Small Businesses Contribute to our Communities
Small businesses provide employment opportunities to local residents, growth in the local economy, and add to the improvement of our neighborhood. Unfortunately, the coronavirus pandemic has forced at least 15,000 small businesses in LA to close. At least half have closed permanently.
To protect the local economies of our neighborhoods, the city of Los Angeles has a responsibility to keep small businesses afloat throughout the duration of this crisis.
The Consequences of Institutionalized Racism
However, we cannot go back to “business as usual” once the pandemic is under control, because the playing field for entrepreneurship disproportionately leaves out entrepreneurs of color.
Owning a small business is one of the major ways communities of color can build wealth for their family and generations to come.
The racial wealth gap between communities of color and white households is large and growing. However, it is the result of historical institutionalized racism.
18th - 19th Century
Communities of color have been trying to build generational wealth for decades, but those efforts have constantly been interfered with largely by the government. More than two centuries of chattel slavery set Black people behind by the end of the 19th century. Black codes and Jim Crow laws that followed restricted the economic, political, and social rights of the Black community.
During the Great Depression, President Hoover’s Mexican “Repatriation” Act of the 1930s used people of Mexican descent as a scapegoat for the loss of jobs in communities throughout America. Millions of Mexicans and Mexican-Americans were deported to Mexico resulting in the devastation of local communities, loss of Mexican-owned small businesses, and a decrease in the local economies of neighborhoods.
President Roosevelt used the tools of the federal government to further institutionalize racial discrimination. Under his administration, the Federal Housing Authority (FHA) chose not to guarantee mortgages for African Americans who tried to buy homes in majority-white neighborhoods. As a result, Black and other communities of color did not get to participate in the economic growth that came after the Great Depression.
Furthermore, in any neighborhood or metropolitan area where Black folks lived or lived nearby, the region was colored red (also known as redlining) to indicate that these neighborhoods were too risky for home buyers and investors. The FHA used a baseless claim that Black folks lowered property values. In reality, Black homebuyers increased property values in majority-white neighborhoods because they were willing to pay more due to the lack of access to low-interest home loans.
Nevertheless, the restriction of housing and economic opportunities has resulted in generational disadvantage, regional segregation, and economic inequality we can see today on racial lines.
Today, the income of Black households is about 60% of the average white household. However, the mean and median wealth of Black households is less than 15% of white ones. The wealth of Latino households is less than 20% of white households.
The lack of wealth and capital means that it's much harder for communities of color to get the assets they need to start a business. In order to build back our communities, which historically have been neglected, we need to invest in our neighborhoods and that includes local small business owners and aspiring entrepreneurs of color.
All businesses must provide a living wage and respect a worker's right to organize and join a union
While small businesses contribute to our local economy by hiring local residents, without workers, there is no economy to grow. Workers produce the goods and services that benefit the public. However, the increasing cost of living from rent to food have exceeded the minimum wage. Workers are being forced to work more than one job just to get by. I believe that one job should be enough to support yourself and live a dignified life.
Therefore, small businesses must provide a living wage so that workers can afford to stay and live in their communities. Small businesses must also respect a worker's right to organize and join a union. Labor unions provide workers a plethora of benefits such as the power to collective bargain and negotiate better pay, working conditions, and more.
We need to create an economy that is equitable and just for all residents. That means we must invest in creating new institutions that serve the interests of people, not the greediness of private actors.
Public Bank Los Angeles
A public bank is a government owned institution that provides lending and depository services. Unlike private banks which answer to their private shareholders, the purpose of a public bank is to serve the interests of the public.
Similarly to LADWP (Los Angeles Department of Water and Power), a public bank would be a public utility. Therefore, it must use its resources and services to help residents. This would include financing projects to create and restore our parks, services and permanent housing for unhoused residents, farmer's markets, and more. For local small businesses this could include low-cost lending to purchase and provide fresh, high-quality produce, recovery loans, worker's relief, and establishing cooperative ownership structures.
According to Public Bank Los Angeles, "the City of Los Angeles paid $170 million in banking fees and $1.1 billion in interest to big banks and investors. Banks have leveraged our tax dollars to finance harmful industries including private prisons, fossil fuel extraction, and weapons manufacturing. In 2017, the City of Los Angeles divested its funds from Wells Fargo, which was fined billions of dollars for creating illegal customer accounts, has a history of discriminating against Latino and African-American home buyers, and finances industries harmful to Angelenos."
A public bank, run by an independent board of community residents, would help safeguard Los Angeles resources from the greediness of private banking and investment institutions. It will ensure that all residents, regardless of background are treated fairly.
Supporting Small Businesses
READ TIME OVERVIEW: 1 MIN | FULL: 4 MINS
As your Council Member I will:
Support a Public Bank
Redistribute wealth towards low-income and disadvantaged communities
Provide affordable loans and increase credit to small, local businesses
Provide support and assistance in establishing cooperative business ownerships, cooperative housing arrangements, and community land trusts
Support street vendors
Provide support and assistance in applying for a permit
Protect venders right to vend on the streets and sidewalks of LA
Support a rent and eviction moratorium for small businesses for the duration of the pandemic