Bloggers
"Black business ownership jumped 400% in one year."

Bloggers on Monday, August 20th, 2018 in

False

Black business ownership didn’t increase 400 percent this year

Conservative bloggers are championing a survey that they say indicates a 400 percent jump in the number of black-owned businesses in the United States in the past year — and they’re attributing that supposed increase to President Donald Trump.

Trump has pointed to low African-American unemployment rates throughout his presidency, calling them "the lowest ever recorded in our country." While that’s true, we found African-American unemployment has been decreasing gradually since it peaked at 16.6 percent in 2010.

This new claim of a skyrocketing number of black business owners originates from a 2017 client email survey conducted by two private companies and focused on small businesses. The aggregated findings, posted on the companies’ websites in January, do not reference Trump.

However, bloggers then took the survey and linked the results to Trump.

For example, the conservative website Think Americana published an article titled, "MAGA: Black business ownership jumps 400% in one year under Trump."

"On Monday President Trump’s approval rating with African Americans hit 31%," the article said. "That’s not all. Black business ownership jumped 400% in one year."

This story was flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Facebook.)

The 31 percent approval rating comes from a recent Rasmussen Reports poll, which was updated a few days later as 36 percent. Rasmussen Reports consistently cites higher approval ratings for Trump than most pollsters. Gallup’s numbers hover in the 10 to 15 percent approval range for African-Americans, and Reuters monthly polling for July had black approval at 12.8 percent.

In November 2017, small business financing company Guidant Financial and online credit marketplace LendingClub Corporation sent out an email survey to their clientele nationwide; they received responses from about 2,600 "current and aspiring entrepreneurs." The companies both posted general articles about the results of that survey on their websites in January without making any distinctions about race or ethnicity except that 47 percent of "aspiring entrepreneurs" surveyed were minorities.

The 400 percent increase in black-owned businesses claim, however, was not made until a subsequent graphic was published on Guidant’s website on Aug. 8.

It was not clear from the released results how the companies came up with the 400 percent jump. The percentage of African-American respondents who owned businesses was not published, nor was that figure from last year.

The survey sample was not random, the response was voluntary, and the margin of error was not made public.

This graphic said it relied on the same survey data, and it highlighted the African-American business owners in the pool. The methodology the companies provided did not break down respondents by race, only saying that minorities accounted for 47 percent of aspiring entrepreneurs who responded.

PolitiFact contacted Guidant about the claim in the graphic on Aug. 21. Two days later, a new version of the graphic was posted, this time without any mention of a 400 percent increase.

"We have found that the 400% statistic is being misrepresented in its context and therefore we have decided to pull that statistic from our info graph," public relations consultant for Guidant Stacia Kirby said in an email. "Our mission is to help people get started and funded in owning their own business."

When it comes to black-owned business numbers, we couldn’t find another source that supports this increase from 2017 to 2018. The Annual Business Survey data about Business Owner Characteristics for 2017 is not yet available, and most recent census data related to minority-owned businesses is from 2016.

Robert Fairlie, an economics professor at the University of California-Santa Cruz, studies entrepreneurship and authored a book about its relationship with race in the United States.

Fairlie said there was no indication that African-American businesses had seen significant growth in the past year.

"That would be great if there was a 400 percent increase given that African-American rates are so low, but everything that I have seen from Census and BLS data does not show that kind of growth," Fairlie said.

Because of the small sample size and lack of corroborating data, we rate this claim False.

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"Black business ownership jumped 400% in one year."
in a blog post
Monday, August 20, 2018
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