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How a few intrepid entrepreneurs are closing Cincinnati’s racial business gap

The Queen City is enjoying a commercial rebirth but staggering disparities separate black workers and businesses from their white counterparts.

How a few intrepid entrepreneurs are closing Cincinnati’s racial business gap
[Photo: ChrisBoswell/iStock]

Capital & Main is an award-winning publication that reports from California on economic, political, and social issues.

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When Cincinnati chef Salimah Abdul-Hakim left Ohio for Atlanta in 2011, she fell in love with her new city’s diverse food scene. Four years later, after Abdul-Hakim had moved back home, she became frustrated by the lack of healthy food options in her community. She decided to start her own catering business, Soleil Kitchen.

“You had Popeyes, Wendy’s, McDonald’s, a lot of fast food chains,” Abdul-Hakim says in reference to Walnut Hills, an historic black neighborhood in Cincinnati that was once home to abolitionist Harriet Beecher Stowe. Abdul-Hakim has her hair up in braids and is wearing a black Adidas hoodie and a simple golden chain featuring a pendant in the shape of Africa. Walnut Hills had become one of the city’s largest food deserts when national grocery chain Kroger closed its only location there three years ago, leaving one of Cincinnati’s poorest communities without easy access to food. Abdul-Hakim said it was easier to create her own solution than to complain.

Salimah Abdul-Hakim [Photo: 12am Media/courtesy Capital & Main]
Abdul-Hakim’s story as a young entrepreneur of color creating her own opportunities in the face of economic necessity is not uncommon at a time when racial disparities and generational poverty have further entrenched the income wealth gap between blacks and whites. Predominantly minority neighborhoods like Walnut Hills suffer from a persistent lack of resources, while others fight off gentrification. While Democratic presidential candidates Bernie Sanders and Joe Biden are explicitly campaigning to reduce inequality, the potential of entrepreneurship to help address long-term poverty in communities of color has not yet emerged as a major election talking point ahead of Ohio’s March 17 primary.

Abdul-Hakim’s mission for Soleil Kitchen is inextricably tied up with her own identity and experience as a black woman. Serving a profitable fusion of multicultural cuisines, her business offers an à la carte menu to folks who can’t afford catering and hosts pop-up events for local organizations that help Cincinnati’s inner-city neighborhoods. It also offers meal prep and private and traveling chef services. Her employees are mostly local young black women. She also hires ex-offenders.

“If you don’t have a support system you’re more likely to fall into the same circumstances that landed you in your position in the first place,” says Abdul-Hakim, who once watched an uncle struggle to get a job and decent housing because of a felony conviction. She counts criminal justice reform as one of her top issues this election year.

Queen City’s comeback

The 28-year-old’s success parallels the recent, unexpected rise of Cincinnati as a burgeoning hub of entrepreneurship, innovation and culture. In 2018 the New York Times anointed the Queen City No. 8 on its annual list of 52 Places to Visit. Last January, Cincinnati also ranked in Lending Tree’s Top 10 list of the largest 50 U.S. metropolitan areas where minority entrepreneurs were finding success.

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The resilience of Cincinnati, located on the north bank of the Ohio River and overlooking Kentucky, may be rooted in the fact that the city has never depended on one single industry. With a history of meatpacking, soap-making and machine tool production throughout much of the 20th century, Cincinnati’s diverse economy has paved the way for eight Fortune 500 companies, including Procter & Gamble, Kroger, Fifth Third Bank and, until recently, Macy’s Inc., to set up their headquarters in the region. It largely weathered the post-industrial bust in the Midwest during the 1980s, unlike many of its Rust Belt neighbors, including Dayton and Youngstown. The Cincinnati region has continued to enjoy strong and sustained growth, according to a 2016 report from the Federal Reserve Bank of Cleveland. Local unemployment is below the national average, although a 2017 National Urban League report noted staggering disparities for black workers in the region, who had an 11.7 percent unemployment rate compared to 4.5 percent for whites.

Abdul-Hakim feels she would not have enjoyed the same amount of support at larger entrepreneurial hubs like Oakland or San Francisco, where startups have already saturated the market. However, her success comes with a big caveat: She contends the local business community needs to be more diverse.

Only 18 percent of Cincinnati businesses are black-owned in a city that is almost 45 percent African-American, according to a 2015 report. The same report states that minority-owned businesses find themselves largely excluded from Cincinnati’s growth, collectively contributing only about 1 percent to the regional GDP. The 2010 census lists the Cincinnati area as one of the 10 most racially segregated metropolitan areas in America, with poverty and unemployment rampant in many of Cincinnati’s inner-city neighborhoods. According to the National Urban League, white families earned twice as much as black families in Cincinnati in 2014, and nationally the city ranked near the bottom in a list comparing median household incomes for whites and African-Americans across 77 metropolitan areas.

