Study shows Bellingham owns one of the worst ratios of minority-owned businesses in nation
With approximately 6% of businesses in the Bellingham metropolitan area minority-owned, the city has the lowest rate of minority business ownership among metro areas in Washington state and one of the lowest rates in the nation, a recent study found.
Financial advice website Smartest Dollar recently researched how many businesses within the U.S. are owned by racial and ethnic minorities after the 2020 U.S. Decennial Census showed America’s nonwhite population is continuing to grow. On Thursday, March 17, it released its findings.
The study found that over the past decade minority businesses have accounted for more than 50% of new businesses created in the U.S. and have combined to create 4.7 million jobs. But only 19% of businesses are owned by people identifying as a race or ethnicity other than non-Hispanic white.
“Minorities have a more difficult time obtaining capital from external investors or lenders, which limits their ability to start and grow businesses,” the Smartest Dollar report states. “Minority owners are also less likely to have access to mentors and professional networks that can advise them effectively on business decisions.”
The report further broke down its look at minority-owned businesses to the state and metropolitan levels and compared them to each region’s racial and ethnic population numbers.
Though Washington had the 12th highest ratio of minority-owned businesses compared to its minority population, Bellingham had the worst rate among 10 metro areas measured in the state and one of the worst ratios in the country among cities with populations of at least 100,000 people.
Bellingham ranked in the bottom 10 small metro areas (population of 100,000 to 349,999) in the nation, checking in at No. 31 out of 40 that were ranked. That also placed it near the bottom (126th overall) of all 146 metro areas that were ranked.
To produce the rankings, Smartest Dollar says it sourced the U.S. Census Bureau’s Annual Business Survey and American Community Survey. It then calculated the ratio of minority-owned businesses within metro areas compared to the overall population in the area that identified as anything other than non-Hispanic white.
Researchers also calculated the percentage of total employment at minority businesses and the percentage of payroll at minority businesses.
Honolulu, Hawaii, had the best ratio of minority-owned business to minority population at 0.71, while Rapid City, South Dakota, had the worst ratio at 0.12 among the 146 ranked metro areas.
The study found Bellingham’s ratio of minority-owned businesses to its minority population was 0.28, with 6.1% of businesses in the area being minority-owned compared to 21.9% of the population in the area identifying as a race or ethnicity other than non-Hispanic white alone.
The research also found that 2.1% of all employment in Bellingham is at minority-owned businesses, while those businesses make up 1.2% of the payroll in the area.
For comparison, the Mount Vernon/Anacortes metro area ranked 15th nationally among small metro areas with a ratio of 0.39. The Skagit County region has 9.3% of its total employment at minority-owned businesses accounting for 5.5% of the total payroll.
The Portland, Oregon/Vancouver, Washington, metro area was the top metro area in the state with a ratio of 0.48, while Seattle/Tacoma checked in only a fraction lower and was 24th overall nationally.
The Yakima metro area was only one spot better than Bellingham at 125th among all ranked metro areas in the nation and its ratio was only a fraction better.
Washington state, as a whole, had a ratio of 0.47, which matched the national ratio of minority-owned businesses compared to the minority population.
The study found that 15.2% of businesses in Washington are minority-owned, compared to 32.7% of the total state population identifying as a race or ethnicity other than non-Hispanic white alone. Minority-owned businesses in the state accounted for 6.2% of employment and 3.8% of payroll.
Nationally, the study found that minority-owned businesses are responsible for 7.3% of the employment and 4.8% of the payroll.
“The ratio of minority-owned businesses and minority population varies across the country,” Smartest Dollar said in the report. “It appears that minority population by itself is not a strong indicator of minority business activity.”
The report went on to say that it found immigration and education appeared to be two factors that affected ratios across different locations, with areas of the country that have higher immigrant populations, such as Florida, California and New York, likely to see more minority-owned businesses. Likewise, states where nonwhite, non-Hispanic people have higher average rates of educational attainment, such as Virginia and Maryland, also saw higher minority entrepreneurship, the report states.
Whatcom County grew by 25,707 people (13% overall) between the 2010 and 2020 Decennial Census counts, and as previously reported by The Bellingham Herald, 78% of that growth was among people who identified as a race or ethnicity other than non-Hispanic white alone.
Of the 226,847 people in Whatcom County, 50,901 people (22%) identified as a race or ethnicity other than white alone, according to the 2020 Decennial Census. That was up from the 29,324 people (14.6% of 201,140 total population) that identified as a race or ethnicity other than white alone in the 2010 Decennial Census.
