The pandemic was particularly rough on Black-owned businesses, many of which are concentrated in retail, restaurants, and other sectors where social distancing is hard.
In addition:
An analysis of Census data by Robert Fairlie, a research associate at the University of California, Santa Cruz, found that the number of Black business owners was 28% higher in Q3 2021 than pre-pandemic, per US News. Why?
Black-owned businesses were already growing pre-pandemic, increasing 8% between 2018 and 2019.
And while the pandemic stalled many companies, it also led to new business growth overall as people pivoted into new revenue streams.
… the racial reckonings of 2020 led to greater scrutiny of disparities facing Black business owners, including:
As a result, many consumers rallied to support Black businesses, initiatives were launched to help Black entrepreneurs, and later PPP rounds were more equitable for minority-owned ventures.
“My guess is that the revised PPP program helped… but also more racial inequality awareness by customers and larger businesses seeking suppliers,” Fairlie told US News.
… may be challenging. A McKinsey report noted that only 4% of Black startups are successful, and most start with ~$72k less capital than white startups.
But investments in an equitable business ecosystem that closes the wealth gap could add $1T–$1.5T in annual GDP.
For more: Check out this Brookings report to see interactive charts that show how racial parity would change major US metro areas.