The stark economic disparities in the Cincinnati metro area mirror the yawning racial wealth gap across the country, where the net worth of a typical white family ($171,000) is 10 times greater than that of a black family ($17,150), per a report released late February. Up until the time they dropped out of the presidential race, some candidates, including Senator Elizabeth Warren, former New York City Mayor Mike Bloomberg and former South Bend Mayor Pete Buttigieg, had each promoted their own policy proposals around the value of entrepreneurship in helping close the wealth gap for low-income minorities. During earlier debates, Senator Cory Booker had also touted the idea of creating economic opportunity and wealth generation for black Americans.

Today’s leading contenders for the Democratic nomination have not revealed much information about what they plan to do for small businesses if elected, although Sanders has supported small businesses throughout his tenure in the Senate, including introducing recent legislation to cap interest rates for all consumer loans at 15 percent. At the start of the election cycle, Abdul-Hakim had loved Andrew Yang because he was a “little bit more progressive, younger and a minority.” His Silicon Valley experience was also a big plus. Then soon after he dropped out, she had felt torn between a couple of candidates. Now it’s Bernie, hands down.

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“[I] will say I am curious as to how he’ll pay for everything he suggested,” Abdul-Hakim says. “It’s being said that his plan would cost at least $25 trillion, although I feel that our government can figure out a practical solution to his plan if the right people are in place.”

The small business owner also likes Sanders’ idea of imposing heavy taxes on billion-dollar companies like Amazon, but she does worry that tax hikes will still affect mom-and-pop businesses like hers. Having to pay more in taxes might cut into Soleil Kitchen’s bottom line, she notes, affecting her ability to hire and offer a good benefits package compared to larger retailers. She currently does not provide health insurance for her workers because the prices are “ridiculous,” but hopes to be able to do so in the future.

Indeed, employer concerns around benefits, particularly when it comes to health care, are increasingly emergent: A 2019 Commonwealth Fund national survey found that 37 percent of small business owners are worried about health care costs, and over two-thirds of these businesses said the problem is only getting worse. To that end, Abdul-Hakim supports Sanders’ Medicare for All proposal, but she also thinks people should be able to choose and keep their private insurance if necessary.

Walnut Hills’ historic business district. [Photo: Nyttend/courtesy Capital & Main]
Despite the delicate balancing act that comes with managing a small business, Abdul-Hakim strongly believes in a livable wage. She currently pays her employees between $13 and $15 per hour depending on experience. (Ohio’s minimum wage is $8.70 per hour.) As a former Macy’s and Nordstrom employee, she is familiar with the compromises one has to make while living on a limited income: “I know what it’s like to say, ‘Oh, minimum wage.’ No, honestly, you’re living in poverty.”

Starting a business may provide people and their families with the power to move out of poverty, according to local minority business incubator MORTAR. Founded in 2014, the black-owned and black-staffed MORTAR runs a deep-dive training program for budding area entrepreneurs of color, most of whom are black women, and helps students with fundraising, mentorship and networking.

“We see [entrepreneurship] as one of the viable ways for people of color, minorities and marginalized people to create real wealth for their families,” says Victoria Mullins, a former arts teacher who now works for MORTAR.

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MORTAR is located in the middle of rapidly gentrifying Over-the-Rhine, a historically poor and predominantly African-American area in downtown Cincinnati once described as America’s most dangerous neighborhood. In 2001, police shot and killed an unarmed 19-year-old man named Timothy Thomas – the 15th black man killed by Cincinnati police officers in the five years prior to 2001 – sparking four days of rioting that caused nearly $4 million in damage to local businesses and public buildings.

Since then, the city and a prominent nonprofit development group have spearheaded a massive effort to revitalize Over-the-Rhine, although many longtime  residents feel their concerns about affordable housing and preserving the neighborhood’s diversity have been pushed aside. “We wanted to have some black and brown faces down here,” Mullins said of MORTAR’s intent to diversify the Over-the-Rhine business scene. The group is continuing to work with local developers, who have now pledged to more than double Over-the-Rhine’s minority and black-owned businesses.

Last summer, following the success of Soleil Kitchen, MORTAR alum Abdul-Hakim moved to a loft in Over-the-Rhine to be closer to work and have more space. However, she finds living in the neighborhood “bittersweet,” because while she enjoys the breadth of new businesses that have opened up, it’s difficult for her to see many longtime residents become displaced because they can no longer afford to live there. Like Victoria Mullins, she would also like to see more black-owned businesses in the area.

Turning a passion for baking into a business

Over-the-Rhine native and professional baker Jasmine Ford felt scared when she first thought about opening up a business in 2015. She knew nothing about starting one or even knew anyone who had been a business owner. She says she had to do a lot of crowdfunding on social media to get her bakery started. She called and texted everyone she knew and, in the meantime, worked as a housekeeper at a local hospital and found other part-time jobs to supplement her income.

Jasmine Ford with a finished wedding cake. [Photo: Jazzy Sweeties/courtesy Capital & Main]
In about a month and half, Ford had raised $10,000 through a Kiva Zip campaign. A bank also ended up matching her. She says that only her passion for baking kept her going.

