Minority biz hit hardest by crisis

The number of working African-American business owners in the US plummeted more than 40 percent as the coronavirus shut down much of the economy — a far steeper drop than other racial groups experienced, according to an analysis confirming fears the pandemic would deepen inequalities in the business world.

Closures and social distancing to slow the virus’ spread have taken a disastrous toll across racial groups, with the total number of active business owners dropping 22 percent from February to April, based on granular data from the federal government’s employment surveys that was made available last week.

But minority-owned businesses have suffered disproportionately in a crisis that’s also killing nonwhite Americans at higher rates and eliminating more of their jobs.

Experts have voiced concerns that wealth gaps, trouble accessing government aid and concentrations in reeling industries have left these companies and the families they support more vulnerable to the pandemic’s fallout. But they’re still working to understand and measure the colliding hardships making the future of minority-owned businesses especially precarious.

The new data on ownership by racial group is “devastating,” said Robert Fairlie, an economics professor at the University of California at Santa Cruz, who plans to post a working paper on his findings.

“We already have disparities. African Americans have the lowest business-ownership rate in the population . ... And so here we’re creating a situation of closures that’s hitting the groups with the lowest rates even harder,” he said.

Minority-owned companies often create jobs for people from the owner’s ethnic or racial group, he said, and their success radiates out in the community. Research links business ownership to long-term wealth.