Pandemic Restrictions Extra Painful for Businesses Owned by Minorities, Women, and Veterans
In news that may come as a surprise to policymakers though probably not the rest of us, it turns out that small businesses with limited resources were hit hard during the COVID-19 pandemic. Those who suffered the most included business owners who had to struggle with natural disasters including floods and wildfires on top of social distancing and lockdown orders. But the worst sufferers included small- and medium-sized businesses (SMBs) owned by minorities, women, and veterans who just didn’t have the resources to handle slowdowns and (especially) forced closures. While not all business woes over the past two years were the result of political decisions, it’s fair to say that pandemic policy proved more damaging than hurricanes to the most vulnerable entrepreneurs.
“A study carried out by researchers at the National Institute of Standards and Technology (NIST) and the National Oceanic and Atmospheric Administration (NOAA) revealed that businesses run by minorities, women and veterans, which they call historically underrepresented group operated (HUGO) businesses, were dealt a much worse hand by the pandemic than other businesses,” NIST announced last week. “What’s more, the team saw that HUGO businesses reported harsher downturns from COVID-19 alone than even non-HUGO businesses that were struck by natural disasters on top of COVID-19.”
The findings are published in a paper in the International Journal of Disaster Risk Reduction and, while they’re eye-opening, there’s also a common-sense quality to what the researchers have to say. Basically, people who are already strapped are going to be hit harder by tough times and restrictive policies.
“Pre-pandemic, there were 30.7 million small businesses in the U.S., which accounted for 99.9% of all U.S. business; of these, approximately 18.3% were minority-owned and about 19.9% were owned by women for reference year 2018,” the researchers write. “From the start of the COVID-19 pandemic, the number of active SMBs plummeted, with minority and female-owned businesses disproportionately impacted.”
Why would businesses owned by minorities, women, and veterans be slammed so much harder than other small firms during the pandemic? It turns out that they tend to be smaller, newer, and have fewer resources than other businesses, which limits access to capital as well as resilience in the face of downturns. C
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