“Anytime I thought about quitting, something would always come up. Someone would call in with an order that would cover the cost of something that
needed to be paid for,” says Ford, who was 23 when she first opened the now-popular Jazzy Sweeties in the heart of Walnut Hills. The 28-year-old has a quiet presence behind the counter, with big eyes and a soft smile. Her specialty is strawberry crunch cake, which sells out every time she posts about it online. “This is something I’m supposed to be doing. I know it, I feel it.”

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Fundraising is the biggest problem all first-time business owners face, but it’s compounded for many entrepreneurs of color like Ford. High-interest startup loans, including the influx of cash needed upfront for permitting, licensing and registration, discourage minorities from the get-go. An understanding of retail spaces and commercial leases is also crucial. Ford admits it was a difficult learning curve: She was paying rent on an empty storefront for almost two years before she could finally open Jazzy Sweeties.

Salimah Abdul-Hakim cashed out her 401(k) after leaving her last job as a corporate communications officer for Delta Airlines, something she doesn’t recommend because the tax liability was “horrific.” But, she says, she needed to do it in order to start her business.

“A lot of minorities bootstrap. And that’s great to a degree because you’re not accumulating a bunch of debt, but what I’ve seen hinder a lot of black businesses is that they’re not able to scale to their full potential, because they don’t have the financial backing of our white counterparts,” Abdul-Hakim adds. According to a 2016 Stanford Institute for Economic Policy Research discussion paper, the average level of startup capital available to black entrepreneurs is about $35,000, significantly less than the average $106,000 for white entrepreneurs. New businesses helmed by whites also continue investing significantly more in their first year of business than black entrepreneurs.

Lisa Sloane, owner of the regional multicultural training and consulting company More Inclusive Healthcare, feels the biggest challenge for minority entrepreneurs is a lack of built-in support and access to networks. “We can have fabulous products, but my grandfather doesn’t know so and so’s grandfather, whose son is now the CEO of a Fortune 500 corporation. Then I don’t have the same opportunity as the white guy sitting next to me,” she says. Sitting at a table in a coworking space in a northeastern enclave of Cincinnati, the soft-spoken 57-year-old adds it’s challenging to get more clients at a time when the Trump administration has cut resources for value-based health care services like hers.

Sloane supports Medicare and Medicaid expansion, but only incrementally, given, she says, the huge swathes of uninsured people and those with private insurance currently in the system. The cost of her health insurance has more than doubled over the last 12 years, and now she has to pay $8,000 annually. This was one of the reasons she initially admired Bloomberg as a candidate and agreed with his proposal to expand Medicare. But while his pragmatism and business success had appealed to her, she became disturbed by the lack of empathy she said he showed with regard to  racial and criminal-justice issues. She now plans to vote for Biden in the Ohio primary, citing his familiarity with African-American issues and the growing cadre of black lawmakers and officials who have endorsed him. More importantly, she feels Biden is in a good position to address criminal-justice reform for black and brown people.

“The Republicans have been pushing in very conservative judges for four years at a rapid pace, and that worries me about the future for younger people in this country,” Sloane says. “Having Biden in office would lend itself to more qualified and less ideological judges.”

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‘We’re left out of so much’

Traditionally, the realities of market dominance and power in the interest of profit have worsened poverty and structural inequality in communities of color. In recent years, however, a combined effort from Walnut Hills residents, business owners and developers has encouraged the neighborhood’s redevelopment with deliberate consideration for the primarily minority locals in mind.

Black-owned businesses like Jazzy Sweeties have started opening up again on East McMillan Street, a historically thriving commercial strip that cuts through the heart of Walnut Hills. A barber shop, beauty salon, funeral parlor and soul food restaurant are some of the businesses surrounding Jasmine’s part of the block. Further up the road, another black-owned café, a BBQ joint and a sneaker store have opened in recent years. This summer, Cincinnati’s first African-American and Asian-American-owned brewery will also open its doors as part of the massive renovation of a once-dilapidated, art deco-inspired 1930s building that many Cincinnatians consider to be an iconic symbol of Walnut Hills. The idea is that encouraging minority-owned business will help provide black Americans with a path to upward mobility, as it has in the past.

As Jasmine Ford serenely awaits customers in her store, politics seem to be the furthest thing from her mind. She says she already feels exhausted by the chaotic election cycle. She does not follow the news and only gets bits and pieces from her husband.

“I was one of those people who was like, ‘They do what they wanna do,'” Ford says in reference to the career politicians in D.C. She lets out a deeply held sigh and laughs. “It’s at that point. But I know we need to get out of that, especially because the most important part of the election is the people that we elect for our state. It’s really not the president we should be worried about.” Looking back, she wishes there had been more knowledge imparted to her in school about the political process so she could feel more engaged. The 28-year-old feels voter education would have been particularly important for prospective voters like her who were about to graduate from high school.

“We’re left out of so much,” Ford says of her community. “We don’t have access to so many things.”

That’s part of the reason why, in her early 20s, Ford felt called upon to open Jazzy Sweeties in the middle of Walnut Hills. “There are schools in this area. I want to be seen—I want people that look like me to know that we can do this. So I wanted to make sure I made history and opened it up.”

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[Image: Capital & Main]
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