NEW YORK — Black-owned businesses have been hit substantially harder by the coronavirus pandemic than companies overall, according to the Federal Reserve Bank of New York.
The New York Fed on Wednesday unveiled a study on the virus’ impact on business owners nationwide, and the results show disparities in how the business owners of various races have struggled.
The report estimates that 41% of Black-owned businesses across the country shut down between February and April, echoing the findings of a similar University of California, Santa Cruz study released in June. About 32% of Latino businesses and 26% of Asian businesses shut down over the same time span. Only about 17% of white businesses shut down during the same period, the study authors found.
The authors cite lack of financial savings, less access to capital, and funding gaps that existed prior to the pandemic as causes for the demographic disparities.
“Covid-19 has exacerbated these issues and businesses in the hardest hit communities have witnessed huge disparities in access to federal relief funds and a higher rate of business closures,” the authors wrote in their report.
The New York Fed study also determined 40% of Black-owned businesses are concentrated in just 30 counties, about 1% of all the counties across the country. Black businesses tend to be concentrated in metropolitan areas where larger clusters of Black Americans live. Two-thirds of those businesses are in regions with the highest level of Covid-19 cases, researchers determined.
“This tells us that a more targeted geographic focus on the hardest hit and most underserved places is needed. New York Fed Assistant Vice President Claire Kramer Mills said in a statement about the report,” This brief shows the disturbing relationship between high geographic incidence of Covid-19 and the economic health of Black-owned businesses.”
Many Americans have been promoting “buy black” programs this summer to help save Black-owned businesses struggling to stay afloat as the pandemic and related government shutdowns rage on across the country. The study authors suggest those efforts aren’t doing enough.