The coronavirus pandemic will close many small businesses. And early evidence suggests that this disproportionately harms small black-owned businesses.
More than 40% of black business owners said they did not work in April, when enterprises experienced the worst economic consequences of the pandemic. Only 17% of white small business owners said the same thing, according to an analysis of government data by Robert Fairlie of the University of California, Santa Cruz.
Many small businesses experience difficulties during a pandemic because they lack easy access to credit and cannot easily transfer their business online. In black companies, as a rule, fewer workers than in other small enterprises. According to Ken Harris, president of the National Business League, an organization founded by Booker T. Washington in 1900, they are also more likely to find themselves in industries such as restaurants or retail, which have been hit hardest.
“Most lack the capabilities, scale, and technical assistance needed to survive a pandemic,” Harris said.
Black-owned businesses also seem to benefit less from federal incentive programs. Only 12% of black and Hispanic business owners surveyed between April 30 and May 12 received the requested funding. About a quarter received funding. In contrast, half of all small businesses reported receiving a single portion of the stimulus package — Salary Protection Programs — according to a census study.
“Black businesses often don’t have a traditional banking partner,” Harris said. Without such a partner, many had problems seeking help.
The disproportionate struggle faced by black small business owners is caused by the fact that their communities already bear the brunt of public health crises: blacks are more than two times more likely to die from coronavirus than other Americans, and are much more likely to that they will be victims of police violence.
Juliet Anderson owns two businesses, a salon and a venue for children’s parties, in the same quarter in the Bronx. According to her, both were closed for three months, and none of them received financial assistance. Accounts accumulate.
“It was a constant rollercoaster trying to get help,” Anderson said. “As far as I know, most of the people who are in our area have not received anything or received a minimum, and they are still waiting. This is an increased disappointment. We don’t know if we can do this. ”
According to a representative of the Department of Small Business Affairs of the city, only 2% of the program for lending to small businesses in New York in the amount of $ 20 million. The United States was allocated to businesses in the Bronx, the area with the highest proportion of blacks. Fifty-seven percent went to Manhattan.
Agency Commissioner Jonnel Doris said in a statement: “This is an unprecedented time that requires creative solutions, and we will continue to do our best to help every small business owner who needs it to get back on his feet. “
“Unfortunately, the companies that need financing, help and assistance the most do not receive it,” said Kudus Abdul-Wahab, owner of the Bronx Sleek Layers hairdresser. “It’s like a Titanic. Where was the water first? It was from below. The people below drowned first. “
In recent years, dark-skinned entrepreneurs, especially women, have opened businesses faster than the rest of the population. But black-owned companies seem to be struggling in part because they entered the block in a less secure way than many other companies. As of 2019, the vast majority of businesses in most black and Hispanic areas did not have enough cash to pay bills in two weeks.
Lawrence Katz, a Harvard economist, said he was worried that a pandemic could wreck havoc on low-income areas where there was more job and income loss. This, in turn, will reinforce the already huge differences in wealth and income between rich and poor, as well as between white and non-white Americans.
“I’m sure niche firms serving high-income people will be back,” Katz said.
Some business owners say they have found the most help from community organizations. Others adjusted their business model during locks, allowing them to remain open for now.
“We are sustainable people. African Americans, we have experienced so much, ”said Millie Peartree, owner of Millie Peartree Catering, which during the outbreak switched to feeding the main working and hungry children in the Bronx. “I’m always going to find a way.”
This article originally appeared in New York Times,
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