Thank you, Henry, for that kind introduction. And thank you for the work that you and your team are doing at MBDA to support not just minority businesses, but the economic development of our entire country.
Thank you, also, to the Milken Institute and to Mintz for co-hosting this event. The Milken Institute has been instrumental in driving a constructive national dialogue and agenda for growing our economy. It is also great to see the work that Mintz is doing to provide access to capital, promote Opportunity Zones, and represent the legal interests of minority-owned enterprises. Thank you.
With MBDA now celebrating its 50th anniversary, we know how important minority-owned firms are to the future of our economy. The Minority Enterprise Development Week has been instrumental in highlighting the significance of, and challenges facing, this growing business sector. You have had an impressive roster of both speakers and attendees over the course of the past three days. It’s an indication of the commitment that Americans have for helping each other succeed. I look forward to reading the deliverables from the week, especially ideas on how to promote the creation of thousands of more successful minority businesses.
I’m also interested in how we can better measure the impact of minority-owned enterprises on our economy, and, especially, how we can remove barriers limiting their growth. We are in the midst of the strongest economy the United States has experienced in decades. At 3.7 percent, unemployment is at historical lows. And there are an astounding 7.3 million open jobs that need to be filled. Wages are growing at an annual rate of more than 3 percent — the fastest since 1969. More than 6 million jobs have been created since President Trump’s election, including 500,000 in the important manufacturing sector. Data released this week show that the U.S. poverty level is the lowest it’s been in nearly 20 years. And, for the first time ever, the majority of new hires in the 25- to 54 age-range are minorities.
There is also goods news on the number of new businesses that are being created. According to the Census Bureau’s recently created Business Formation Statistics series, the number of new business applications submitted in the United States reached more than 866,000 in the second quarter of this year. That is an increase of almost 1 percent over the same period last year. That does not mean every one of these businesses will be established. But it does indicate that Americans are looking favorably on creating new companies. Of the total quarterly business applications, the Census Bureau projects that 79,000 companies will be created within the next year. Unfortunately, we do not have detailed statistics describing these new businesses.
We do know, however, that there is a racial wealth gap that is negatively impacting the shared benefits of a growing economy. McKinsey and Company estimates that this wealth gap will dampen the effect of consumption and investment in the U.S. economy by between $1 trillion and $1.5 trillion between 2019 and 2028. That could be as much as 6 percent of GDP in 2028. Minority-owned firms earn just 48 percent of the revenue that non-minority-owned firms earn. Even though minorities represent 38 percent of the U.S. population, they only own 19 percent of U.S. business revenues.
In the inner cities, where 76 percent of the population is minority, less than one-quarter of businesses are minority-owned. This despite the advantages that U.S. minority firms have in the markets in which they operate. They are twice as likely to export, due to connections with other nations, cultures, and economies. The U.S. workforce is projected to grow much slower in the future, and the little growth there is will come mostly from minority groups. It tells us that we need to empower our minority businesses to grow and create jobs. MBDA is ready to do that. It has worked with more than 13 million minority firms over the past 50 years.
Now, we must develop an action plan for the next 50 years. We must make it easier than ever for an individual to start a business. Our new entrepreneurs should be focused on growing an enterprise and hiring workers, instead of being hampered by red tape, permits, paperwork, and taxes.
I ask that you stay engaged with our MBDA team so that your work can turn into solid policy proposals that can be implemented to generate the creation of new minority businesses. Help us create pathways to entrepreneurship so there is a renaissance of minority innovators turning their good ideas into great companies. If somebody can make a business out of an un-tucked shirt, then it is obvious that opportunities abound.
Our country relies on business and industry to lead in the global economy. Creating new and growing companies is the most exciting and positive way to address the challenges of our majority-minority population. Thank you, again, for your dedication to this essential cause. I look forward to hearing more about your discussions and suggestions. Thank you.
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