The impact of the coronavirus pandemic has been unprecedented and far-reaching. We are in the middle of a public health crisis that has led to an economic one. Sadly, but not surprisingly, this pandemic has also exposed long-standing disparities in our country, taking a catastrophic toll on Black communities.
By now, it is clear that people of color in America, in particular Black people, are suffering from COVID-19 at alarming and disproportionate rates. Although African-Americans make up 13 percent of the U.S. population, early data shows we account for nearly 30 percent of COVID-19 patients.
These disproportionate numbers reflect historic and persistent inequities that many of us are all too familiar with. And while this is most certainly a public health crisis steeped in racial disparities, so too are the economic effects—particularly within the Black community.
In conversations in California and across the country, I frequently hear from minority small-business owners that they face barriers to getting help they need to keep the lights on and employees on the payroll. The Federal Reserve Banks’ 2016 Small Business Credit Survey found that of all minority-owned firms approved for loans, only 40 percent received the full amount requested, compared with 68 percent of White-owned firms with similar credit scores. If not getting assistance and resources was the norm for certain businesses before the pandemic, it’s not hard to imagine how devastated many of these businesses—and their owners and employees—must be now, given the widespread stay-at-home orders implemented to help stop the spread of the virus.
This is particularly disheartening when we consider that, as of 2012, Black and Brown businesses make up 30 percent of all businesses in the country, generating nearly $1.4 trillion in revenue and providing over 7 million jobs. And today, Black women are the fastest-growing group of business owners with more than 1.5 million businesses, making over $42 billion in sales. That’s a lot of hopes and dreams that have been turned into livelihoods that help not only the individual business owners, but the surrounding communities, too.
As a lawmaker, I fear that one unanticipated consequence of the coronavirus might be a setback—or even a complete shuttering—of our small businesses. As we’ve seen with economic crises of the past, small businesses often bear the brunt of the most severe impacts because they are less likely to have the necessary cash reserves or access to the capital needed to maintain operations when customers stay home.
So, what’s the path forward?
First, we need to make sure federal relief is distributed equitably. That is why, last month I called for the creation of a COVID-19 Racial and Ethnic Disparities Task Force to bring together experts, community-based organizations, and government officials to understand the virus’ impact and make targeted investments in communities based on their unique needs. The task force would ensure the distribution of necessary medical supplies such as masks and protective gear, as well as oversight and recommendations regarding the distribution of aid to small businesses.
Second, the federal government needs to get more financial support to small, minority-owned businesses. In April, Congress passed the CARES Act, which included critical support to families and communities but not enough relief went to our local small businesses. Congress authorized the Small Business Administration to implement the Paycheck Protection Program (PPP) to provide financial support and stability to small businesses affected by the pandemic. Unfortunately, many businesses lacking an existing relationship with certain banks or too few employees faced structural barriers to acquiring these loans, preventing nearly 95 percent of Black-owned businesses from receiving this support.
I was proud to partner with Congresswoman Ayanna Pressley (D-Mass.) to introduce the Saving Our Street Act to address the lending gaps and ensure funding gets to the businesses that are hardest hit and historically disenfranchised. The Saving Our Street Act would create new grants for very small businesses, also known as “micro-businesses,” which employ fewer than 10 employees (and together employ more than 5 million people nationwide). Additionally, this bill would track who receives the grant funding by race, gender, and so on, so we know where the funding is going. Our bill also sets aside 75 percent of the total funding for historically underrepresented businesses, including minority-owned businesses, to make sure the assistance gets to the businesses that need it most. These businesses include the neighborhood bodegas, hair salons, barbershops and food trucks. The average minority-owned business employs fewer than 10 employees, so we have to do everything we can to make sure they not only weather the storm but benefit from an inclusive path forward.
Third, we have to get creative in how we support our local businesses, whether that means supporting their online endeavors or sharing their business with family and friends. For me, that includes introducing legislation like the FEED Act, which is a bipartisan plan for the federal government to pay 100 percent of the costs for states and localities to partner with local restaurants and nonprofits to prepare meals for those in need during the pandemic. The FEED Act is a win-win because it allows restaurants and small farmers to bring in business while also giving back to their communities.
Small businesses are the lifeblood of our communities. While we continue to address the widespread impacts of the coronavirus, we must also look beyond the pandemic and chart a path forward to a better tomorrow—and that includes making sure the American dream is within reach for everyone, not just the privileged few.Share :