Black Americans are bearing the brunt of the coronavirus (COVID-19) epidemic, according to multiple studies showing disparities in infection rates, symptoms, and deaths due to the virus.
The most recent study, conducted by amfAR and reported on by Politico, shows that Black Americans make up more than 50% of infections and deaths due to COVID-19 - despite making up less than 15% of the U.S. population.
But beyond physical health, Black Americans’ economic prosperity is also affected disproportionately - sometimes in ways that aren’t obvious.
Black-owned businesses have been especially hard hit by the pandemic. “Minority business owners … may be especially vulnerable to the economic devastation” brought on by the pandemic, reports the Washington Post, because they are less likely to have a “financial cushion” and often exist in lower-barrier industries that were hit harder.
Lower wages, more difficulty getting loans, and everyday racism, according to Eater, means Black entrepreneurs have a harder time opening - and maintaining - businesses such as restaurants.
As CBS reports, many Black business owners hoped for support from the CARES Act, a $2 trillion stimulus effort passed by the government to prop up small businesses during the pandemic. But most haven’t gotten the support they need.
According to Mother Jones, that same discrimination that makes being a Black entrepreneur more difficult is showing up in the stimulus: “Banks screened out businesses that they hadn’t previously lent money to and reportedly gave preferential treatment to wealthier clients.” Black businesses are more likely to work with smaller, local banks - many of which were not eligible to distribute the loans.
The federal loan program has been flawed since it first launched, asserts NPR. The application was confusing, and the $349 billion ran out in less than two weeks.
Massive companies, many of which were doing fine financially, exploited a loophole to get loans they didn’t need. All the while, the banks administering the loans made billions of dollars in fees.
The New York Times notes that because Black-owned businesses are more likely to hire Black people and invest in Black communities, they are essential to closing the wealth gap.
That won’t happen if the COVID-19 crisis forces them to close because they can’t get support. The Center for Responsible Lending estimates that up to 90% of small businesses owned by people of color have been excluded from getting CARES Act loans - and without it, the future looks grim.
A second round of small business loans are underway, and NPR reports that “lawmakers were concerned with making sure smaller lenders could get better access” this time around - but also notes that larger companies and companies in less-affected areas are still getting big portions of the available funding.
This round of funding seems to be depleting quickly as well, and a third round has been proposed, reports CNBC. Whether this will matter to many Black business owners, who don’t have the financial reserves to wait weeks or months to get support, is yet to be seen.