THE ECONOMIC IMPACT OF BLACK-OWNED BUSINESSES IN SOUTHWEST OHIO COMMUNITIES

INTRODUCTION

Founded in 1996 by a group of African American business owners and consumers, the Greater Cincinnati and Northern Kentucky African American Chamber of Commerce seeks to improve the economic status of African Americans and the African American community. The African American Chamber of Commerce helps to create new market opportunities, provide access to capital, and revitalize African American communities.

The Greater Cincinnati and Northern Kentucky African American Chamber of Commerce leverages regional partnerships and collaborates with organizations and supplier diversity and inclusion experts to empower businesses to succeed. The African American Chamber of Commerce is a business advocate through providing business education series, marketing programs, and networking events to grow Black-owned businesses.

The Greater Cincinnati and Northern Kentucky African American Chamber of Commerce engaged the Economics Center to examine the economic impact of Black-owned businesses within the Southwest Ohio economy. This study region consists of four Ohio counties.*

Understanding the economic impact of Black-owned businesses is particularly important as minority-owned businesses have grown at almost twice the rate (39.0%) of all other groups, making them one of the fastest growing sectors of the small business segment.** As the demographic of the United States becomes more diverse throughout the 21st century, minority-owned firms will continue to grow in their importance.

*The included counties are Butler, Clermont, Hamilton, and Warren.

**(Vowels, 2017)

The Economics Center and the Greater Cincinnati and Northern Kentucky African American Chamber of Commerce developed a comprehensive database of Black-owned businesses in Southwest Ohio.

Overall, 969 Black-owned businesses were identified and included as part of this economic impact analysis. This analysis resulted in the total number of establishments, employees, wages, and the abundant spin-off effects of these business operations in Southwest Ohio. Black-owned businesses contribute considerably to the Southwest Ohio economy through their operating expenditures. In 2022, the 969 Black-owned businesses included in the economic impact analysis supported:

OUTPUT

DIRECT

$1.2 Billion

INDIRECT

$875.1 Million

Total: $2.1 Billion

JOBS

DIRECT

3,668

INDIRECT

2,246

Total: 5,914

WAGES

DIRECT

$183.1 Million

INDIRECT

$123.0 Million

Total: $306.1 Million

COUNTY & MUNICIPALITY ANALYSIS

In addition to quantifying the economic impact of Black-owned businesses on four-county, Southwest Ohio Region, the Economics Center also quantified the economic impacts of Black-owned businesses at the county level. Further, Butler, Hamilton, and Warren counties were able to be disaggregated by smaller subregions. Clermont County lacked data for this disaggregation due to a limited number of businesses being included in the database.

The following sections identify the economic impacts of Black-owned businesses within the four counties and various subregions throughout the study area. The impacts of the individual counties and subregions represent the impact of that geography on the four-County study region.

Black-owned businesses operating in Butler County are responsible for generating more than $124.0 million of total output, and supporting 249 total jobs in Southwest Ohio with total earnings of approximately $12.3 million. The majority of the jobs directly supported by Black-owned businesses were located in the City of Fairfield, City of Hamilton, and West Chester Township as these three local jurisdictions accounted for nearly 85.0 percent of the direct jobs.

Due to data limitations, the Economics Center was not able to disaggregate Clermont County from individual municipalities within the County. Black-owned businesses in Clermont County are estimated to directly generate nearly $4.5 million in output, which supports 20 direct jobs with earnings of approximately $850,000 in 2022. The direct operations expenditures of Black-owned businesses located in Clermont County result in approximately $3.1 million of indirect economic output, and 8 jobs with more than $470,000 in earnings in Southwest Ohio.

Hamilton County had the highest number of businesses within the four-county study area. This enabled the Economics Center to quantify the impacts of numerous municipalities as well as neighborhoods and localities within the City of Cincinnati. Black-owned businesses operating within the City of Cincinnati’s Central Businesses District (CBD) have the largest number of direct jobs, earnings and output of any specific locality within Hamilton County. The operations expenditures made by Black-owned businesses located in Hamilton County are estimated to create more than $1.8 billon of total economic output in Southwest Ohio and support 5,169 jobs with total earnings of more than $265.5 million in 2022.

Black-owned businesses in Warren County are estimated to create more than $153.1 million in total economic output which supports a total of 468 jobs with earnings of more than $26.9 million throughout Southwest Ohio in 2022.

METHODOLOGY

Businesses were identified from a membership list that was provided to the Economics Center by the Greater Cincinnati and Northern Kentucky African American Chamber of Commerce as well as through community input from media appearances and survey data collection. Additionally, the Economics Center collected business information from several on-line Black-owned business directories. Companies were matched to unemployment insurance data received from the Ohio Department of Job and Family Services to retrieve the appropriate industry (two-digit NAICS codes), employment figures, and wages. For those companies not required to pay unemployment insurance, the Economics Center verified each through internet searches and social media activity. Where necessary, the Economics Center supplemented employment and wage data using industry-specific information for the Southwest Ohio economy.

The Economics Center calculated the economic impact of Black-owned businesses in Southwest Ohio using employment and wage data from the Ohio Department of Job and Family Services and Lightcast, a third-party economic and labor force data provider. These data were then included in an input-output model, which measures the economic activity in each industry and the use of those goods and services by other industries as well as households within Southwest Ohio.

In addition to quantifying the economic impact of Black-owned businesses in Southwest Ohio, the Economics Center also calculated the fiscal impacts in terms of local income and sales tax revenue generated for local and state government entities. The 969 Black-owned businesses included in the economic impact analysis generated:

A total of more than $13.5 million in fiscal impacts to the region and State.