RESEARCH TRIANGLE PARK – Just how badly American small businesses have been hammered by the economic fallout created by stay-at-home orders dealing with the COVID-19 pandemic are spelled out in a new research paper. Especially hard hit have been businesses operated by African Americans and other minorities as well as women and immigrants.
While unemployment numbers have been staggering with 1 million jobs lost in North Carolina alone, the analysis by Robert Fairlie at the University of California at Santa Cruz Department of Economics is the “first analysis of impacts of the pandemic on the number of active small businesses in the United States.” He published the data as part of a National Bureau of Economic Research working paper. His findings are based on federal Current Population Survey data published for April.
Fiarlie reports that:
- The number of US small businesses plunged 22 percent to 3.3 million from February through April – a record – with businesses across “nearly all industries” affected
- 41% of African American businesses closed
- 32% of Latino owned businesses closed
- 26% of Asian owned businesses closed
- 25% of female owned businessed closed
- 36% of immigrant-owned businesses closed
Fairlie notes that various programs such as the Paycheck Protection Plan and the fed’s Main Street loan initiative have been launched to help small businesses with loans, but they may not be enough to ward off further economic damage.
“More permanent mass closures of small businesses in the United States are likely to have a dramatic effect on employee job losses, further income inequality, and contributing to a prolonged recession,” he warns.
Read the full paper, including many charts and graphics, online.
(Copyright on the report is owned by Robert W. Fairlie.)
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