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Wanted: More Black Entrepreneurs

Startups are seen as key to halting erosion of the middle class

As a young black man graduating from the College of the Holy Cross 40 years ago, Ted Wells felt his generation had reason to hope racial barriers to economic advancement would disappear. In many ways he was right. Wells went on to earn both an MBA and a law degree from Harvard before becoming one of the country’s top trial lawyers. His Holy Cross hallmates included Pulitzer Prize-winning author Edward P. Jones and Supreme Court Justice Clarence Thomas. American Express chief Kenneth Chenault and Ken Frazier of Merck are law school friends; his wife, Nina, served as New Jersey’s secretary of state. Yet Wells now sees an economy where obstacles to a middle-class life for many black families are still daunting. “This recession has had a terrible hit, especially on the middle and lower class,” says Wells, now a partner at Paul, Weiss, Rifkind, Wharton & Garrison in New York. “But we’re less willing to talk about economic problems as issues of race.”

Job cuts in the debt-strapped public sector, where one in five black workers is employed, have had an outsize impact on the African American community. Labor Dept. data show some 280,000 public employee positions were cut last year, even as the overall economy added 1.64 million jobs. Black unemployment increased to 15.8 percent in December, more than twice the level for whites. So black business leaders are shifting focus to addressing issues in the small business sector, where most new jobs are created and African Americans haven’t fared well.