Entrepreneurship: The Modern Day Crime-Stopper

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According to the US Census Bureau’s Survey of Business Owners (SBO), the number of African-American-owned businesses has grown at a rate three times faster than that of all businesses across the country. Historically, minority entrepreneurship has grown out of necessity, as many have faced job loss from diminishing availability of manufacturing jobs, as well as discrimination in the job market. As a result, many minorities have pursued self employment to support their families. This trend has become especially prominent in African-American communities today, with major implications for youth in these communities.

A study by Karen F. Parker from the University of Delaware’s Department of Sociology and Criminal Justice explores the connection between the rise of African-American-owned businesses and the rate of violent crime among black youths. The research primarily analyzes whether the increase in both African-American-owned businesses and paid job opportunities is associated with a decline in Black youth violence in cities. Central to this hypothesis is previous research discussing the role model function that African-American business owners have embraced by serving as examples of economic success, especially in disenfranchised communities, which may potentially guide adolescents away from crime through seeing a stable pathway for the future. This progression, which may seem overly idealistic, is most often observed in urban neighborhoods when accompanied by actual job opportunities and social networks that minority businesses provide to those just entering the job market.

Utilizing data from the FBI’s Uniform Crime Report (UCR), the study analyzed the average violent arrest rates of African-American youths during 1990 and 2000 to compare multiple factors having an impact on the local urban economy. Specifically, Census and SBO data provide information on community demographics—such as poverty levels, income inequality, and prevalence of single-parent households, as well as business trends, including employment rates, job availability by industry, and business ownership rates—in order to assess their relationship with juvenile crime. Overall, the study reveals that, between 1990 and 2000, the rate of violent crime among African-American adolescents dropped by 29 percent, while concurrently, African-American-owned businesses grew by 22 percent.

While the results of this study may seem compelling, limits exist related to its broader policy implications. First, the conclusion that the growth of African-American entrepreneurship has an inverse effect on youth crime only applies to crime designated as “violent” where an arrest actually occurred. Therefore, these data not only exclude nonviolent crime but also crime where police did not make an arrest. Additionally, the study did not control for nationwide violent crime trends, which may also serve as a contributing factor to the decrease in arrest rates. Lastly, future research should more closely examine and quantitatively measure the impact of African-American entrepreneurs as role models for youth in urban communities. By providing greater evidence in this area, government programs and nonprofit organizations that are focused on crime prevention in African-American urban communities can appropriately direct funding to support the growth of African-American-owned businesses in the future.

Article Source: Parker, Karen F., “The African-American Entrepreneur—Crime Drop Relationship: Growing African-American Business Ownership and Declining Youth Violence.” Urban Affairs Review, 2015.

Featured Photo: cc/(monkeybusinessimages, photo ID: 85196847, from iStock by Getty Images)

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