Photo: istockphoto.com
By Isaac Cohen*
The Federal Reserve Bank of New York released, on April 15, the results of the “2021 Report on Firms Owned by People of Color,” based on the responses of United States firms that were operating six months after the pandemic started. Among those surveyed, 9,693 with fewer than 499 employees and 4,531 with only the owner in the payroll. The main conclusion is that “firms owned by people of color reported more significant negative effects on business revenue, employment, and operations as a result of the COVID-19 pandemic.”
In response to the pandemic, reduced operations were reported by around two thirds of Asian, Black and Hispanic owned firms, in contrast with 54 percent of White owned firms. Most of the firms surveyed in 2020 faced an increase, from 2019, of “significant financial stress,” around 90 percent of minority owned firms, up from almost 75 percent. Meanwhile, White owned firms also faced financial challenges, but of a lesser magnitude, 79 percent in 2020, up from 65 percent in 2019.
The survey revealed that the Paycheck Protection Program was “the most commonly sought form of emergency assistance funding” by all the firms surveyed. However, minority owned firms received a lesser proportion of the funding they requested.
One week before the release of the report, Treasury Secretary Janet Yellen acknowledged that economic crises “hit people of color harder and longer.” She added, “I am worried the current crisis will do this again. In fact, I know it will, unless we act.” (The New York Times, 04/06/21).
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
