COVID Restrictions Slam Black Businesses the Hardest

Stephanie Hart, owner of Brown Sugar Bakery in Chicago. Restaurant Business describes her travails in “Recent Crises Add to Life-or-Death Struggles for Black-owned Restaurants.”

by James A. Bacon

If Governor Ralph Northam needs further justification for reversing his emergency shutdown measures, perhaps he should consider this recently published paper by Robert Fairlie with the University of California-Santa Cruz.

Analyzing the impact of COVID-19 social distancing restrictions on small business, Fairlie found that they disproportionately hit minority enterprises. The number of active business owners in the U.S. plummeted 22% between February to April 2020. “African-American businesses were hit especially hard experiencing a 41 percent drop. Latinx business owners fell by 32 percent, and Asian business owners dropped by 26 percent,” Fairlie writes. Immigrant and female businesses were similarly affected.

Using the logic of disparate impact, in which any adverse differential between whites and blacks is deemed to be evidence of discrimination or structural bias, the emergency decrees enacted by Northam and other activist governors can only be described as racist.

Northam may not have promulgated the decrees with racist intent, but motives really aren’t the issue. What matters are outcomes.

What surprises me is how little African-American politicians have had to say about the devastating impact of COVID-19 measures on black-owned businesses — an effect that has been compounded by riots, looting and arson in urban areas in the past month during protests over the George Floyd killing. How many black businesses have lost their life savings? How much black wealth has been destroyed?

Some people seem to never lose their faith in the power of government to address all ills in society and in the ability of social engineers and other “experts” to know what’s best for everyone. The experts usually manage to insulate themselves from the adverse consequences of their initiatives, however, so they’re slow to perceive and respond to negative feedback.

In a nation increasingly governed by the social-justice paradigm, data that confirms The Narrative is rapidly processed. Data that doesn’t — such as the impact on black-owned business — often gets ignored. Such blinkered thinking needs to change.

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28 responses to “COVID Restrictions Slam Black Businesses the Hardest”

  1. What a coincidence. I just came across this Mercatus Center paper, “Regulation and Income Inequality in the United States” by Dustin Chambers and Colin O’Reilly. Here’s the abstract:

    Income inequality in the United States has risen over the past several decades. Over the same period, federal regulatory restrictions have increased. An emerging literature shows that regulations can have regressive effects on the distribution of income, exacerbating inequality. The Federal Regulation and State Enterprise (FRASE) index quantifies the regulatory restrictions that apply to each US state by industrial composition. We construct a panel of 50 US states from 1997 to 2015 to test whether states exposed to more federal regulatory restrictions have higher levels of income inequality. The results indicate that a 10 percent increase in federal regulation is associated with an approximate 0.5 percent increase in income inequality as measured by the Gini coefficient. When states are rank-ordered by average Gini coefficient, a 0.5 percent increase in income inequality will typically result in a two-position decline in state ranking.

    1. Tom Banford Avatar
      Tom Banford

      With all the deregulation at the federal level over the past 3 years, when can we look forward to a rapid decrease in income inequality. I will be watching with baited breath.

    2. Matt Hurt Avatar
      Matt Hurt

      Just think about this- who writes the regulations? Is it fair an impartial politicians, or the paid lobbyists of the companies who are to be regulated and who contribute generously to those politicians’ war chest?

  2. Tom Banford Avatar
    Tom Banford

    So you are endorsing the “logic of disparate impact” as evidence of structural bias. I have been wondering why it was that you never choose to address the issue of systemic racism which is now at the forefront of discussion around the country. I was afraid that it was just too difficult a topic for this blog and its contributors.

    1. I’m not “endorsing” the logic. I’m just applying it the way the progressives apply it and reach the conclusions that progressives would reach if they were intellectually honest.

      In truth, I don’t think Ralph Northam is a racist. I think he’s very misguided, but not a racist. Still, by the logic of the Left, some of his policies are racist. Which means he is.

      1. Tom Banford Avatar
        Tom Banford

        With regard to intellectual honesty, would you be so kind as to tell me what you mean by the “Left”? How encompassing is the term as you make use of it?

        1. Dick Hall-Sizemore Avatar
          Dick Hall-Sizemore

          Also, please provide some examples of “disparate impact” used as the sole indicator of racial bias. “Disparate impact” can be an indicator and serious thinkers and researchers then search for the causes of that “disparate impact”. It could be policies or practices that, intentionally or not, worked to the detriment of a racial element of society.

          By your logic, because COVID-19 affects black communities the most, that makes it a “racist” disease.

    2. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      “I was afraid that it was just too difficult a topic for this blog and its contributors.”

      This is what I mean: a snot.

      1. Tom Banford Avatar
        Tom Banford

        Yes, a “snot” that wore the uniform of this country for 20 years to protect your right to say so. I wish that there were more citizens willing to do likewise.

        1. Reed Fawell 3rd Avatar
          Reed Fawell 3rd

          Please, no lectures on your virtue or privilege. They all come in one size: Cheap.

    3. LarrytheG Avatar

      Well.. it’s too hard to deal with …honestly… so we get all this twisted “logic”.

      I’m not sure I buy the premise that “ANY” disparate impact is proof of structural racism.

      First of all – ANYONE who is “poor” is impacted by higher prices and regulations but how can we say it’s “racist” for only one race?

      Wouldn’t it also be “racist” for asians, Hispanics, Muslims… and plain old good old white boys?

      what makes it only apply to “structural racism” against blacks?

      Jim does not buy the basic argument that SOME disparate impacts COULD be structural racism” so he makes the argument that ANY/ALL of it is – but then he only applies it to one race.

      1. CrazyJD Avatar

        >I’m not sure I buy the premise that “ANY” disparate impact is proof of structural racism.>

        Good, Larry. You’re getting the hang of this. I agree.

