Black-owned businesses will have problems expanding this year because of a slump in the general economy, said Theodore R. Hagans Jr., president of the National Business League, which represents minority businesses.
"Measured by almost any traditional standard, 1981 has been an unusually volatile year for the U.S. economy, and an unencouraging period for blacks and other minorities engaged in business enterprise," Hagans said in his annual minority business outlook. "The poor performance of our nation's economy is certain to present substantial obstacles to black business expansion in 1982."
Hagans blamed high interest and inflation rates last year for "the steady rise in unemployment and an alarming rate of small business failures. The net effect of such conditions has stifled business growth and dashed the hopes of increased consumer spending."
For a full economic recovery to take place, the success of black and minority businesses must be made a priority of the Reagan administration, Hagans said. "Without the inclusion of blacks on the national economic agenda, this nation cannot achieve its fullest economic potential nor hope to succeed on its journey to economic recovery," Hagans said.
The group's president, however, agreed with the Reagan administration's policies of balancing the federal budget, controlling inflation and stimulating economic growth. But while those policies may improve the economy in the long run, Hagans said, "the benefits in the short term are decidedly mixed because the nation will experience a widening recession and spreading unemployment.
"In fact, such policies will place a devastating burden on those segments of our society already ravaged by inflation, high prices and joblessness," Hagans continued. "It is clear that our national economy cannot be turned around at the expense of the poor, the elderly, the young and the disabled. Rather our leaders must seek more equitable budget adjustments."