Hope for US economy: Young black men as entrepreneurs

Lawrence Carpenter knew he always had an entrepreneurial spirit, but he was in the wrong business – the business of selling drugs.

After his second stint in prison, it became clear to him: “I made mistakes in my life, and I didn’t want to spend the rest of my life in poverty because of those mistakes. I also knew that I had a criminal record, and looking at things realistically, it was going to be pretty difficult finding a job anywhere. I didn’t want to use that as an excuse. I knew that in order for me to realize the goals I had financially, my only option was to start my own business and create my own market.”

The Durham, N.C. native set about the task of starting Super Clean Professional Janitorial Services, a commercial cleaning service. “I wanted something that would get me as far away from the streets as possible, but where there wouldn’t be a limit or a cap on how much money I could make.” Now the sky seems to be the limit for Mr. Carpenter, as Super Clean is generating more than $2.5 million in sales per year and employs more than 70 full and part-time employees.

It’s the Lawrence Carpenters that organizations like ours – City Startup Labs – want to motivate, train, and deploy in inner cities around the country. This new non-profit was created to take at-risk young African American men, including ex-offenders, and teach them entrepreneurship, while creating a new set of role models and small business ambassadors along the way. City Startup Labs contends that an alternative education that prepares these young men to launch their own businesses can have far more impact with this population than other traditional forms of job readiness or workforce training.

Today’s economic climate allows employers their pick of candidates, leaving few options for anyone with a record. Young black men, who’ve had no brushes with the law, still routinely face real barriers in getting on a job ladder’s lowest rung.

According to a 2005 Princeton study, “Discrimination in Low Wage Labor Markets,” young white high school graduates were nearly twice as likely to receive positive responses from employers as equally qualified black job seekers. Even without criminal records, black applicants had low rates of positive responses – about the same as the response rate for white applicants with criminal records.

This is where entrepreneurship comes in. For example, a report done by the Justice Policy Institute states that, “…recidivism is higher for those persons who are unable to obtain employment after leaving prison and imposes a high cost on society; and yet employment opportunities are especially limited for ex-convicts. Thus self-employment would be a viable alternative for ex-offenders, at least for those with above average entrepreneurial aptitude…” Someone like a Lawrence Carpenter.

The City Startup Labs approach is to conduct an Entrepreneur’s Academy, offering accelerated instruction to inner-city young men (usually 18 to 24 years old) who aspire to start and operate their own businesses. Students progress through a set of modules, including a core curriculum provided by the Kauffman Foundation. Among other things, this curriculum builds a working knowledge of the fundamentals of planning and managing a business.

Once students have prepared and pitched their business ideas, this program gives them a platform to incubate their ventures. Students are supported throughout the process with coaches, tutors, mentors, and sponsors. A pilot Entrepreneur’s Academy program is launching this May in Charlotte, N.C., in collaboration with the local Urban League.

The high-tech, high-growth model of Silicon Valley and Alley has so engrained the popular notion of what it means to be an entrepreneur, that it’s hard to imagine young, inner-city, black men playing a vital role in America’s entrepreneurial activity and innovation.

Despite this entrepreneurial divide, black business development has quite a compelling story. According to the Census Bureau, during the period from 2002 to 2007 and before the Great Recession struck, the growth rate of black-owned companies was more than triple the national rate of 18 percent. Revenue generated by black-owned companies increased more than 55 percent to $137.5 billion. Many of those were businesses like Carpenter’s Super Clean Professional Janitorial Services.

“Black-owned businesses continued to be one of the fastest-growing segments of our economy, showing rapid growth in both the number of businesses and total sales during the time period,” said Thomas Mesenbourg, then-deputy director of the Census Bureau. Not surprisingly, the nation’s largest cities were homes to the bulk of these black-owned companies.

However, these same cities face a parallel conundrum of what to do with their population of young men of color. In one particular attempt to address this, New York’s Mayor Michael Bloomberg announced in August 2011 the Young Men’s Initiative. It zeroes in on the issues of education, criminal justice, and employment among young African American and Latino males. Yet as significant as this initiative is, it omits entrepreneurial education as a critical path to self-employment and job creation.

Tackling the country’s current unemployment woes requires all hands on deck. According to the Association for Enterprise Opportunity, if just 1 in 3 Main Street businesses like Carpenter’s hired a single employee, the US would be at full employment. Young, inner-city men can be crucial to this process. They must be included in a solution or we miss a real opportunity by ignoring the role they could play in enterprise development. Just think of all of the people touched by Lawrence Carpenter.

The scene is set: a terrible job market and high unemployment for young men of color, an increasing number of ex-offenders reentering their communities, the high cost of corrections and recidivism. At the same time, local and national groups are striving to enlarge the ranks of small businesses and boost entrepreneurship. The concept behind City Startup Labs is clearly one whose time has come.

Henry Rock is executive director of City Startup Labs.