Donate today and your gift will be matched dollar-for-dollar by the American Public Media Board.
How will minority-owned businesses fare in CARES 4.0?
Share Now on:
Congress and the White House are still negotiating the next stage of economic response to the COVID-19 pandemic. In a Senate hearing Thursday, lawmakers sought more details on why minority-owned businesses benefited less from the last round of stimulus contained in the Coronavirus Aid, Relief and Economic Security Act and what can be done differently.
Black business owners had a particularly rough time getting access to Paycheck Protection Program funds at first, said Ronald Busby, president of U.S. Black Chambers, a body that represents thousands of business owners.
He told the Senate Committee on Small Business & Entrepreneurship that 70% of his members who applied for PPP loans were denied and almost everyone who was approved received less than they asked for.
The problem, he said, didn’t begin with the pandemic.
“Access to capital is the No. 1, No. 2, No. 3 concern for Black business owners,” he said.
Racial disparities in business lending often push small business owners to nontraditional lenders, which focus on underrepresented groups.
“Many, many clients come to us that had a false start attempt with their bank and never got to the end of the process because they just simply weren’t a high enough priority,” said Marla Bilonick, CEO of the Latino Economic Development Center, who testified at the Senate hearing.
Of course, banks aren’t the only source of capital to help start a business or keep it afloat in a crisis.
“A lot of owners borrow against their home equity through home equity lines or use other, you know, family members or their community to help them,” said Robert Fairlie, an economics professor at the University of California, Santa Cruz.
But, said Fairlie, even that approach tends to reveal economic disparities, highlighting the racial wealth gap in this country and the fact that minority communities are already suffering the worst health and economic effects of the pandemic.
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.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.
Don’t miss this special