Three Things President Biden’s Executive Order On Racial Equity Means For Small Business
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As part of his day one actions, President Joe Biden issued an executive order (EO) on advancing racial equity and support for underserved communities. The first question that comes to mind is whether there are any new requirements or rules? To date, no. Still, this executive action is important because it sends an important message about where the government and the private sector are headed. For small business owners who are struggling to survive the Covid-19 pandemic or have been forced to close because of it, this EO begins to address racial inequity in a way that will be helpful to rebuilding our country. That’s important for Main Street. Here are three important things to consider:
1. President Biden is taking issues of race and equity head on instead of pretending they do not exist. In fact, racial equity will be a significant driver of his agenda and the public conversation over the next four years. This order dissolves controversial steps taken by President Trump. The order revokes two divisive EOs issued last year by the Trump Administration, including the highly controversial one establishing the 1776 Commission, and makes achieving equity and removing systemic barriers a priority for all federal agencies.
2. This order sends a market signal for people who work with the federal government and corporate sector. This EO reinstates allowing diversity training in federal government agencies (something former President Trump also halted). Long a practice adopted by corporate America, achieving equity and diversity through staff education and training will be a goal for the federal government as well. By expanding this mission to federal agencies, this EO also prompts small businesses to think about how they can incorporate equity and diversity, which is important for future customer growth, staff retention, and market insight. Corporate America has already been headed this way. Small business owners who do business with corporations and the federal government should think about how to make race and equity a key component of their work.
3. More complete and better data may be on the way. This order establishes an Equitable Data Working Group, co-chaired by the Chief Statistician of the United States and the United States Chief Technology Officer with membership that includes several of the President’s top economic leaders. This could be good news for small business owners as we try to better understand how to help Main Street recover from the crisis and grow a more inclusive economy. Limitations in government data have made it hard to fully understand the current health and economic crisis. We know that the pandemic disproportionately impacted businesses of color and underserved communities, as 41% of Black-owned businesses closed compared to a 22% drop overall during the first wave of mandated shelter in place orders. In December, the largest survey focused on business owners of color commissioned by Reimagine Main Street in partnership with the Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship (National ACE), the US Black Chambers, Inc. (USBC), and the United States Hispanic Chamber of Commerce (USHCC) found that one in 10 small businesses expect to close permanently in the next six months and 45% expect to lay off at least one employee because of Covid-19. The survey found that these worries are even higher among minority-owned businesses. Having the government and its data helping us better understand communities of color will lead to better policy solutions and outcomes that will lift the tide for all Americans.
This EO begins to make the discussion of inequity a national conversation and move it from being anecdotal to data-driven. Acknowledging this inequality’s disparate impact on society and making addressing it a top priority is a crucial first step in finding solutions.
This piece originally appeared in Forbes on February 15, 2021. You can view it online here.
Rhett Buttle is the founder of Public Private Strategies, Executive Director of the Small Business Roundtable, Founder of the NextGen Chamber of Commerce, a Senior Fellow at The Aspen Institute, and a contributor for Forbes.
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