Pennsylvania has unveiled a new race-based business grant and assistance initiative to support enterprises in “historically disadvantaged communities.”
The grants are defined by factors such as race, economic status, and cultural background.
The program, however, has sparked debate.
Critics are raising concerns about potential discrimination similar to legal challenges faced by other programs of its kind.
The initiative, managed by Pennsylvania’s Department of Community and Economic Development (DCED), is part of Governor Josh Shapiro’s 2024-2025 budget.
Pennsylvania launches a government assistance program that prefers to only help race based or “historically disadvantaged businesses.”pic.twitter.com/rGpml2UtwX
— Resist Times (@resistupdates) December 18, 2024
It aims to provide resources to small businesses that have faced barriers to economic opportunity.
These include minority-owned businesses through the Historically Disadvantaged Business Assistance Program.
The program includes funding to establish and support business assistance service centers and microgrant programs.
These funds are intended to help historically disadvantaged businesses cover costs associated with starting or expanding their operations.
Barãta Bay, president of the African American Chamber of Commerce of Western Pennsylvania, expressed optimism about the program’s potential impact.
He described it as having a positive “ripple effect” across the state, particularly in fostering growth and sustainability for minority-owned businesses.
The program’s website defines a “historically disadvantaged business” as a for-profit enterprise owned or controlled by one or more socially or economically disadvantaged individuals residing in Pennsylvania.
The criteria specifically mention groups such as African Americans, Hispanic Americans, Asian Americans, and Native Americans, but also leave room for other individuals whose disadvantage arises from chronic economic circumstances or similar factors.
While advocates like Bay emphasize the importance of addressing systemic inequities, critics argue that such programs could inadvertently create new disparities.
Frank Gamrat, executive director of the Allegheny Institute for Public Policy, acknowledged the importance of fostering small business growth but expressed concerns about the state’s track record in managing similar initiatives.
“This program feels like the state is picking winners and losers again,” Gamrat told The Center Square.
“The state has a horrible record when it comes to that.”
Gamrat suggested Pennsylvania should focus on eliminating regulatory barriers that stifle entrepreneurship rather than selectively distributing funds. “Let’s look at those [barriers] and start knocking them down,” he said. “I don’t disagree with the sentiment, but let’s cut the red tape.”
Governor Shapiro’s plan also includes designating eligible minority organizations, such as educational institutions and nonprofit community groups, to serve as technical assistance centers.
These centers would distribute microgrants to individuals aiming to start or expand businesses.
Gamrat, however, opposes this approach. He argued that empowering these organizations might not effectively address the broader challenges faced by small businesses across the state.
