Senate Democrats

AAPI Small Businesses: Diversity, Economic Growth, and Job Creation in America

America’s small businesses are the backbone of our economy, helping to keep the country competitive through innovation and new ideas. Democrats recognize that one of our nation’s greatest assets is our diversity. Investing in minority businesses, therefore, helps to increase the value of that asset and to promote economic growth and job creation.

Asian-American and Pacific Islander small business enterprises are growing. Over the last ten years, minority business enterprises accounted for over 50 percent of the two million new businesses started in the United States, crossing every industrial sector from financial services and health care to construction and transportation. Today there are more than four million minority-owned companies in the country with annual sales totaling $694 billion. Between 1997 and 2002, the number of Asian-owned firms increased by 24 percent and Pacific Islander-owned firms increased by 49 percent. (SBA Office of Advocacy, 4/2007)

Asian-Americans own 4.7 percent of all U.S. firms. There are 1.1 million Asian-owned firms in America, supporting 2,213,948 employees. There are 28,900 Native Hawaiian and other Pacific Islander-owned businesses, supporting 29,319 employees.

A state-by-state report on Asian-American and Pacific Islander small businesses is attached in Appendix A.

Minority-owned firms, however, make significantly less than their non-minority counterparts. The average gross receipts of minority firms were $162,000 – considerably lower than the $448,000 average gross receipts of non-minority firms. On average, for every dollar that a White-owned firm made, Pacific Islander-owned firms made about 59 cents; Hispanic-, Native American-, and Asian-owned businesses made 56 cents; and Black-owned businesses made 43 cents, according to the Small Business Administration (SBA). (SBA Office of Advocacy, 4/2007)

The Small Business Administration should be a resource for minority-owned firms. The SBA is supposed to reach out to more minorities, women and other underserved communities to market their financing, contracting, and training programs. For the last seven years, however, the Bush Administration has not made helping underserved communities a priority.

The continuing disparity between the number and earnings of minority firms in the United States and the continuing barriers many minorities face as they seek to start or expand a business demonstrates the need for targeted programs at the federal level for minority entrepreneurs. Despite signs that small businesses are facing increasingly difficult market conditions, President Bush’s Fiscal Year 2009 budget proposal for the SBA raises fees on loans, provides no funding for microloans, fails to invest in more contracting oversight, and cuts funding for key business assistance programs like Women’s Business Centers and Small Business Development Centers. 

Appendix A

AAPI-Owned Small Businesses

State

# Small Businesses

Jobs

Income

Asian-
Owned Small Businesses

Pacific Islander-Owned
Small Businesses

UNITED STATES

26,800,000

58.6 million

$992.5 billion

1,100,000

28,900

Alabama

368,500

826,200

$10.6 billion

4,300

100

Alaska

67,300

132,700

$2.4 billion

1,900

150

Arizona

473,000

1,000,000

$15.1 billion

10,200

350

Arkansas

247,700

499,800

$6.0 billion

2,100

60

California

3,675,700

6,900,000

$151 billion

371,400

7,100

Colorado

550,100

991,900

25.4 billion

10,900

390

Connecticut

347,600

774,800

$18.8 billion

7,200

170

Delaware

76,300

180,000

$2.5 billion

1,900

20

District of Columbia

65,200

207,200

$4.2 billion

2,400

50

Florida

1,942,200

3,100,000

$39.2 billion

41,300

1,480

Georgia

859,500

1,600,000

$25.6 billion

26,900

180

Hawaii

117,200

268,900

$3.1 billion

45,000

8,360

Idaho

151,300

284,700

$4.5 billion

1,100

100

Illinois

1,121,300

2,600,000

$42.5 billion

44,500

660

Indiana

486,400

1,300,000

$14.7 billion

6,100

110

Iowa

261,800

660,400

$6.4 billion

1,800

20

Kansas

246,900

609,800

$8.8 billion

3,600

40

Kentucky

346,200

759,200

$8.5 billion

3,200

60

Louisiana

364,900

895,600

$10.6 billion

8,200

80

Maine

154,000

302,700

$3.4 billion

800

30

Maryland

536,200

1,100,000

$16.8 billion

26,300

80

Massachusetts

651,100

1,500,000

$24.8 billion

18,100

210

Michigan

849,500

2,000,000

$28.4 billion

15,300

200

Minnesota

504,000

1,200,000

$13.1 billion

7,700

120

Mississippi

216,700

473,000

$5.8 billion

2,900

130

Missouri

508,900

1,200,000

$14.5 billion

6,400

100

Montana

115,700

224,700

$3.1 billion

500

40

Nebraska

161,800

400,700

$5.0 billion

1,500

10

Nevada

215,800

453,100

$6.7 billion

8,900

310

New Hampshire

145,900

311,500

$4.7 billion

1,500

20

New Jersey

828,400

1,800,000

$34.9 billion

51,900

450

New Mexico

158,200

338,700

$4.6 billion

2,400

140

New York

1,925,100

3,900,000

$85.4 billion

145,500

3,010

North Carolina

766,500

1,600,000

$19.1 billion

13,700

190

North Dakota

63,100

167,700

$1.7 billion

300

2

Ohio

920,500

2,400,000

$26.9 billion

13,700

230

Oklahoma

332,000

656,000

$16.4 billion

4,600

280

Oregon

350,500

771,400

$10.3 billion

9,100

350

Pennsylvania

1,006,900

77,800

$39.9 billion

22,600

290

Rhode Island

101,800

252,900

$2.8 billion

1,500

50

South Carolina

352,900

780,800

$8.1 billion

4,400

40

South Dakota

79,100

195,700

$2.3 billion

300

10

Tennessee

531,200

1,100,000

$23.3 billion

7,200

90

Texas

2,093,400

3,900,000

$122.6 billion

78,000

1,390

Utah

236,000

467,200

$7.0 billion

2,800

430

Vermont

80,300

162,800

$1.7 billion

400

40

Virginia

643,600

1,500,000

$20.7 billion

30,500

420

Washington

578,300

1,300,000

$19.4 billion

26,900

730

West Virginia

125,300

313,600

$3.6 billion

1,200

10

Wisconsin

447,200

1,300,000

$12.1 billion

5,000

100

Wyoming

61,900

129,000

$2.4 billion

400

20

Source: SBA Office of Advocacy, 2007. Minority-owned business data are from 2002, the most recent data available from SBA and the Department of Commerce. Statewide figures are from 2006, the most recent data available from SBA and the Department of Labor.

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