The coronavirus pandemic has led to the largest drop in small business ownership in the United States, hurting black business owners the most, according to a June study from an economic research organization.
3.3 million business owners are not actively working, and 22% of the closures came during the February-to-April window of coronavirus restrictions, reportedAxios, citing a National Bureau of Economic Research working paper. In the whole Great Recession of 2008, small business owners shrank by 730,000 at 5% reduction, the study noted.
Of the 3.3 million, 1.1 million small business owners were black, according to the study. Black business owners shrank from 1.1 million to 640,000 — a 41% difference.
“These findings of early-stage losses to small businesses have important policy implications and may portend longer-term ramifications for job losses and economic inequality,” Professor Robert W. Fairlie wrote in the study. Fairlie is the author of the study and an economics professor at the University of California Santa Cruz.
Based on “monthly files” data of the Current Population Survey (CPS), small businesses qualified for the study if they were self-employed individuals working “at least 15 hours” a week. 15 million business owners were working in February, leaving 11.7 million small business owners in April.
Fairlie did not