara Mccoy 27703 Service
255 Protouch Drywall & Paint 27703 284 Tarheel Consulting Group N/A
256 Providence Smiles 27703 285 Taryn Worley 27703
257 Provident 1898 27701 286 Tater Bread 27701
258 Psychological Assessment, Consultation & 27705 287 The 360 Approach 27701 Therapy Center
259 Radiance Physical Therapy 27713 288 The Armstrong Center for Hope 27707
260 Rayquawn Wood 27707 289 The Aura Galleria (Aura Salon and Bou- 27707 tique)
261 RHODA Generation 27707 290 The Bar 27701
262 Richardson Law Firm, PLLC 27703 291 The Barbee Shop 27704
263 Right Time Realty 27713 292 The C.N.O.T.E. Foundation 27701
264 Ronald's Unisex Barbershop 27713 293 The Choice Performance Center 27713
265 Ronzella Croskey 27713 294 The Comedy Lounge 27703
266 Roobi Rentals & Balloons 27703 295 The Dankery 27701
267 Rooter-Rooter USA (Jordan Plumbing and 27704 296 The Durham Business & Professional 27701 Maintenance, LLC) Chain
268 Roy's Kountry Kitchen 27707 297 The Gallus Event 27701
269 Rumors 27707 298 The Heir Salon 27703
270 Russell's Pharmacy and Shoppe 27703 299 The Helius Foundation 27707
271 Sabrina Seymore Events (SSE) 27709 300 The Hemptender 27713
78 The Samuel DuBois Cook Center on Social Equity at Duke University No. Business Name Zip Code No. Business Name Zip Code
301 The Lather Lounge 27705 331 Valerie Parker 27705
302 The Law Office of Julian M. Hall 27703 332 Vanity's Gift Gallery Boutique 27701
303 The Law Office of Peace & Squires, PLLC 27713 333 Victorious Praise Fellowship Church, Inc. 27703
304 The Living Room 27701 334 Virginia & Co N/A
305 The North Carolina Center for Dermatology 27713 335 Virtue Events 27707
306 The Palace International 27705 336 Visionary Consulting Pros, LLC 27713
307 The Pampered Woman 27705 337 Walltown Children's Theatre 27705
308 The Renaissance Barbershop 27713 338 Wil's Social Bistro & Lounge 27703
309 The Triangle Tribune 27713 339 Wonderpuff 27701
310 The Zen Succulent 27701 340 WythaBalance Yoga 27713
311 Tierra Brodie 27704 341 Y & G Contractors 27713
312 Tiffany Smith 27707 342 Zweli's Kitchen & Catering 27707
313 Tims Smokin Bbq 27713
314 Tips & Needles, LLC 27701
315 TNP Fit 27703
316 TNT Fish and CHicken 27701
317 Tootie's Mobile Kitchen 27703
318 Top Notch Performance, LLC 27703
319 Total You Fitness & Nutrition 27701
320 Toyin Babarinlo 27705
321 Travoskia Cooke 27703
322 Triangle Performance Ensemble 27707
323 Tropical Delight, LLC 27707
324 True Flavors Diner 27713
325 U Dirty Dog Selfwash Spa 27713
326 UDI Community Development Corporation 27713
327 United Paint & Body Shop and Auto Sales 27704
328 United Thai Boxing & MMA 27713
329 Unity and Respect Barber Styling and 27713 Natural Hair Salon
330 Uprise Financial Solutions 27703
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82 The Samuel DuBois Cook Center on Social Equity at Duke University https://socialequity.duke.edu/
Black Wall Street of the South: From Reconstruction to the Pandemic 83 https://socialequity.duke.edu/
84 The Samuel DuBois Cook Center on Social Equity at Duke University
