Posted 10/12/2020 in Category 1

African American Companies Most Affected by COVID

African American Companies Most Affected by COVID


Black companies have approached the crisis with little financial strength compared to other communities, according to the Federal Reserve of New York. The relations of their managers with the banks have been weaker. It has been more difficult for them to benefit from the loans set up by the federal state in the face of the pandemic.

“Racial disparities in banking relationships before COVID-19 raise structural questions about banks’ presence and operation in communities of color,” notes Claire Kramer Mills, an official at the Federal Reserve of New York. These issues become increasingly important when banks are called upon to manage aid programs like these loans.

The study notes that business closures during the pandemic affect nearly twice as many those in this community as others, echoing the Black Lives Matter movement against racial discrimination, which gained momentum after the death of George Floyd.

Aid has not reached the hardest-hit areas, as 40% of African American businesses that received government loans are concentrated in 1% of counties nationwide. COVID-19 has exacerbated pre-existing problems. The White House and congressional officials have been trying to agree on a plan to provide additional assistance to households and businesses affected by the crisis.

The underserved and hardest-hit areas must receive targeted geographic focus. Just over $ 521 billion has been loaned to small and medium-sized businesses across the country. Still, the terms of these loans are being singled out.

Banks grant these loans, and larger companies with close relationships with these establishments have benefited from more funds than some very small companies, such as businesses that never have recourse to this funding method.

The low unemployment rate for blacks hides strong disparities in the United States

The US jobs report shows the black unemployment rate has fallen to its lowest level on record, but the figure hides large disparities. The jobless rate among African Americans has fallen to 6.6%, a low not seen since 1972, which marks this statistic's start. However, it remains nearly double the rate of whites (3.6%).

President Donald Trump has repeatedly highlighted the drop in the unemployment rate among African Americans, taking credit for it thanks to the economic policies he promotes and encouraging hiring.

The jobless rate for blacks has declined steadily since the financial crisis after peaking at 17% in March 2010 compared to 9%.

However, the country still faces minorities’ barriers, which are reflected in the much lower proportion of African Americans in the employment participation rate. Businesses are struggling to fill positions. However, the Trump administration does not favor immigration. To be considered a participant in the labor market, an individual must be employed or looking for a job.

Another factor is the incarceration rate, which is much higher for blacks, preventing them from finding permanent employment. Few employers will hire someone with a criminal record.

Ebony100 is combatting striking disparities against black entrepreneurs and businesses. The company aims to provide a promising platform for black businesses to find each other, communicate, and collaboration for business opportunities and expansion. Join the Ebony100 network and help close the gap for the greater good.