Black-owned businesses face increased safety and economic risk from COVID-19

Kimberly Adams Apr 7, 2020
Black people are almost 13% of the U.S. population, but only about 4% of business owners. Samuel Corum/Getty Images

Black-owned businesses face increased safety and economic risk from COVID-19

Kimberly Adams Apr 7, 2020
Black people are almost 13% of the U.S. population, but only about 4% of business owners. Samuel Corum/Getty Images

People and businesses everywhere are feeling the impact of the COVID-19 pandemic but the health and economic effects are showing up in some communities more than others. Early data shows that African Americans are dying of COVID-19 at a disproportionate rate. In Michigan, for instance, black people were 40% of the reported deaths, while 14% of the state’s population.

There’s also a separate matter about the effect of the pandemic on black-owned businesses.

Ana Taylor’s troubles are, in some ways, the same as health care providers everywhere. Her business Deer Valley Home Health Services in St. Louis, Missouri, sends nurses and therapists to people’s homes.

“We have had a lot of problems getting equipment, especially gloves, masks, sanitizer,” Taylor said.

She was eventually able to find supplies for her staff.

“You’re looking at anywhere from 900 to 1,000 people, most of them are African American women,” Taylor said.

Black people are almost 13% of the U.S. population, but only about 4% of business owners.

“Black-owned firms with paid employees generate over $103 billion in receipts annually, with the largest share about $17 billion earned in the health care and social assistance sectors,” said Andre Perry, a fellow at the Brookings Instituion.

Those are sectors facing a lot of risk just now, for medical reasons.

The second-largest chunk of black businesses? Service industries, like retail and restaurants, which are at an especially high economic risk.

Jaclyn Johnson’s Washington, D.C., catering business Made with Love would normally be busy with corporate events, weddings and baby showers during April. Now she says “everything slowed down. First it was a slow crawl, to a total halt going from February into March.”

Johnson is applying for a grant from the D.C. government so she can keep her chef on staff and pay rent. But the fact that Johnson has even one full-time employee puts her in the minority of black-owned businesses.

“Of the 2.6 million black-owned businesses, 2.5 million have no employees,” said Ron Busby, president of U.S. Black Chambers, a coalition of black chambers of commerce.

That’s about 96%. For business owners overall, that number is 78%.

The latest COVID-19 rescue loans tie a lot of the loan forgiveness to paying employees, which is a problem if you don’t have any.

“So that is a big concern of our small businesses, the barber shops, the consulting firms, the nonprofits that are going to be impacted,” Busby said.

His organization is trying to coach its members on how to make the most of the rescue package, but he expects most of the money will end up going elsewhere.

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy continues reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

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