How Asian-owned businesses are weathering the pandemic
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There’s more evidence that this pandemic is not affecting all businesses equally.
A new report from the JPMorgan Chase Institute found that while Black-owned businesses are facing the biggest drops in cash reserves due to the COVID-19 pandemic, Asian-owned businesses are close behind, with cash balances down 22% in April and revenue down more than 60%.
“Asian-owned businesses — their cash balances were also down more than 20%,” said Chi Mac, the small business research lead at the JPMorgan Chase Institute. “That’s certainly a much steeper decline than what we see across all small businesses.”
Not all communities track business ownership by race, so this analysis is limited to a few states. But it matches up with what Robert Fairlie, professor of economics at the University of California, Santa Cruz, is finding in his research — especially earlier in the pandemic.
“I found, for example, in April that 26% of Asian-owned businesses shut down during that month,” Fairlie said. “I also looked at this in May and found that 21% were also closed.”
For business owners overall, the drop was 15%. Some of that was just general business conditions when the pandemic hit. Khoa Le owns Kvibe Studios in New Jersey.
“Boom — I lost all my corporate contracts. Within about a two-week span, I lost close to over half a million dollars,” Le said.
But he acknowledges that in the early days, racism played a role for some Asian-owned businesses as well.
“My wife owns a nail salon, so when the salons were still open, people will go into the salon and say, ‘Hey, are you Chinese? Because if you are, I’m not gonna do business,’ ” Le said.
Now that nail salons are open again, he said people are lining up to get into his wife’s shop. And Le has pivoted to more virtual video sessions and said his corporate clients are starting to come back.
COVID-19 Economy FAQs
What do vaccines mean for economic recovery?
COVID-19 is not going anywhere anytime soon, according to expert witnesses who testified at a recent hearing held by the Joint Economic Committee. Put simply, we can’t eradicate the virus because it infects other species, and there will also be folks who choose not to get the vaccine or don’t mount an immune response, according to Dr. Céline Gounder at NYU School of Medicine & Bellevue Hospital. “That means we can’t only rely on vaccination,” Gounder said. She said the four phases of recovering from the pandemic are ending the emergency, relaxing mitigation measures, getting to herd immunity and having long-term control.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins 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.
What do I need to know about tax season this year?
Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.
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