“Covid-19 has exacerbated these issues and businesses in the hardest hit communities have witnessed huge disparities in access to federal relief funds and a higher rate of business closures,” the authors wrote in their report.
For Black Americans in particular, deciding whether or not to keep economic shutdown orders in place has “acute and heartbreaking tradeoffs,” according to New York Fed Assistant Vice President Claire Kramer Mills.
“There does seem to be a relationship in the easing of protocols and the number of operating businesses,” Mills told CNN Business. “But some of those places have already reversed course because of the health effects. … There are incredibly close ties.”
The United States has 3,000 counties, but 40% of Black-owned businesses are concentrated in just 30 — about 1% of all the counties across the country. Black businesses tend to be concentrated in metropolitan areas where larger clusters of Black Americans live.
The study authors focused on 10 of the nation’s most populated counties and metro regions, — including Los Angeles, Chicago, Houston, Detroit, Washington, Manhattan, New York, Atlanta and Miami — which also have major black populations and large clusters of black-owned businesses.
“This tells us that a more targeted geographic focus on the hardest hit and most underserved places is needed,” Mills said in a statement about the report. “This brief shows the disturbing relationship between high geographic incidence of Covid-19 and the economic health of Black-owned businesses.”
The country’s PPP program administrators have made efforts to address racial disparities in who gets approved for the loans in recent weeks. Mills said the New York Fed’s study shows more targeted federal programs must be enacted to address those disparities.
“Certain [demographic groups] haven’t been as well served by policy to date,” she said.