New York might be wooing tech entrepreneurs, but few of the entrepreneurs starting businesses in New York are low-income residents.
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According to a new study released today by the Center for an Urban Future, few low-income, non-immigrant New Yorkers are becoming entrepreneurs, even as New York business booms in places like “Silicon Alley.”
The self-employment rates are lowest in poor neighborhoods with a lot of native-born residents.
The 18 neighborhoods with the lowest rates have a median income of $25,150, according to the report. These areas include East New York and Brownsville in Brooklyn and Throgs Neck in the Bronx.
And the number of entrepreneurs in Manhattan is close to the total in all the other four boroughs – in Manhattan, 97,000 native-born people are self-employed, but in the other four boroughs combined about 124,000 are entrepreneurs.
The report notes that even though low-income residents are not starting formal businesses, “There is no lack of entrepreneurial spirit or creativity among the native-born poor.”
Many start informal jobs like selling cakes out of kitchens, cutting hair in an apartment or hosting a day care.
“People are always looking for a side-hustle because people need to patch income,” said Catherine Barnett, executive director of Project Enterprise, a group that helps small businesses. “That’s the reality. That’s not going away anytime soon.”
If they had more support, they might be able to formalize these businesses, the report suggests.
“There is an opportunity to do something in the Harlems and the Bed-Stuys and those other communities,” added Sheena Wright, the CEO of United Way of New York City.