Black employers are reaching new heights

In 2023, the number of Black-owned employer businesses (those with at least one employee) operating in the United States surpassed 200,000 for the first time—marking at least six years of consecutive growth based on the latest available data from the Census Bureau. Between 2017 and 2023, the number of Black-owned employer businesses grew by 62%, or nearly 77,000 firms. This growth was larger than U.S. employer businesses overall, which increased by 3.3% over the same period.

Even so, the overall share of Black-owned employer businesses remained disproportionately low relative to Black people’s share of the U.S. population. In 2023, Black Americans represented 3.4% of employer business owners, yet made up 14.4% of the population.

This report is the latest in a series that began in 2020 examining the growth of Black-owned employer businesses. Using data from the Census Bureau’s Annual Business Survey, this report highlights Black-owned employer business growth across sex, cities, and industries, as well as overall trends in employer business ownership by race and ethnicity. 

Black-owned businesses facilitate wealth-building for their owners and their communities. Brookings’ research on racial wealth disparities shows that business equity was the second-largest contributor to Black wealth increases from 1989 to 2022. In 2023, the more than 200,000 employer businesses owned by Black entrepreneurs generated a cumulative $249 billion in revenue, supplied over 1.8 million jobs, and paid out $69.8 billion in salaries.

From 2017 to 2023, 116 metro areas saw increases in the number of Black-owned employer businesses; 72 metro areas saw increases from 2022 to 2023. These businesses not only build wealth for Black families, but are also community anchors and service providers that invest in the people and places around them. In fact, higher rates of Black business ownership in a metro area or county correlate with longer life expectancies for Black residents overall, and metro areas with more equitable representation of Black-owned employer businesses show higher rates of Black well-being.

Employer business ownership increased for all major racial groups in the United States from 2017 to 2023, along with their revenue, payroll, and number of employees. The growing share of business ownership by Black entrepreneurs and other minority groups continues to highlight how a more equitable economy means more job opportunities, revenue, and income streams for more people.

Black-owned businesses continued to grow the US economy

Between 2022 and 2023, the number of Black-owned employer businesses increased by an estimated 6,300 firms. That year, Black employer firms created roughly 238,000 new jobs while generating $37 billion more in revenue and paying $8.6 billion more in wages to their employees than in the year prior.

This annual growth, although positive, came at a slower rate than years prior. From 2017 to 2022, the number of Black-owned employer businesses grew, and between 2020 and 2022, the rate of growth increased annually. From 2021 to 2022, the number of Black-owned employer businesses grew by almost 21%. Over the subsequent and most recent year of data (2022 to 2023), the number of Black-owned employer businesses still grew, but the rate of that growth declined sharply, increasing by only 3.2%—a lower growth rate than in 2020.  

Although this report does not analyze the cause of these trends, looking at the policy and social context of 2023 sheds some light on possible deterrents to Black-owned employer business expansion. On one hand, government agencies continued to increase intentional funding for Black business owners; for example, the share and number of federal contracts to Black business owners increased, and Black entrepreneurs received 14% of the $750 million in state small business credit programs. Yet as Americans moved further away from the racial justice uprisings of summer 2020, venture capital investments in Black entrepreneurs dropped 71%, meaning less than 1% of those dollars went to Black startups.

The cost of doing business also ballooned as the COVID-19 pandemic eased. In 2023, prices inflated by 4.1%, compounding on the historic 8% inflation of the year prior, exacerbating high business costs. Additionally, the unemployment rate for Black Americans spiked to 16.9% in 2020, which necessitated business creation for many of those out of work. But by 2023, the Black unemployment rate had leveled out or even dipped below pre-pandemic levels to around 5% to 6%, likely reducing the number of new businesses created as a replacement for employment.

Black female-identifying employers surged, yet remained a small share overall

In 2017, there were fewer than 45,000 Black female-owned employer businesses across the entire country. In 2023, the number was up to 79,000, bringing their share of all employer businesses from 0.8% to 1.3%.

