Kimberly Jorasan, a 32-year-old businesswoman from Atlanta, has never voted for a Republican presidential candidate. That may be about to change.
Her company, Villie, is an online platform where new parents can share photos and updates about their babies with friends and relatives, as well as register gifts such as strollers and playpens. Her company isn't profitable yet, but it needs capital to grow. But venture capitalists struggle with her unconventional profile, she says. In places like Silicon Valley and Austin, Texas, technology is dominated by white men. She is a black woman living in Georgia.
The bank wants to charge her an interest rate as high as 14 percent for a business loan. The interest rate on the credit card she used to start her company shot up to 25%, making her monthly payment three times hers.
Mr. Jorasan knows that the cost of borrowing is determined by the Federal Reserve. She doesn't criticize President Biden. But she believes her Republican opponent, former President Donald J. Trump, is more attuned to the needs of business owners. So she is seriously considering voting for him.
“For the first time in my life, the ball was in the air,” she said. “I haven't made a decision yet.”
Despite signs of economic vitality, rising borrowing costs are a source of fiscal instability, especially in Georgia, one of six swing states expected to determine the outcome of the 2024 presidential election. may become extremely important.
Black voters are an important bloc in Georgia. Four years ago, they made up 27 percent of the electorate. By many indications, Black Americans are disproportionately affected by rising interest rates on mortgages, credit cards, student loans, and business debt. Start-up businesses owned by people of color, especially Black Americans, face significant barriers to financing, according to a Federal Reserve survey of minority-owned small businesses. They have become more vulnerable to rising borrowing costs. Although their companies are typically smaller and less profitable, black and Hispanic entrepreneurs are more likely to have their loan applications rejected, even accounting for differences in credit ratings, demonstrating that racial profiling is a problem. Suggests.
“It's hard for people like me to raise money,” says Veronica Woodruff, founder of Travelsist, an Atlanta company that pairs travelers who need help navigating airports with support for companions. . “I'm an Afro-Latina woman and I live in the South. It just makes it harder to get in front of the person writing the check.”
Woodruff, 40, has already raised $1.1 million, including a $250,000 grant from the Fearless Fund, a nonprofit that addresses the lack of capital for businesses run by women of color. include. The organization has been hobbled by lawsuits from activist groups that say directing funds to minority women constitutes racial discrimination.
Woodruff is seeking an additional $8 million in investment to expand the business. Her rising costs have forced her to raise her hourly rate from her $15 to her $20. Venture capitalists are demanding more lenient terms for their investments.
She grew up in California and considers herself a liberal who values civil rights. But as a corporate supervisor, she has a hard time deciding how to vote.
“I'm taking a lot of risks here,” Woodruff said. “This is for everyone, all of my employees and everyone who has a stake in this company and the communities in which we operate.”
The importance of the black vote in Georgia cannot be overstated. From 2000 to 2019, the number of eligible voters in the state increased by 1.9 million people, nearly half of whom were black, according to a Pew Research Center analysis.
Biden won 88% of the black vote in Georgia in 2020 and is expected to win the state by a large margin again this year. But in a state that was decided four years ago by fewer than 12,000 votes, even a slight drop in support could have a decisive impact.
Vice President Kamala Harris visited Atlanta on Monday to kick off an economic tour of battleground states, highlighting her administration's efforts to support Black business owners and entrepreneurs and close the racial wealth gap.
A recent poll by The New York Times and Siena College found Trump was the candidate of choice for 16% of black voters nationwide. The same poll found that 81% of black voters rate the economy as “fair” or “poor.”
Key indicators show that Georgia's economic situation is strong. The unemployment rate in March was 3.1%, lower than the national level of 3.8%. Inflation is coming down from its highs. Atlanta has grown jobs by becoming a filming location for Hollywood movies and attracting multinational companies to headquarter there.
North-west of the city, South Korean car giant Hyundai is partnering with another company, SK On, to build a $5 billion electric vehicle battery factory. A $2.3 billion solar panel factory by another South Korean company, Hanwha Q CELLS, is planned nearby. And the number of food processing factories is rapidly increasing in the state.
