More than 40% of all black-owned businesses in the United States were forced to close in April, according to an analysis circulated by the National Bureau of Economic Research.
The study was highlighted in a Sunday editorial published in the Wall Street Journal, which declared that “lockdowns hit minority businesses.”
“If COVID-19 cases keep rising in the weeks to come, city and state leaders might reimpose a strict lockdown. They should bear in mind who’d be harmed most by the ensuing economic destruction,” the editorial reads.
Robert Fairlie, an economist at the University of California, Santa Cruz is quoted in the op-ed saying that the effects of statewide lockdown measures were especially devastating to businesses owned and operated by people of color.
“This study provides the first estimates of the early-stage effects of COVID-19 on small-business owners,” Fairlie said, adding: “The number of working business owners plummeted from 15 million in February 2020 to 11.7 million in April 2020.”
About 441,000 black business owners, 41%, left the market, the Wall Street Journal reported. For Latino businesses, the figures were 658,000 — 32%. For immigrants, it was 1.1 million, 36%, and for women, it was 1.3 million, or 25%.
Since the pandemic spread in March, millions of people in the U.S. have been put out of work as businesses large and small were forced to comply with statewide lockdown safety measures.
President Trump and other business-minded conservatives warned of the economic devastation that the country would face if lockdowns went on for too long.
“The cure cannot be worse than the disease,” Trump said during the early days of the pandemic.
As of early June, every state has started phased reopenings, allowing businesses to open at lower capacity provided they make accommodations for social distancing.
Some health experts have warned that states might have to implement new lockdown measures if a second wave of the virus comes this fall.
For minority-owned businesses, the Wall Street Journal wrote that a second round of shutdowns might not be a scenario they can survive.
“Since bills keep piling up even when revenue isn’t coming in, many of these small businesses face an uphill climb as it is,” the editorial concluded. “If they’re now getting back to work, and if they think they’ve taken the necessary precautions to do so safely, then the last thing they need is a politician ordering them to close shop for another month or two.”
