April 23, 2020
Councilor Michelle Wu, Chairperson
Committee on Planning, Development, and Transportation
Boston City Council
1 City Hall Square, 5th floor
Boston, MA 02110
Madam Chairperson and honorable City Councilors:
On behalf of the Board of Directors of the Black Economic Council of Massachusetts (BECMA) and our 300 business members, I wish to express gratitude for the opportunity to offer testimony in support of Docket #0584, “Order for a hearing regarding planning for an equitable recovery from the impacts of COVID-19.”
I want to acknowledge at the outset of these comments the herculean efforts of our frontline health workers and professionals who are working tirelessly to treat those in our community who are sick and helping them to either recover or to be the last kind hand our loved ones hold. I also want to applaud our essential workers - many who are women of color - who, by necessity, continue to transport the food or stack store shelves or deliver the essentials right to our homes.
This is a critical time for all of us, most especially for the Black community across the nation in general, and in the greater Boston area more specifically. A recent McKinsey study notes that, nationally, Black Americans are “twice as likely to live in areas where, if contagion hits, the pandemic will likely cause outsize disruption.” The report also notes that “39 percent of all jobs held by [B]lack Americans—compared with 34 percent held by white Americans—are now threatened by reductions in hours or pay, temporary furloughs, or permanent layoffs, totaling 7 million jobs.”
Locally, the statistics are equally alarming. According to census data, in Massachusetts, over 1,200 Black-owned firms employ 14,000 people and contribute over $1 billion to the state economy. When we surveyed our membership in early March, we found that over 90% of respondents were already facing a somewhat to severe financial impact; that over 60% only had cash reserves to last them up to 90 days, if at all; and that over 40% would have to lay off staff in order to temporarily survive. This was close to 60 days ago.
It is safe to say that a large portion of these businesses are based in Boston, as we know as an organization that Black businesses tend to locate in their own communities. Due to the stay-at-home order issued two weeks after our survey, we know that these numbers are now desperately higher. The Black Boston community, in McKinsey’s words, are experiencing an outsized disruption.
An April 2020 report from the Brookings Institution noted that, "Although [minority-owned businesses] were more likely to shutter during the Great Recession, they helped stabilize the economy during the recovery period. Nationally, [minority-owned businesses helped to] add 1.8 million jobs from 2007 to 2012, while firms owned by white males lost 800,000 jobs, and firms equally owned by white men and women lost another 1.6 million jobs." When we invest in Black- and other minority-businesses, not only do these communities thrive, but the entire economy is saved.
For this reason, it is profoundly important that the city balance its efforts to address the immediate public health crisis with an effort to save and protect Black- and other minority-owned businesses. If quick and decisive action is not taken, we could see the deepest growth of the racial wealth gap in our time, which would have short- and long-term effects on both the health and wealth of our entire city long after the virus has passed.
Federal programs are not enough to stabilize our business community. As we noted in a recent Boston Globe editorial along with our colleagues Betty Francisco, Bob Rivers, and Steve Grossman, the desire of Congress and the White House to get money out quickly rather than fairly created a “gold rush” mentality that locked many of our small businesses out of the opportunity to receive emergency capital. The new package being deliberated in the House right now is set to repeat these same mistakes and to ensure that one of the largest transfers of wealth in our lifetime will bypass communities who continue to be ignored.
The state also continues to fumble its responsibility to the Black business community as they are relying only on federal efforts to stave off disaster. That’s why we joined a coalition with the Massachusetts Association of Community Development Corporations (MACDC), Amplify Latinx, and over 75 other statewide organizations calling on Governor Baker and the Legislature to set aside $150 million to provide grant relief, low-interest loans, and technical assistance for our businesses.
While we continue this needed advocacy, we know that the City of Boston cannot wait.
As we sit here and talk today, another Black-owned business is putting up a “closed” sign in its window; several Black and Brown workers are being told via email or Zoom or text that their job is no more; and dozens of families are wondering how to pay off their mortgage or growing debt. Because we believe at BECMA that business ownership plays a large role in reducing or eliminating the racial wealth gap, it is critically important that the city act now to invest in our businesses and thus the future of all.
In order to ensure the City appropriately addresses the needs of our businesses both in this current moment and in the coming weeks and months, we believe the city must do the following:
Collect and Report the Data
The Office of Economic Development has already begun collecting data on small businesses across the city. We encourage the continuation of this effort throughout the crisis and into the recovery phase to help guide where the City and other partners should direct the most resources.
Seek Guidance from Local Experts
To address issues affecting the Black community we strongly encourage that this Council form an advisory committee made up with experts like Ms. Mukiya Baker-Gomez, Mr. Louis Elisa, Sen. Dianne Wilkerson, Mr. Andre Porter, Mr. Reggie Nunnally, Ms. Andrea Laing, Mr. Ron Marlow, and others who have worked in the economic development space for many years and who have done this work before.
Get PPE to Business Owners and Workers
As we continue to support efforts to get Personal Protective Equipment (PPE) to families and front line workers, this body can support local coalition efforts to provide protection equipment to local businesses deemed “essential.” Owners and workers continue to go to their job sites without protective equipment because of the lack of availability or inability to access marketplaces that sell PPE. This creates a further health crisis by increasing the likelihood of spreading the virus to colleagues and bringing it back to homes and communities.
Support for Small Business Relief Efforts
Continue to fundraise for their fund and also enhance their capacity to provide technical assistance to those who do receive grants. Must also support local efforts like the Business Equity COVID-19 Emergency Fund focused specifically on supporting Black and Brown businesses.
Advocate for a Rent/Mortgage Moratorium
While the state recently passed legislation to halt evictions on renters and business owners who are not able to meet their obligations, this does not address the fact that many small business owners just cannot afford to pay their rent or mortgages at this time. As these expenses accrue, this legislation does not prevent prevent a landlord from beginning the eviction procedures immediately following the sunset of this legislation. This body can work with banks to place a moratorium on mortgages for landlords, who must then agree to cease the charging and attempted collection of rents for small business tenants.
Release the Community Preservation Act Funds
On April 22, 2020, notable columnist Joyce Ferriabough-Bolling pointed out in an important editorial that the City Council has yet to Community Preservation Act funding. We echo her calls to release these funds, which could potentially provide up to $4 million to help support local small businesses.
Equitable Participation in City Contracts
Almost one year ago, we sat in the Iannella Chamber of the City Council to discuss equity in city contracting and the lack thereof. This body must hold the Administration accountable for ensuring that our businesses are able to contribute to the recovery by obtaining lucrative contracts that will help grow their business and their capacity to hire people now standing in long unemployment lines. We also call on this Council to review the recommendations we made in 2019 on removing existing barriers to city contracts so that minority-owned businesses have a fair shot and equal access to these opportunities.
Thank you again to the co-sponsors of this hearing order -- Councilors Wu, Arroyo, and Mejia. I appreciate the invitation to join this group of leaders to discuss this issue and look forward to working with you all to ensure the health and wellbeing of our business community moving forward.