Global Economics

Black-Owned Businesses Have Taken a Big Hit from the Pandemic

According to a Forbes report this morning, almost half of all black-owned small businesses have been closed since the beginning of the COVID-19 pandemic.

The information presented by Forbes is according to a report from the New York Fed, which showed that these enormous numbers of business closings were accrued by the end of April. The same report demonstrated that black-owned small businesses were almost twice as likely to close than white-owned small businesses.

Overall, the business decline was noted in significant numbers in the report, with a decrease in active business owners hitting 22% between the months of February and April of this year. However, non-white owned businesses showed more significant drops. Here’s a breakdown:

  • White-owned companies declined by 17%
  • Asian-owned companies declined by 26%
  • Latin-owned companies declined by 32%
  • Black-owned companies declined by 41%

According to the New York Fed, the reason for this disparity in business closings is due to a number of reasons, including a lower percentage of black-owned businesses receiving coronavirus payment relief and coronavirus infection rates being higher in areas with a higher percentage of black-owned companies.

As coronavirus numbers continue to rise in the United States, the economy as a whole is struggling. Many retail stores have shuttered or declared bankruptcy since the beginning of this year. The U.S. has also seen a steep decline in sales within the airline industry. According to the New York Times, as of today, there are over five million cases of coronavirus and over 160,000 deaths.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Trader Buzz). I have no business relationship with any company whose stock is mentioned in this article.


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