Robert Fairlie, “The impact of COVID-19 on small business owners: Evidence of early-stage losses from the April 2020 current population survey,” Stanford Institute for Economic Policy Research, working paper 20-022, May 2020,. The pandemic contributed to tipping 41 percent of Black-owned US businesses into closure from February to April 2020. 2Ĭlaire Kramer Mills and Jessica Battisto, “Double jeopardy: COVID-19’s concentrated health and wealth effects in Black communities,” Federal Reserve Bank of New York, August 2020,. Indeed, about 58 percent of Black-owned businesses were at risk of financial distress before the pandemic, compared with about 27 percent of white-owned businesses.
#WHICH IS BETTER BLACK AND WHITE 1 OR 2 CODE#
André Dua, Deepa Mahajan, Ingrid Millán, and Shelley Stewart, “ COVID-19’s effect on minority-owned small businesses in the United States,” Electronic Code of Federal Regulations, Part 121-Small Business Size Regulations, October 5, 2020, sba.gov.īlack business owners have been disproportionately affected by the pandemic-linked economic downturn, partly because they were more likely to already be in a precarious position, including more likely to be located in communities with business environments that are more likely to produce poor business outcomes. These assumptions translate the $200 billion revenue increase to $290 billion in additional business equity. We assumed that US private companies’ enterprise value is 2.54 times annual revenue and applied a debt-to-equity ratio of 0.43. Our estimate of the wealth-building opportunity is based on an additional $200 billion per year in revenue for Black-owned businesses that attain revenue parity. This gap includes a $290 billion-and growing-opportunity to grow overall wealth by achieving revenue parity between Black- and white-owned businesses in addition to providing aid to small and medium-size businesses (SMBs)-those with up to 500 employees-with nonwhite owners. The COVID-19 crisis, however, has further stressed Black-owned businesses and may cause the racial wealth gap to widen. Healthy Black-owned businesses could be a critical component for closing the United States’ Black–white wealth gap, which we project will cost the economy $1 trillion to $1.5 trillion (in 2018 dollars) per year by 2028. Entrepreneurship and business ownership-particularly of community-based businesses-are crucial ways to develop community wealth, for both business owners and the people they employ.
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