Accelerating Automation and Limited Credit Access: Challenges and Opportunities for Black and Brown Individuals and Businesses
Paper Session
Friday, Jan. 5, 2024 10:15 AM - 12:15 PM (CST)
- Chair: Kristen Broady, Federal Reserve Bank of Chicago
The Accounting and Financing Needs of New African American Female Business Owners
Abstract
In this study we examine the needs of thirty-six Black female business owners to determine their self-identified needs in the areas of finance and accounting. Our participants are located in a small, financially distressed area of Pennsylvania where over 26% of families live below the poverty line. Respondents indicated a strong need for assistance with cash flow management and access to capital. Respondents also indicated a need for assistance with managing data, accounting software management and inventory management. Black women are the fastest growing group of entrepreneurs in American. In our conclusion we discuss the importance of programs and training to equip them for business ownership and growing jobs in economically distressed communities.Race, Jobs, Automation and the Post-COVID-19 Future of Work in America
Abstract
The COVID-19 pandemic has accelerated trends in automation as many employers seek to save on labor costs amid widespread illness, increased worker leverage, and market pressures to onshore supply chains. While existing research has explored how automation may displace non-specialized jobs, there is typically less attention paid to how this displacement may interact with preexisting structural issues around gender and racial inequality. This analysis updates that of a 2021 Brookings paper by the authors, finding that Black and Hispanic workers continue to be overrepresented in the 30 occupations with the highest estimated risk of automation and underrepresented in the 30 occupations with the lowest estimated risk of automation. The updated analysis also includes new attention to automation’s impact on women workers, wage structures, a consideration of the broader implications of automation for global economics, and a discussion of the potential interplay of automation with recent developments in artificial intelligence.The Impact of Automation on Entrepreneurial Outcomes in the Service Industry by Race and Gender
Abstract
In dynamically changing business environments, the usage of automation to reduce costs and increase efficiency and ease of use, is drastically increasing. Increased automation may yield impacts differently on opportunity entrepreneurs than necessity entrepreneurs, and this relationship may be impacted by race and gender. Thus, as automation is vastly implemented, its comparative impacts on entrepreneurs across various settings should be examined. This paper investigates relationships between race, gender, and opportunity and necessity entrepreneurial outcomes in the service industry. The paper also explores whether HBCUs with entrepreneurship programs can help to improve any adverse impacts on entrepreneurial outcomes. The study uses logistic analysis to compare odds ratios of various demographic groups of entrepreneurs to examine the relationships described above in the service industry. Our analysis combines Kauffman Early-Stage Entrepreneurship (KESE) index data over a 25-year period, and Integrated Postsecondary Education Data System (IPEDS) data to test the study’s hypotheses. The expectation is that necessity entrepreneurs within the service industry will experience a negative correlation to economic growth due to increases in automation. It is also expected that an increase in institutions with an emphasis in entrepreneurial programs will help to improve the prior expectation.Consolidation of Banks and its Impact on Minority-Income Dynamics
Abstract
The last three decades are characterized by an acceleration of mergers and acquisitions in the US banking industry. While a voluminous literature chronicles the underlying reasons for bank mergers, few studies focus on the external economic effects, especially on the income and employment dynamics of minority groups. Local financial market structures and access to external capital is extremely important for economic mobility in historically underprivileged communities. Using individuals’-level data sourced from ACS for the period 2005-2020, we examine the impact of M&As on income, self-employment, and weekly hours worked on minorities.We measure the intensity of M&As by the share of deposits in branches of acquired banks to total deposits in a PUMA and its effect on individuals’ income and weekly hours worked. We find M&As significantly increase the incomes of Hispanics, and weekly hours worked by Hispanics and Blacks. We also distinguish M&As according to whether in-market or out-market banks initiated the M&A transaction. We find heterogenous effects on the type of acquirer on various minority groups. For instance, Blacks and Native Americans fair better when the acquirer bank was already present in the PUMA. While Hispanics see improvements with either type of acquirer. We further examine the impact of M&As on self-employment. We find M&As significantly increase the likelihood of becoming self-employed for Asians and Native Americans. In-market acquisitions improve outcomes of the four minority groups. When minority-owned banks are acquired, it reduces self-employment for all groups except Hispanics. However, Hispanics see a reduction in hours worked.
Discussant(s)
Quentin Johnson
,
University of Chicago
Haydar Kurban
,
Howard University
Andre Perry
,
Brookings Institution
Marionette Holmes
,
Spelman College
Raffi García
,
Rensselaer Polytechnic Institute
JEL Classifications
- G2 - Financial Institutions and Services