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COVID-19 Pandemic Extremely Affected Black Business Owners
The COVID-19 pandemic has affected many small businesses. Although, early evidence shows that the crisis has extremely hurt black business owners.
Robert Fairlie, an economics professor at the University of California in Santa Cruz, published a paper titled, “The Impact of COVID-19 on Small Business Owners: Evidence of Early-Stage Losses from the April 2020 Current Population Survey.”
The paper shows that the number of businesses owned by African Americans plunged more than 40 percent in April.
The Impact
Some very sad and depressing stats in this paper:
THE IMPACT OF COVID-19 ON SMALL BUSINESS OWNERS:
EVIDENCE OF EARLY-STAGE LOSSES FROM THE APRIL 2020 CURRENT POPULATION SURVEYhttps://t.co/aAhanM7wLW pic.twitter.com/2IJzPWKycT— Lawrence Hamtil (@lhamtil) June 15, 2020
From February to April, the number of working black business owners dropped 41 percent – from 1.1 million to 640,000. Nationally, the number of active business owners declined by 22 percent.
The findings show that white-owned businesses declined by 17 percent, or 1.8 million.
“The negative early-stage impacts on minority- and immigrant-owned businesses, if prolonged, may be problematic for broader racial inequality because of the importance of minority businesses for local job creation (disproportionately for other minorities), economic advancement, and longer-term wealth inequality,” Fairlie wrote.
It also appears that black-owned businesses benefit less from the small-business rescue program. A survey from Color of Change and UnidosUS shows that only 12 percent of black and Hispanic business owners who applied for a PPP loan received it between April 30th and May 12th.
On the contrary, a recent survey shows that half of all small businesses reported receiving money from the PPP.
“The Small Business Administration’s Paycheck Protection Program is a driver of racial inequality, rather than a means to provide desperately needed relief for the small businesses at the heart of Black and Brown communities,” said Rashad Robinson, the president of Color of Change.
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