  3. Nancy_Naive Avatar

    I have no doubt distancing affects black-owned disproportionately just because they have been excluded from being, oh say, owning brokerage houses and such.

    “Same as usual Mortimer? $1”

  4. Peter Galuszka Avatar
    Peter Galuszka

    I am sure that minority business owners are being hit hard by the restrictions. But your regular complaining about the lockdowns, along with those of Ms. Dougherty, twist the truth. It is not just Ralph Northam doing this. Governors of EVERY STATE in the country have issued some kind of emergency decree forcing restrictions of varying degrees. Many states are reopening now, as is Virginia.
    I do not know why you leave out such an important distinction. My only thought is that you are using the Republican Party play book to denigrate Northam since he is a Democrat and has successful institute a number of needed, progressive legislatrive reforms.

    1. Nancy_Naive Avatar

      Provincial, aren’t they? One might even say, “parochial”.
      What’s that other word for insular? Oh yeah, conservative.

    2. CrazyJD Avatar

      >>Governors of EVERY STATE in the country have issued some kind of emergency decree forcing restrictions of varying degrees>>

      Again with the “And so’s your momma” reasoning. Technically, it’s known as “appeal to authority”, a subpart of genetic fallacies so often used on this blog. “They’re doing it, therefore it must be ok”, never mind, of course, that the notion that EVERY STATE issued some kind of emergency decree wildly overstates the case you are trying to make. That part is called fallacy of neglected aspect, another favorite on this blog. What exactly were the “some kind”? and what were the “varying degrees”? And how many really were “restrictions” rather than guidelines or suggestions.

      1. LarrytheG Avatar

        Naw. If someone wants to make the case that Northam is way out in front of his skis – how would you decide if that argument was fair or legitimate?

        Just because someone makes that argument does not mean it is true.

        So how does one judge ?

        One way is to compare Northam to others who do similar work.

        If he is truly out in front of his skis, such comparisons will show it.

        If such complaints are coming from folks who have always been opposed to Northam and the Dems – how does one judge it to be a valid criticism or just partisan sniping?

        If the criticism is actually coming from sources other than partisan opponents, it may have merit…but coming from the typical partisan folks, it might need something more than just the assertion.

        Polls are another way, especially ones that delineate Dem, GOP and independent views.

        How much of the criticism is truly non-partisan?

      2. Nancy_Naive Avatar

        Well, in order to provide a grade on a fixed scale, please supply us with the, or even your, gold standard of gubernatorial responses, please.

        1. LarrytheG Avatar

          oh that would be HIGHLY irregular in this blog! 😉

          That’s just not the primary point! Govt is “bad”. How can we count the ways! ?

          1. Nancy_Naive Avatar

            During the late 80s, this blog was televised and is now being shown here in reruns. “Michael and Elliot, colleagues at a large ad agency, leave those jobs to open an agency of their own.”.

            Their escapades included drinking wine, living in nice houses and being overly dramatic about everything. The series was officially titled “30-Something”, but known universally as, “The Whiny White Boy Show”.

          2. Nancy_Naive Avatar

            I swear if they wrote Northam a letter telling exactly what to do and he followed it to thee tee, they’d scorch him for a lack of imagination.

    3. Peter, I think you would have figured this out by now. Bacon’s Rebellion is a Virginia-focused blog. Commentary about Virginia governors falls within our purview, not the governors of Maryland, North Carolina or any other state (unless their activities impact Virginia).

      However, I do agree that when dissecting Northam’s performance, it is fair and relevant to compare his actions to those of other governors.It is true, Northam falls in the “middle of the pack” as far as the severity of his lockdown. And that should be acknowledged.

      So, I hereby amend my post to contend that the lockdowns mandated by Governor Northam and nearly all other U.S. governors, are, by social justice standards, racist. The rest of my post stands as written. And I totally agree with CrazyJD’s point below.

      1. LarrytheG Avatar

        re: ” So, I hereby amend my post to contend that the lockdowns mandated by Governor Northam and nearly all other U.S. governors, are, by social justice standards, racist.”


        I wonder if black folks agree? Does that mean the old white guys views are the correct ones?

    4. TooManyTaxes Avatar

      Systematic Racism is the excuse not to hold local public officials responsible for their failures, most especially to manage the police. Minneapolis, Louisville and even Fairfax County where a policeman tasered the wrong black man.

  5. LarrytheG Avatar

    Many enterprises these days of people of color are by their nature – service – which usually means services to people directly and thus social distancing can be an impact. They are not alone. It’s any/all business of that nature.

    And all entrepreneurs, regardless of color are impacted and yes, some people of color are not “poor”… the stereotype Jim is using to associate black folks as poor folks. There are more and more black folks these days that are middle class… even wealthy…. especially entertainment and sports figures – and the businesses they set up from their own wealth.

    If a black sports star own a sports bar – and it was closed as a result of covid19 – was that a “disparate impact and structural racism”?

  6. Peter Galuszka Avatar
    Peter Galuszka

    Jim, I don’t buy this idea of enforcing Virginia parochialism but then I have worked in other states and countries.

  7. Tom Banford Avatar
    Tom Banford

    People that default to name calling have no real argument to make.

  8. LarrytheG Avatar

    well.. you sorta know as soon as you get to “social justice warrior” and “leftists” and the like where the blog post is headed.

    When BR first started, it was not like this… there were almost no name-calling pejoratives, as I recall or at least not near as much as seems these days.

    It was pretty much on point on the issues.

    but over time – more of it has crept in… (or perhaps it was always there and I ignored it)…

    It has always had a racial aspect that I considered not wonderful.

    here’s an example from a few years back on Charles Murray and the Bell Curve:

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