“We're launching a lot of new projects and setting new records,” said Jeffrey M. Humphries, an economist at the University of Georgia's Terry School of Business. “They all build on each other.”
The state's Savannah Coast is undergoing an expansion of what is already one of the country's largest container shipping ports. Cargo diverted from the Port of Baltimore is arriving at the docks after a container ship collided with the city's main bridge, causing the bridge to collapse and halting cargo traffic.
However, the impact of higher borrowing costs is not directly reflected in official indicators of inflation, and increased debt servicing tends to undermine the benefits of economic growth.
A recent paper by economists at Harvard University and the International Monetary Fund found that rising payments on mortgages, credit cards, and other forms of debt are at odds with experts' optimistic economic assessments and the public's pessimistic outlook. We conclude that this mainly explains the gap between
“Everyone feels like they're stagnant or struggling,” said John Lawson, who sells hip-hop shoelaces online and coaches small businesses in the Atlanta area. talk. “The cost of living has gone up. Everyone has a job and is busy working at the same time.”
Black Americans typically suffer from unemployment rates that are twice as high as white Americans. The gap is even wider in Georgia, where the black unemployment rate reached 5.7% at the end of last year, compared with 2.2% for whites, according to an analysis of federal data by the Economic Policy Institute.
Some of this increase appears to reflect how Black-owned businesses have responded to higher borrowing costs, including a slowdown in hiring and reduced work hours, according to a report from the Georgia Budget Policy Institute. This includes shortening the number of employees and reducing personnel.
Many black entrepreneurs flock to Atlanta. Atlanta is a city where Black Americans are significantly represented in business, government, and culture. But local entrepreneurs say Atlanta startups typically struggle to secure sufficient funding.
Charles Wright, CEO of Mechanized AI, a startup that is developing robots equipped with artificial intelligence, said, “Silicon Valley-type people have so much capital that they can't do anything stupid.'' They will also invest in ideas.” Venture capitalists in the Southeast are more conservative, he added. “They don't believe in fairy tales.”
Wright sold the data management company he started for $22 million in 2018, so he has plenty of cash for his next venture. He drives a red electric Porsche, one of four parked in front of his home in Stone Mountain. A leafy, mostly black suburb bordered by a park that is a timeless monument to the Confederacy. He exudes his belief that mechanized AI is on the verge of reaching multi-billion dollar value.
“I'm sitting on what I know is going to be a unicorn,” he said. “What we're doing is unprecedented.”
He also believes black voters will faithfully, if not enthusiastically, vote for Biden. He credits the Trump administration with restoring stability to the economy after the turmoil.
It may prove so. But conversations with Black entrepreneurs in Atlanta reveal an overall sense of uncertainty.
Immediately after pandemic restrictions were lifted, Omar Wilby saw a huge spike in business at his nightclub in East Atlanta Village, a neighborhood of bars and music venues.
“Everyone was tired of being at home,” Wilby said. People had money in their pockets thanks to pandemic relief programs established under President Trump.
But last year, as interest rates soared and the prices of gas, groceries and rent rose, business at Mr. Wilby's club, iLounge Atlanta, fell by a third.
In response, he is slowing development of Sound Capsul, a technology business that streams music shows online and allows independent artists to upload and share their music.
“We have had to scale back our growth strategy,” Wilby said.
Ray Woods, 34, a real estate entrepreneur in the Atlanta area, analyzes the election as a choice between a Republican Party that doesn't value black voters and a Democratic Party that takes black voters for granted.
He twice voted for Barack Obama as president and praises Denmark for its high taxes that fund a comprehensive and generous social safety net. He supported the candidacy of Sen. Bernie Sanders, a self-described democratic socialist, in the 2016 Democratic presidential primary, and then voted for Trump in the general election.
Woods plans to vote for Trump again, believing he is the best way to advance business interests.
“America is built on capitalism,” he said. “You need someone who understands business.”
