Silent Victims of Civil Unrest

Most of the media coverage of last month’s civil unrest in Ferguson, Missouri focused on the legal issues leading to the protests and rioting after a grand jury decided not to indite a white police officer who shot a black man. What the media did not spend much time reporting was the massive loss of property for small business owners caused by the riots.

Devastating Effects

In the aftermath of the November 24 ruling, 12 businesses were burned to the ground. It was reported that the windows of almost every storefront where the incident took place had been smashed. Other nearby businesses were looted in the subsequent nights. No estimate of the total damage done has been reported. Insurance will help pay for some of the damage for some businesses, but not all.

Possibly more devastating for the community are the long-term consequences for businesses deciding whether or not to rebuild. The area was already suffering from the rioting last summer after the shooting occurred. Business owners reported as much as an 80% decrease in sales since the August unrest.

Entrepreneurs know there is risk involved in starting a business. The term entrepreneur is defined as someone who takes risks. But it would be difficult for any entrepreneur to imagine that such massive property damage could occur to their businesses in an American city. There is little the owners of these businesses could do to anticipate or stop the damage while police and National Guard stood by and watched.

Business owners in the area had been told not to worry about a repeat of the August rioting. Jay Kanzler is the attorney for four owners whose businesses were burned down. "We were told in meetings by the Justice Department and through other people that there was a plan, that we would not be abandoned this time, that people would not be able to destroy property," Kanzler said.

Kaye Mershon owns a barbershop in the area. On the night of the grand jury announcement, someone threw a Molotov cocktail into the shop. Some of her customers put the fire out. "We were all told that policing was going to take place," Mershon said. "But when I arrived, they were standing out here. No one was doing anything; they weren’t policing."

For those who invested their time, money and effort into running a business, it is easy to understand why they might give up and move somewhere else.

“I feel scared about my business,” stated Rokhaya Biteye, owner of Daba African Hair Braiding in Ferguson. She said profits have been reduced to almost nothing since the shooting in August. “I don’t think it will work anymore,” she said. She has no insurance.

Ferguson is not the only place where economies have been affected in the long term. In the 10 years after the 1992 Los Angeles riots, the city lost nearly $4 billion in sales, according to research conducted by Victor Matheson of College of the Holy Cross and Robert Baade of Lake Forest College.

“Social unrest can have a lasting negative impact on a local economy in a way that’s much more persistent than even a natural disaster,” Matheson stated.

One group of small business owners in Ferguson took the situation into their own hands after the grand jury ruling. Owners of a tattoo parlor and gun shop in a strip mall 10 minutes north of where most of the property was destroyed armed themselves and spent the next several nights protecting their property. 

“We didn’t want them coming in here and then running around with a bunch of free guns,” said Adam Weinstein, owner of County Guns in Ferguson. “Police officers are wonderful people to have around, but they can’t be everywhere. In the end, you are your own first responder and the provider of your own self-defense.”

Ripple Effects

While these are dramatic examples of how businesses in Ferguson were affected, there are also less obvious ripple effects. Protests around the country in the days after the grand jury decision shut down roads, including major interstates.

The Shoreway in downtown Cleveland was stopped briefly the day after the decision. While the local media was trumpeting this non-violent protest, there was probably a number of small business people stuck in that traffic trying to make a delivery or going to see a client or just trying to get home. These entrepreneurs had nothing to do with the events in Missouri.

Nobody makes an entrepreneur start a business and take on the associated risks. However, it seems reasonable for entrepreneurs who pay taxes and provide jobs to expect some level of protection from the government from  abhorrent behavior. Of course these entrepreneurs are not going to organize a protest…they are too busy running their businesses!

Perry Haan

Dr. Perry Haan is Professor of Marketing and Entrepreneurship, and former Dean of the Business School at Tiffin University. He resides in Rocky River and can be reached at 419-618-2867 or haanpc@tiffin.edu.

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Volume 2, Issue 6, Posted 2:39 PM, 12.12.2014