Loretta Harrison is a born hustler. "I been making and selling things since I was about 8 years old," says the 45-year-old, unemployed mom. She buys wholesale in Manhattan — balloons, socks, scarves, you name it — then loads up a pushcart and sells at retail prices on the streets of Jamaica, Queens. She's peddled Icees off the back of a tricycle, teamed up with her teenage son to hawk bottled water for $1 at stoplights, and organized "passion parties," where she brings together groups of women to gab about sex and buy erotic toys. "I love sales," she gushes. "For me to have something that somebody else wants and for them to go in their pocket and bring out hard-earned money to get what I have is just — it's like a high to me!"
Harrison can think of only one hustle that didn't work: selling hot dogs. Not that the fundamentals were wrong, she insists. She set up her stand in a gas-station parking lot, across from the bus stop on the large boulevard by her house. For a week, she made good money, selling dogs and buns she bought wholesale at Costco. Problem is, vending licenses of any kind are hard to come by in New York City, and the cops take violations seriously. So they ran her off after just a week. She lost $700 on a hot-dog cart she'd bought out of the classifieds. "It was gonna work," she grouses, still mad 10 years later. "If they'd left me alone, I could have been making my money."
Harrison hasn't worked a traditional, full-time job in nearly 14 years, since her eldest son, Malcolm, had a series of seizures in the second grade that resulted in brain damage. "After that, you know, he was a paranoid schizophrenic," she says. "He'd think he didn't have enough sugar in his cereal, and he'd run away and tell people we were bothering him. Punch out the windows and stuff." So she quit her job delivering mail in the neighborhood to take care of him and her then-newborn daughter. "That whole year, my Ready Teddy bags were the only thing that kept me going."
Ready Teddy is Harrison's pride and joy. It's a crocheted teddy bear and tote combo that she's been making since 1992. In the past, she's sold the bags in a Brooklyn craft store for $35 a pop but now moves them herself for $20. "When I had people selling for me, I would charge them $15. They'd sell it for $20 and take out five," she explains, rattling off pricing and staffing schemes that have never been written down, let alone put into a business plan.
In fact, Harrison can't so much as give a ball-park estimate of how much money she's made or lost year to year on all of her little businesses. She figures that between her sales and her wage jobs, her income has probably peaked at $25,000 in a year. "As far as keeping records and whatnot — Loretta's not so good at keeping records," she jokes. "Especially when you get the money and you end up having to spend the money to live."
Whether and how Harrison can actually live off of her sales schemes are larger questions than she knows — and ones that may be getting more attention in coming years, as policy-makers grope for solutions to the joblessness that's strangling cities. Every month brings a new low in the downward spiral that Wall Street's follies set in motion. Unemployment was at 10 percent at the end of 2009. More families went hungry in 2008 than at any time on record — an estimated 17 million households — and the poverty rate reached higher than it's been in more than a decade.
The conventional debate over how to help families that find themselves counted among those doleful statistics focuses on the social safety net — do we boost supports like welfare, provide low-skill job training, or just force folks to try harder to find work? The assumption lurking behind all of these answers is that poor people are broken and need to be fixed, or at least propped up. But a rarely noticed industry of small-business advocates and lenders say the problem is the other way around. What we need, they argue, is an economy that values the remarkable entrepreneurial instincts that people like Harrison already have. And their research suggests that with relatively small investments for training and with loans of as little as $500, small, side hustles like Harrison's could get neighborhoods like Jamaica churning with enterprise.
Microenterprise, as it's called, has long been associated with the developing world. The Grameen Foundation's Muhammad Yunus pioneered the idea back in 1976, with a $27 loan to a group of Bangladeshi businesswomen, following a famine. A global industry has since parceled out billions of dollars in microloans, and Yunus has won both a Nobel Peace Prize and a Presidential Medal of Freedom. But while the idea owes its fame to the developing world, it has also been slowly building in America since the mid-1980s — it's just been ignored by an economic and political culture obsessed with the pursuit of large, rapid growth.
Now, with the U.S. economy in disarray, domestic microenterprise advocates believe this is finally their moment in the sun. International microlenders are slowly turning their attention to the United States — both Grameen and the celebrated peer-to-peer lending tool Kiva.org have announced new U.S. ventures since the recession began. And after years of hostility from Bush-era Washington, microenterprise development has won the support of both the Obama administration and the Democratic Congress.
"Folks are working really, really hard to catch up with the growing demand that came about because of the downturn," says microenterprise veteran Michelle Levy-Benitez, a consultant for the Corporation for Enterprise Development and former policy director of the trade group Association for Enterprise Opportunity. The effort is thus far relatively tiny: AEO estimates $100 million to $150 million is invested in U.S. microenterprise development annually. But industry researchers argue Harrison is among an estimated 10 million low- to moderate-income people who could turn their ideas and hustles into thriving, job-creating businesses — and rescue inner-city economies in the process.
The oft-overlooked fact about our current "jobless recovery" is that in working-class black and brown neighborhoods, the 2001 recession never ended. Black unemployment has never dropped back to the 7.6 percent rate of 2001. Construction jobs during the building boom helped bring Hispanic unemployment to historic lows, but it has since shot back up to 13.1 percent. In late 2009, Harrison was among nearly 16 percent of black Americans who were out of work.
Those numbers look even worse when you consider the people who are underemployed, meaning they're working part time despite needing a full-time job. About a quarter of blacks (23.8 percent) and Hispanics (25.1 percent) were underemployed in September 2009, according to the Economic Policy Institute. This also helps explain why a quarter of black America lives below the poverty line.