AI & Automation: The Silent Threat to Black-Owned Businesses

In 2024, as the world stands on the brink of yet another technological revolution, Black Americans face a familiar and haunting challenge. The rise of AI and automation, which promises to transform industries, streamline processes, and create new efficiencies, is a double-edged sword. While many see this as progress, the reality for Black communities is far more dire. The industries most susceptible to this wave of automation—retail, transportation, and customer service—are precisely where Black Americans are overrepresented. Historically, these sectors have provided entry points to stable income and economic mobility for Black families. Now, with algorithms replacing cashiers, truck drivers, and call center agents, we face the grim question: where will Black workers turn for employment in a rapidly changing digital landscape?

Historical Patterns of Economic Displacement

To understand the urgency of the current moment, we must reflect on our history. The pattern is painfully clear: from the Great Depression to the COVID-19 pandemic, Black Americans have consistently suffered the worst economic impacts during times of national crisis. During the Great Depression, the unemployment rate for Black workers exceeded 50%, nearly double that of their white counterparts. Even as President Franklin D. Roosevelt’s New Deal lifted millions out of poverty, Black Americans were often excluded from its benefits. Programs like Social Security initially left out agricultural and domestic workers—industries where Black laborers were heavily concentrated. As The Chicago Defender reported in 1935, “The Negro is, as always, the last to be hired and the first to be fired.”

Following the gains of the Civil Rights Movement, the economic backlash was swift and brutal. White flight drained economic resources from cities, taking with it the manufacturing jobs that had sustained Black middle-class communities. A 1984 study by the U.S. Commission on Civil Rights revealed that Black unemployment in urban centers was as high as 20%, while the national rate hovered around 7.5%. As factories closed their doors and moved to the suburbs or overseas, Black neighborhoods were left to grapple with skyrocketing joblessness and crumbling infrastructure.

The Crack Epidemic and Mass Incarceration: Systemic Economic Devastation

The 1980s and 1990s brought another devastating chapter: the crack epidemic and mass incarceration. The introduction of crack cocaine into Black urban neighborhoods, coupled with draconian drug laws, led to a surge in incarceration rates. By 1990, the imprisonment rate for Black men had soared to 1,860 per 100,000, compared to just 289 per 100,000 for white men. This era devastated Black families, stripping away breadwinners and destabilizing entire communities. As The New York Times noted in a 1994 editorial, “The nation’s war on drugs has turned into a war on Black America.”

Economically, mass incarceration had ripple effects that extended far beyond the prison walls. With so many Black men removed from the workforce, household incomes plummeted, and the cycle of generational poverty deepened. By the early 2000s, just as the Black community began to regain some economic stability, the housing market collapse hit. Predatory lenders targeted Black homeowners with subprime loans, leading to foreclosure rates that were 76% higher than those of white homeowners. According to the Center for Responsible Lending, Black families lost over $200 billion in wealth due to foreclosures between 2008 and 2012, erasing decades of progress.

COVID-19 and the Continuing Economic Divide

Fast forward to 2020, and the COVID-19 pandemic once again laid bare the stark disparities in America’s economic landscape. Black Americans were disproportionately affected by the virus, with death rates nearly twice as high as those of white Americans. On the economic front, Black workers were among the hardest hit, with an unemployment rate that spiked to 16.8% in April 2020, compared to 14.2% for white workers. The Paycheck Protection Program (PPP), intended to provide relief to small businesses, often left Black-owned businesses in the cold. According to a report from the Harvard Business Review, 41% of Black-owned businesses permanently closed during the pandemic, compared to just 17% of white-owned businesses.

AI and Automation: The New Frontier of Economic Exclusion

Now, we stand on the threshold of yet another economic upheaval, driven by AI and automation. McKinsey's report warning that up to 35% of Black jobs could be automated by 2030 should sound alarm bells in every Black household, business, and community organization. As self-checkout kiosks replace cashiers and automated vehicles threaten to displace truck drivers, Black workers in vulnerable industries are left wondering where their next paycheck will come from. These are not just numbers on a report—they represent real families, real livelihoods, and real futures at risk.

Black-owned businesses face unique challenges as well. Many are concentrated in industries like food services, retail, and small-scale manufacturing, where automation is rapidly transforming business models. As large corporations adopt AI to streamline operations, Black small business owners may find it increasingly difficult to compete. The loss of these businesses would not only devastate the economic stability of Black neighborhoods but also strip away vital community anchors that provide social cohesion and cultural identity.

A Call to Action: Investing in Our Own Future

We cannot afford to sit idly by while another wave of economic disruption threatens to leave us behind. The time to prepare is now. Black communities must prioritize tech education and skills training if we are to compete in this digital economy. Despite making up 13% of the U.S. population, Black Americans hold only 7% of STEM jobs, according to the Brookings Institution. This underrepresentation in tech fields must be addressed if we are to close the widening economic gap.

Black entrepreneurs must also see AI not as a threat, but as an opportunity. By embracing technology, we can create new business models that are not only resilient but also scalable. Initiatives like Black Girls Code and AfroTech are leading the charge, but more investment is needed to empower Black-owned tech startups and support Black entrepreneurs in integrating AI into their operations.

Beyond education and entrepreneurship, we must leverage our collective economic power. With a combined buying power of over $1.6 trillion, Black Americans have the financial clout to drive change. Imagine the impact if we redirected just a fraction of that spending toward Black-owned tech firms, startups, and educational initiatives. We could build our own economic ecosystems, much like Isaiah Montgomery did when he founded Mound Bayou—a self-sufficient Black town in the heart of Mississippi.

A New Digital Exodus: Building Economic Liberation

The story of Black America has always been one of struggle, resilience, and reinvention. From slavery to the Civil Rights Movement, from the crack epidemic to the housing crisis, we have been knocked down time and again, yet we have always found a way to rise. But this time, survival is not enough. We must thrive. The rise of AI and automation is a wake-up call—a signal that we must build our own pathways to prosperity.

The Balance Sheet, our platform, aims to be a digital sanctuary, a space where Black entrepreneurs can thrive, where Black families can build generational wealth, and where our faith and resilience can be reclaimed. We are not waiting for permission to be part of the future; we are building it ourselves. This is our modern-day Exodus—not a march through the desert, but a journey out of economic dependency and into the promised land of self-determination.

The Time Is Now

As we face the dawn of this new technological era, we must not forget the lessons of the past. Every major economic shift in America has come at a disproportionate cost to Black communities, but it doesn’t have to be that way this time. By investing in tech education, supporting Black entrepreneurs, and leveraging our collective economic power, we can ensure that we are not merely survivors of the AI revolution but leaders in it.

Our legacyIn America is one of resilience and self-determination. It is time to honor that legacy by equipping our people to navigate this new economic frontier. The quest for place and power continues, and in this digital age, it starts with education, innovation, and collective action. Because the only way to change the game is to stop playing by their rules and start building our own.