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
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
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