Chicago minority business creating surge in job growth

Michael Hume, owner of Caribbean American Bakery

By Yinmeng Liu

The doorbell rang as customers buried under woolly overcoats shuffled in.  Chicago’s chilly February air swept into the bakery with them, instantly diluted by the warm smells of sweet potato pudding and fresh-baked hardough breads. Michael Hume regarded the newcomers quietly through thin silver spectacles. He is an American-born Jamaican of medium built with a gentle smile.

Hume owns The Caribbean American Bakery, a quaint and homey place on West Howard Street that sells Jamaican style baked products to retailers and the wholesale market. His father started the business in 1982 when no Jamaican bakery existed in Rogers Park. Over the years, Hume established a solid customer base in the neighborhood.

Michael Hume makes Jamaican delicacies at his Caribbean American Bakery.  (Yinmeng Liu/Medill)
Michael Hume makes Jamaican delicacies at his Caribbean American Bakery. (Yinmeng Liu/Medill)

“At present a lot of the food I make goes to the South Side. So will I be better off going to the South Side? Maybe, but I don’t know. I am comfortable here in Rogers Park, simply because it’s established and a lot of people know where it is,” Hume said.

Hume’s bakery employs six people, and is a minority-owned business. In business circles, minority-owned business means an individual belonging to a minority group owns at least 51 percent of a business.

Abebayo A. Afolabi takes his order from Khadi Jah, an employee at the Caribbean American Bakery in Rogers Park, IL. Afolabi says he is a regular at the bakery and his favorite item of the menu is the sliced Jamaican hardough bread.
Abebayo A. Afolabi takes his changes from Khadi Jah, an employee at the Caribbean American Bakery in Rogers Park, IL. Afolabi  is a regular at the bakery and says his favorite item on the menu is the sliced Jamaican hardough bread.

The increasing number of minority-owned businesses in Chicago has led to a 16.7 percent spike in job creation in this sector  and a 13.3 percent jump in job retentions from 2012 to 2013, according to data from the Chicago chapter of The Minority Business Development Agency.

“We used to help a lot of businesses, which have became big corporations” that generated business and jobs for smaller minority enterprises, said Hans W. Bonner, the executive director of Chicago MBDA, referring to the growth of older clients.

The U.S. Census Bureau counted 5.8 million minority-owned enterprises for 2007 in America, a 46 percent increase over the 4.0 million operating in 2002. The growth in minority business dramatically outpaced the 17.9 percent increase in all U.S. businesses during the same period. The U.S. Census Bureau conducts the survey of business owners every five year. The latest data, collected in 2012, is scheduled for release starting in this June.

The number of minority-owned firms in the U.S. is still expanding, according to MBDA, a federal agency financed by the U.S. Department of Commerce that connects companies to grants and contracts and also provides consulting services to minority business enterprise.

“In FY 2013, our Agency’s performance has led to the creation and retention of over 25,000 American jobs. These results build on the amazing accomplishments of FY 2009-12 and represent the highest performance in MBDA’s 44 year history,” wrote Alejandra Y. Castillo, director of MBDA national, in the 2013 Annual Performance Report.

Compared to fiscal year 2012, jobs created and retained by MBDA members nationally in 2013 increased by 8,982. If MBDA’s performance in 2013 is compared to a running race, then Chicago is probably the fastest runner among the organization’s 44 national business centers.

Chicago MBDA’s FY 2013 Performance at a Glance Chart shows that the total number of jobs created and retained by the clients in the agency reached 5,471 in 2013,  adding 1,381 new jobs over the previous year.

Bonner attributed the spike in the job creation reported by the Chicago MBDA in 2013 mainly to the development of large minority-owned corporations in the region and the career opportunities these successful clients have fostered as they grow.

In addition, Bonner said the number of clients in the organization has been increasing steadily as well.

“We see new clients every year and we stop seeing others,” said Bonner, “but in general, yes our client base has grown.”

An organization Bonner said contributed significantly to the job creation was Flying Food Group LLC, a Chicago-based minority business that caters food for airlines and retail brands. The company has generated 2,000 jobs alone in 2013.

Sue Gin, who was born to Chinese immigrants in Aurora, founded Flying Food Group in 1983. Gin passed away last year at age 73. She grew her company to the No. 2 spot on Crain’s list of Chicago’s biggest minority-owned from 2011 to 2013. It was one of the top five businesses for a decade before that.

