New Study Shows COVID-19 Wreaked Havoc on America's Minority-Owned Businesses

Michigan Office of the Governor via AP, Pool
AP featured image
In this Thursday, May 21, 2020 photo provided by the Michigan Office of the Governor, Michigan Gov. Gretchen Whitmer speeks during a news conference in Lansing, Mich. Whitmer is relaxing coronavirus restrictions to lift a ban on nonessential medical and dental procedures, reopen retail shops and let residents gather in groups of 10 or less. The small social gatherings can start immediately. Retails stores and auto dealerships can reopen by appointment only starting Tuesday. Medical, dental and veterinary offices can resume nonessential procedures beginning May 29. (Michigan Office of the Governor via AP, Pool)

There’s been speculation for a while that some of the same businesses that were damaged or destroyed by rioters and BLM activists these past few weeks were already in a bad situation because of the COVID-19 “non-essential businesses” lockdowns imposed by governors across America. Now, a new study seems to confirm what many had feared all along — the quarantines disproportionately wreaked havoc on America’s minority-owned businesses.

In a June 5th piece at our sister publication Townhall, Matt Vespa asked this important question:

Sorry, small business owners protesting over these Democratic governors arbitrarily extending the lockdowns are not grounded in white supremacy. Also, do these “experts” think that black small business owners weren’t impacted by this quarantine?

Up to now, the “experts” all seemed to answer “yes.” But in a newly-published piece, Brad Polumbo, a Fellow at the Foundation for Economic Education (FEE), citing a study authored by Professor Robert Fairlie of the University of California, Santa Cruz for the Stanford Institute For Economic Research, writes:

The government’s response to this crisis….imposed disproportionate negative impacts on less politically influential minority-owned small businesses.

Prof. Fairlie looked at nationally representative government survey data, and found that the number of active U.S. business owners plummeted by 3.3 million, or 22 percent, in the two months from February to April 2020. He added that “[t]he drop in business owners was the largest on record,” regardless of industry or type of business structure.


But Polumbo says the most concerning thing is these data “when broken down along racial lines.”

According to Fairlie:

African-American businesses were hit especially hard experiencing a 41 percent drop. Latinx business owners fell by 32 percent, and Asian business owners dropped by 26 percent.

Simulations indicate that industry compositions partly placed these groups at a higher risk of losses. Immigrant business owners experienced substantial losses of 36 percent. Female-owned businesses were also disproportionately hit by 25 percent.

Polumbo then shares a new report from the NY Times which he says reveals “the massive government programs passed as COVID-19 ‘relief’ and ‘stimulus’ efforts….are failing to help many of those who are most in need”:

Black-owned businesses also appear to be benefiting less from federal stimulus programs.

Only 12 percent of black and Hispanic business owners polled between April 30 and May 12 received the funding they had requested.

You can read Polumbo’s full analysis of the study here.

Backing up to look at things through a political lens at President Donald Trump’s prospective reelection, my colleague Elizabeth Vaughn wrote in mid-April that some had the sense that Democrat party wanted to “see [the lockdown] continue for as long as possible. They are acutely aware that a slow economy will hurt the President’s chances of reelection.”


She cited a Politico story on House Speaker Nancy Pelosi’s machinations with her Democrat colleagues, which read,

Until a robust testing and contact tracing system is in place, [Pelosi believes] it would be impossible for the president to guarantee Americans a safe reentry into their normal life.

It’s also worth reminding ourselves as conservatives of one, more “legacy” the Wuhan coronavirus spending will leave all of us; as Polumbo notes: that relief money got tacked right on to the debt.


Join the conversation as a VIP Member

Trending on RedState Videos