Economics 101: Racism damages Peoria’s economy

Larry Ivory

Entrepreneurship and more Black-owned businesses are key to overcoming racism and closing the wealth gap, says Larry Ivory, president and CEO of the Illinois State Black Chamber of Commerce. (PHOTO BY CLARE HOWARD)

Larry Ivory knows social and economic inequality can be measured and traced throughout American history. It’s an anchor that weighs down the American capitalist economy and is a valve threatening to explode under pressure.

Ivory, president and CEO of the Illinois State Black Chamber of Commerce and chairman of the National Black Chamber of Commerce, sees the threat and advocates proven solutions.

The economics of racism is apparent in the gap in net worth: $17,000 for a typical Black family compared with $170,000 for a typical white family.

“The gap is even bigger in Peoria than the national numbers show,” Ivory said. “In Peoria, the comparison is $11,000 to $200,000.”

More is needed beyond jobs and increases in minimum wage. Ivory said Black-owned businesses are key to closing the wealth gap. Yet barriers to Black-owned businesses are almost insurmountable. Policy change is needed.

Three out of five Black Americans have difficulty obtaining credit and that means they cannot access funding except at exorbitant interest rates.

“That means Blacks can’t start a business or buy a home. There are barriers to getting out of the hole,” he said. “Black-owned small businesses must be a priority for Peoria to prosper.”

The G.I. Bill after World War II was supposed to be an economic boon but of the hundreds of thousands of returning soldiers who accessed opportunities through the bill, few Blacks were among the beneficiaries.

The same happened today with the government’s COVID-19 pandemic support for business.

The Payroll Protection Program that pumped billions into business loans did not reach small Black-owned businesses. The bailout was for businesses with employees but most Black businesses are sole proprietorships with family working in the business. That meant there was no payroll to present on the PPP loan application form.

Ivory said this exclusion of aid to small Black-owned businesses underscores the need for diversity on corporate boards, in the workforce and in government. Few people could analyze the PPP program and understand the exclusion of Black-owned businesses.

“The SBA defines small business as up to 500 employees, but Black-owned businesses are mom and pop,” Ivory said, noting that even the Congressional Black Caucus did not perceive this loophole in PPP.

The Congressional Black Causcus is comprised mostly of people who come from backgrounds in education and social services, not business. Ivory makes the analogy social services give people a fish – and then must continue to give that fish.

“You give a fish and you have to continue to feed every time. It’s like a drug dealer with crack. Social service people come with that agenda, but we need leadership from business – from people who see small business ownership is the solution to closing the wealth gap,” Ivory said.

In Peoria, black-owned small businesses do not even show up in statistically significant numbers in the census.

Ivory said change has to come from white voices and Black voices. The government needs to change public policies and support more Black-owned businesses. One way to support Black business is to focus the $1 trillion in spending by Black Americans on Black businesses.

Peoria is widely viewed as the worst city in the United States in terms of Black income and incarceration rates and to correct that, the city needs to foster more Black-owned businesses, Ivory said. Yet even though he has clout in Washington, D.C., and the Black Chamber is in 24 foreign countries, he can’t get return phone calls from Peoria City Hall, he said.

“If people had money and owned businesses, they would not be robbing and looting. They would not be left out of the system,” Ivory said. “We need the leadership to accurately define this problem.”

For Robin Grantham, community development and engagement manager with PCCEO, economic racism was something she witnessed growing up. When her family came to Peoria in the 1960s, there were good jobs at Caterpillar, Hiram Walker, Pabst, Keystone and Wabco.

“People were still share cropping and picking cotton in the South, but in Peoria people could carve out a middle income,” she said.

Her father worked at Caterpillar but still, despite his steady income, had to buy the family homes on contract for deed.

“There were barriers to Black families getting bank loans,” said Grantham, who worked in real estate for years.

Homes sold contract for deed were often priced above the appraised value and if one payment was missed the home would revert to the seller with no equity built up for the buyer.

Lack of bank access, covenants and restrictions were designed to keep Blacks out of home ownership, something historically seen as an effective method of building wealth.

“As a former real estate agent, I watched people close on homes in some neighborhoods for $30,000 and then sell them for $90,000 or $100,000. That was a way to build wealth. That was your retirement. But that did not happen for Black people,” she said.

“How many times have we heard ‘Black folks need to pull themselves up by the bootstraps.’ Well, we’ve done that over and over.”

What is needed is systemic change that facilitates Black entrepreneurship and home ownership, Grantham and Ivory contend.

“If you don’t experience racism, maybe you won’t see it. If you can get a business loan, maybe you can’t understand being turned down. You could deny racism existed before you saw George Floyd with a knee on his neck. Now that dirty little secret is clear,” Grantham said. “You can’t deny it, and you can’t look away.”

Year after year, she has read minutes of meetings discussing affordable housing in Peoria and year after year, the same questions are asked.

“Why are we not making any progress?” she said.

Inclusionary zoning is one solution she’d like to see widely implemented. Under this arrangement, developers receive permits only if a segment of the project is dedicated to affordable housing for low-income families.

“We don’t need subsidized housing in concentrated areas. We need more development like Spring Grove with both market and affordable units and no one knows which are which,” Grantham said.

For more information on the Illinois State Black Chamber of Commerce, go to

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