Bill Morton, president of Rogers Park Chamber of Commerce, said he has witnessed a consistent increase in minority businesses in his district since he started the organization to represent and connect business owners in the Rogers Park community.

“We formed the Chamber of Commerce on April 14, 2009, and we noticed the increase since we did the original survey,” said Morton.

Hume said he feels the business environment of his neighborhood has became more diverse and that the recession of 2009 was a factor in driving people to pursue entrepreneurship as a more secure way of earning money.

“It’s probably the situation where the economy has gotten so people have lost their job, so they need something to do,” Hume said.

By contrast, Nav Singh, whose family started Sonia Selections on West Devon Avenue in 2001, said he believes the number of minority-owned businesses in his neighborhood decreased in 2013. His shop specializes in fabric and accessories.

A female mannequin wearing beaded sari strikes a pose at Sonia Selections
A female mannequin wearing beaded sari strikes a pose at Sonia Selections in Rogers Park, Chicago.

“It really depends on the area,” Singh said. “We’ve been here for a lot of years now. I don’t know any store that would open up [now]. I can only think of one store that was opened this year, and I can think of two or three stores that had shut down.”

Sari-draped mannequins pose in the front of the trendy Indian boutique owned by Singh and his family. Inside, one will find glistening bangles, earrings, and rolls of fabrics in a rainbow of shades and textures.

Singh said the recession has slowed the sales at many stores around his neighborhood and that many businesses have resorted to selling things online. But the merchandise the store carries saves his family.

“The main reason we are surviving is because of our fabric,” Singh said. “Most people in this area here are looking for ready-made clothing, which they can find anywhere online. But the fabrics, they are pretty unique. We have more diverse customers because anyone would buy fabrics.”

Ready-made clothes and fabrics share a corner at Sonia Selections. Owner Nav Singh said nearly 70 percent of the customers in his store are non-Indians.
Ready-made clothes and fabrics share a corner at Sonia Selections  in Rogers Park. Owner Nav Singh said the fabrics attract a diverse group of buyers and nearly 70 percent of the customers in his store are non-Indians.

In 2013, MBDA added seven new member centers in Baltimore, Maryland; Bridgeport, Connecticut; Bronx, New York; Houston, Texas; San Francisco, California; St. Louis, Missouri; and Washington, DC, to its roster. Bonner said he believes the incorporation of these new centers also helped to account for more minority businesses that were not included in the data before 2013.

As part of MBDA’s operational change in 2013, Chicago received a portion of the $1.425 million in supplemental investment funds that the national agency awarded to nine business centers to expand their services, in addition to another grant the Chicago center already shares with Detroit’s business center.

Bonner said Chicago MBDA was one of the biggest centers when the national agency formed. “We are the largest center in terms of funding,” Bonner added.

In addition to the contracts and funding the MBDA provides, minority business owners in Chicago have access to many other resources. Some examples include nonprofit organizations such as Chicago Minority Supplier Development Council and Illinois Hispanic Chamber of Commerce, the two organizations that run Chicago MBDA together.

The organization helps “creates wealth, job and economic growth in the district” through leveraging business opportunities for minority firms,  said Philip Barreda, executive vice president of the Chicago MSDC.

The City of Chicago Department of Procurement Services offers certifications to business that are owned by minorities or women. The certifications allow businesses to be contracted by government agencies and some private agencies.

“It’s all about knowing what your resources are, but a lot of people don’t,” Morton said.

Hume said he didn’t know about MBDA before but he would usually go to Rogers Parks Business Alliance if he wanted to promote his shop.

“Most of the businesses in Rogers Parks are more familiar with the local business alliance,” said Hume.

“I am doing well, I don’t need any help,” said Fawzi Saleiman, A Palestinian immigrant who has owned Farm Supermarket, a grocery on West Devon Avenue, for 30 years.

Singh said he was very young when his family opened Sonia Selections but he doesn’t recall his parents trying to obtain funding from nonprofit organizations.

Hume said he doesn’t see any advantage in applying for certification when he sells most of his products in his store to individual customers  or to Jamaican restaurants .

“Minority-certified, in my opinion, is when you are making a lot of stuffs and you are going to sell to some other organizations like maybe the city, then I can see that yeah it’s a minority business and we are going to support that,” Hume said. “But I don’t really sell to the city. In my opinion, that’s where it became the advantage of being labeled a minority-owned business.”

Photo at top: Michael Hume bakes Jamaican delicacies at his Caribbean American Bakery in Rogers Park.