African American Entrepreneurship: The View from the 1910 Census

By Norm Bond, www.BlackEconomicDevelopment.com

The 1910 Census was the first to include a question on employment status (employer, own account, or employee) and is thus the first nationwide survey to include information about both business ownership and race. Researcher Margaret Levenstein documents these findings in her study “African American Entrepreneurship: The View from the 1910 Census“. Adding this historical perspective may shed additional light on today’s lack of African-American entrepreneurship and suggest the kinds of networks and institutions which would be necessary to foster success.

(pictured: Madam CJ Walker, born on December 23, 1867, became the first woman  millionaire and a pioneer of the modern hair care industry by the time she died in 1919)

Entrepreneurship is defined here simply as working in one’s own business, with employees or not, and the research conducted here shows that the overall rates between whites and African-Americans were roughly equal in 1910. In addition, one of the most striking findings in the study is that in 1910 African-Americans were more likely than white Americans to be employers, and almost as likely as whites to be self-employed. This is in contrast to today, when African-Americans are only a third as likely as whites to work in their own businesses.

With current African-American unemployment at Great Depression levels, there is a dire need for the community to empower itself by creating its own jobs, starting businesses, and growing them to scale. In a capitalist market economy, firms initiate and coordinate a wide range of ongoing economic activity, and have increasingly been the site of innovation. The formation and nurturing of firms, and of organizations which can create and sustain economic activity, is the most basic of entrepreneurial activities.

(pictured: William Madison McDonald, better known as “Gooseneck Bill” was born a slave June 22, 1862 at Terrell, Texas. He overcame adversity to become a scholar, journalist, entrepreneur and politician.)

As increased attention is focused on entrepreneurship, “Buy Black” efforts, and growing existing businesses to scale there needs to be a review of the historical data. The research presented here suggests two important findings. First, most African-American employers were truly entrepreneurs in the sense of “opting” rather than “falling” into entrepreneurship in 1910. The African-American “self-employed” included a small, but significantly greater proportion of the “previously unemployed” than did the white. Second, African- American entrepreneurs were more likely to be located in counties with a higher percentage African-American population.

(pictured: Booker T. Washington, advocated “Get a home of your own. Get some property….get some of the substance for yourself.” )

These facts would seem to give pause to those who believe that the African American culture is unsupportive of entrepreneurial activity or that “cultural differences may explain black white differentials in self employment.” This also suggests that before the development of large urban ‘hoods, ghettos, integration and gentrification, African Americans in urban communities utilized their proximity to each other to increase entrepreneurship. 

If these findings can be updated and made relevant in 2012, they may help the African-American community reduce unemployment, create jobs, and improve our communities.