The sudden shutdown because of the Covid-19 spread has impacted the African American business the worst, among all the other racial and ethnic groups in US. The black business owners between February and April has seen a 41% decline in the sales, as per a study conducted by the National Bureau of Economic Research.
It is not new that the pandemic has impacted several businesses and entrepreneurs, closing down almost 3.3 million smaller businesses temporarily but the sidelining of 440,000 African Americans was quite severe.
The reason why the impacts on the Black owners have been fared worse is because only a small percentage of them operated in the industries that are deemed “essential” to keep open during a pandemic.
Even the immigrant business owners experienced a drop in their sales by 36%, according to the study.
“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, economic advancement, and longer-term wealth inequality,” said Robert Fairlie of the University of California at Santa Cruz, who is also the lead author of the study.
The findings of the study further highlight the wrath of the lockdowns that the African Americans have had to face, in comparison to the other racial groups in the country. They have also suffered higher mortality rate because of the Covid-19 along with joblessness.
As per the data published by the Bureau of Labor Statistics on Friday, the unemployment rate among the White Americans during Covid-19 was around 12.4% which was 16.8% for the African Americans.
Just the number put the disparities on the forefront., highlighting the racial inequalities that Black community face in American, especially with the ongoing protests that have been going on in all the 50 states of the country to demand justice for the constant injustice that they have been facing because of the mere color of their skin.
The study conducted by NBER analysed the data shared by the federal government population survey to check how many of the small business owners had ceased their operations ever since the Covid-19 outbreak, in between February and April.
But, it is to note that the report doesn’t make any sort of assumptions whether the businesses are being closed temporarily or permanently. It also includes some of the relief aid introduced by the federal government to help keep some of these small businesses afloat, the main one being the $669 billion Paycheck Protection Program.
The study also doesn’t talk about the second tranche of the PPP funding that was again introduced later in the month of April and then reached several of the small firms that were temporarily closed in the first round.
A new bill signed last week by the office further provides some of these small businesses with improved flexibility in how they can leverage these PPP loans for keeping their businesses going.
In general, the total number of the operating business owners drastically dropped in April from 15 million to 11.7 million because of Covid-19 lockdowns.
Aside from the Black Americans, even the Hispanic small business owners experienced a decline in their sales with a 32% decline over the course of time. Asians and female business owners saw a decline by 26% and 25%.
The study further highlights that the businesses owned by the white women fell by 17%. Among all of the industries, the only one that didn’t see a decline in the small business sector was that of the agriculture, which saw a 7% rise in the business.
Some of the hard-hit industries include arts, leisure and the hotels and hospitalities and even construction industry.