Across that period, the number of Black female-identifying employers grew compared to Black employers overall and female-identifying employers overall.¹ From 2017 to 2023, the number of Black female-identifying employers grew by 78%, while the number of Black employers overall grew by 62% and the number of Black male-identifying employers grew by 60%.

Regardless of race, during this period, the number of female-identifying employers grew by 20%, and the number of male-identifying employer businesses grew by 6%. This relatively large proportional difference is significant but not unsurprising, as Black women start businesses at relatively high rates, in part due to racism and sexism in the workplace. However, racism and sexism are still barriers for Black female entrepreneurs, who contend with a business loan rejection rate triple that of white business owners, leading 61% of Black women business owners to self-fund their businesses.

Black employers are concentrated in a small set of industries

Half of all Black-owned employer businesses are concentrated in five industries: 1) health care and social assistance; 2) professional, scientific, and technical services; 3) social assistance; 4) administrative and support services; and 5) waste management and remediation services.

Black workers, especially Black women, are overrepresented in health care and social assistance jobs: One in five Black women workers is employed in a health care job. However, Black people are still underrepresented in the ownership of these businesses, representing 7.7% of industry employers while making up 14.4% of the population. Even within the industry, there are major gaps in representation, especially for higher-earning and leadership roles. For example, only 2% of psychiatrists, 3.8% of dentists, and 6% of physicians are Black. Therefore, although this industry employs a large share of Black workers, Black people do not equitably hold ownership of these businesses.

Looking beyond absolute numbers, the highest shares of Black business ownership are in transit and ground passenger transportation, health services, and the performing arts. Relative to health care and social assistance, transportation is a smaller industry, meaning it holds a lower number of Black employer businesses overall but is composed of a relatively high and nearly equitable share of Black employers, at 13.7%.

Nearly 10% of employer businesses without an industry classification are Black-owned. Although this lack of classification limits the ability to analyze these businesses, most businesses without an industry classification are relatively new, which isn’t surprising, as 10.8% of all new employer businesses from 2022 to 2023 were Black-owned.

Industries with the lowest share of Black employers are machinery manufacturing (0.3%), mining support (0.4%), fabricated metal manufacturing (0.4%), textile products (0.5%), and textile mills (0.6%).

Despite large gains from 2017 to 2023, the growth of Black-owned employer firms varied by metro area

From 2017 to 2023, 116 metro areas saw an increase in their overall number of Black-owned employer businesses. The largest numbers of Black-owned employer business were in large, majority-minority cities. For example, Atlanta gained 6,000 Black-owned employer businesses during this period—more than any other metro area. In the same period, Miami gained roughly 4,700 Black-owned employer businesses, New York gained around 3,800, Washington, D.C. gained about 3,600, and Los Angeles gained over 3,500. The table below shows the 15 metro areas that led the nation in Black-owned employer business creation from 2017 to 2023.

However, of the 116 metro areas that saw overall growth in Black-owned employer businesses from 2017 to 2023, only 72 saw growth in the most recent year of data. For example, although Atlanta saw the greatest increase in the number of Black-owned employer businesses over the six-year period, it lost over 600 of these firms from 2022 to 2023. In addition to Atlanta, metro areas with the largest losses in Black-owned employer businesses were San Francisco; Raleigh, N.C.; Charlotte, N.C.; and Virginia Beach, Va.

With such recent losses in these metro areas, their communities may not experience the benefits that the long-term growth rate would suggest. For example, from 2022 to 2023, Salt Lake City lost 108 Black-owned employer businesses, meaning that since 2017, the metro area only had a net gain of 18 of these firms.

Still, many metro areas continued their growth trajectories in the number of Black-owned employer businesses despite the national slowdown. From 2022 to 2023, Houston saw the largest increase in Black-owned employer businesses, gaining 902 firms—a 14.6% increase. In the same period, New York gained 843 firms; Miami gained 736; and both Minneapolis and Indianapolis gained nearly 500.

