Widespread lockdowns across the country shuttered many small businesses for months. Stores, factories, and many other companies closed due to government-enforced public health orders or because of a rapid shift in demand. A new report from the National Bureau of Economic Research (NBER) provides the first analysis of lockdown impacts on small businesses, makes a shocking discovery that African-American owned businesses plunged by 41%.
NBER commissioned the new report titled "The Impact of Covid-19 on Small Business Owners: Evidence of Early-Stage Losses from the April 2020 Current Population Survey" -- shows active business owners in the US declined by 3.3 million or 22% from February to April because of "unprecedented" economic impacts of lockdowns. The decline in small business owners was the "largest on record," and losses felt across all industries.
The report said African-American businesses were hit the hardest, recorded a 41% decline of black owners from February to April. Next were Latino owners, fell 32%, and Asian business owners dropped by 26%.
Immigrant business owners plummeted 36%, and female-owned businesses fell by 25%. These findings of early-stage losses to small businesses, so far, outlines how minority businesses were crushed during the lockdowns.
"The negative early-stage impacts on minority- and immigrant-owned businesses, if prolonged, may be problematic for broader racial inequality because of the importance of minority businesses for local job creation," said the report's author, Robert Fairlie of the University of California at Santa Cruz Department of Economics.
In a separate report, we noted how the virus-induced economic downturn could result in at least 52% of small businesses closing up shop in the next six months.
For readers, it's essential to understand that nearly half of all US jobs originate from small businesses. This all suggests the quick economic recovery narrative pitched by the Trump administration and Wall Street is bullshit.