When Congress passed the $1.9 trillion American Rescue Plan last year, some of that money went to support Black-owned businesses.
But how much do federal programs like this tangibly help close the racial wealth gap and address systemic injustice in this country?
McDonald’s serves as an interesting case study.
After the civil rights movement, the fast-food chain worked with the federal government to encourage Black citizens to own McDonald’s franchises in their communities. Historian Marcia Chatelain uncovers how this played out in her Pulitzer Prize-winning book, “Franchise: The Golden Arches in Black America.”
The assassination of Martin Luther King Jr. sparked calls to promote Black capitalism, Chatelain says. McDonald’s led the charge by recruiting Black franchise owners in predominantly Black neighborhoods.
“When we think about all of the visible signs of King’s legacy … it’s one of those initiatives that has actually lasted longer than some of the more important goals of the period: fair housing, equalization of access to schools, the end of police brutality,” she says. “We didn’t see that, but what we did see was a corporation aligning itself with this idea of Black capitalism and being very successful at it.”
But this flawed idea came with a price, Chatelain says.
Black franchise owners were forced to inherit McDonald’s stores that white owners didn’t want anymore in neighborhoods that they didn’t want to do business in, she says. These stores often had property damage and broken equipment, which meant the cost of operating McDonald’s stores was much higher for many Black franchise owners.
These problems persist to this day. Shortly after Chatelain’s book was published, a group of Black franchise owners sued McDonald’s claiming that the company redlined them into only low-income, Black neighborhoods.
“I think that it’s a real reminder about the limits of this kind of wealth building to try to mediate racial injustice because a lot of people did become very wealthy and very successful as a result of franchising, but it all comes at a cost,” Chatelain says. “And so I think it reminds us that we have to be really vigilant when policy solutions are only geared towards wealth building or business.