Some smaller metro areas gained lower numbers of Black-owned employer businesses, yet this was large growth relative to their size. For example, Flint, Mich., gained 205 Black-owned employer firms from 2017 to 2023 (170 of which were from 2022 to 2023 alone), marking a 159% overall increase. The maps below show changes in the number of Black-owned employer businesses for 266 metro areas across the country in both the six-year period from 2017 to 2023 and the final year of change from 2022 to 2023.

Employer business ownership increased across race and ethnicity, but minorities are still underrepresented

When looking across race and ethnic groups, Latino or Hispanic business owners saw the largest percentage increase in the number of businesses and employees. From 2017 to 2023, the number of Latino or Hispanic-owned employer businesses increased by 125%, and the number of their employees increased by 64%.

Black employers saw the second-largest proportional increase, raising their number of businesses by 62%; this was followed by Native American employers at 54%, white employers at 38%, Native Hawaiian and Pacific Islander employers at 23%, and Asian American employers at 0.3%.

In 2023, white employers continued to own the largest number of businesses (4.8 million), followed by Asian American employers, at nearly 685,000. Latino or Hispanic employers owned about 496,000 business; Black employers owned 201,000; Native American employers owned 55,000; and Native Hawaiian and Pacific Islander employers owned 9,400.

Growth for all minority groups creates a more representative business landscape. As underrepresented race and ethnic groups own more employer businesses, their share of ownership moves closer to their share of the population. This growth is a tool to combat centuries of racial disparities in ownership and wealth.

In particular, Black and Latino or Hispanic Americans both own smaller shares of employer businesses than their share of the overall population would suggest. Black Americans made up 14.4% of the United States’ population in 2023 but owned just 3.4% of employer businesses. Latino or Hispanic Americans made up 19% of the population but owned only 8.4% of employer businesses. (Prior Brookings research dives deeper into the growth of Latino or Hispanic-owned employer businesses, which made up 7.9% of employer businesses in 2022.)

Similarly, Native Americans represented over 2% of the population but less than 1% of employer business owners. In contrast, white and Asian Americans, who represent 63.4% and 7.2% of the population, respectively, are overrepresented in employer business ownership, at 80.6% and 11.5%, respectively.

Supporting Black business owners supports the entire economy

The growth in Black Americans’ business ownership is a testament to the advancement of racial justice in our country. In 1867, there were roughly 4,000 Black-owned businesses in total; by 1930, that number had grown to 70,000.² Yet most of these businesses were owned and operated by one person or family, and would often die out with those owners. Today, Black-owned employer businesses are building wealth and a legacy for both their owners and communities.

Yet despite historic gains, recent attacks on government programs that center on diversity, equity, and inclusion threaten continuing progress. The Trump administration has dismantled the Minority Business Development Agency, the only federal agency devoted exclusively to minority-owned businesses—terminating its staff and canceling its grant programs. It revoked Executive Order 11246, eliminating the long-standing requirement that federal contractors implement affirmative action programs. And it has dramatically curtailed the Small Business Administration’s 8(a) program, which channels federal contracts to socially and economically disadvantaged small businesses; new admissions to the program fell from over 2,100 firms annually under the Biden administration to just 65 in 2025. Additionally, the Small Business Administration’s recently implemented policy to deny loans to green card holders cuts off funding to immigrant entrepreneurs of all races, taking jobs and opportunities away from all Americans.

Building an American economy for all means supporting the growth of Black-owned businesses for years to come. With numerous structural barriers to growth—such as credit access, intergenerational wealth gaps, and outsized levels of debt—Black-owned businesses will not magically grow without inclusive and intentional policy and investments. This work includes bolstering local and state government investments (especially in majority-Black places), utilizing special purpose credit programs, strengthening community development financial institutions, and investing in community ownership models that differ from traditional business models. Policies such as these and others can help ensure that our economy reflects the diversity of our communities.