This is a critical time for all of us, particularly Boston’s black community. Not only does the COVID-19 pandemic threaten our lives at disproportionate rates, but the economic standstill threatens our livelihood as well.
When we surveyed members of the Black Economic Council of Massachusetts (BECMA) in early March, we found that over 90 percent of respondents were already facing a somewhat to severe financial impact; over 60 percent only had cash reserves to last them up to 90 days, if at all; and over 40 percent would have to lay off staff in order to temporarily survive. This was close to two months ago.
Our business community was already in a precarious situation. Systemic racism kept us from accessing needed capital to start or stabilize our ventures, and structural barriers kept us from being awarded lucrative contracts. With a stay-at-home advisory shuttering our businesses, and fundamental flaws in relief programs keeping us from obtaining emergency funding, the black business community faces its most dire threat.
An April 2020 report from the Brookings Institution noted that, “Although [minority-owned businesses] were more likely to shutter during the Great Recession, they helped stabilize the economy during the recovery period. Nationally, [minority-owned businesses helped to] add 1.8 million jobs from 2007 to 2012, while firms owned by white males lost 800,000 jobs, and firms equally owned by white men and women lost another 1.6 million jobs.” It is clear that when we invest in black- and other minority-owned businesses, not only do those communities thrive, but the entire economy is saved.
Federal programs are not enough to preserve our business community. This week, the second round of the Paycheck Protection Program opened up for new applications with $310 billion available in emergency capital. However, glaring defects in the original CARES Act were not corrected, and so this program is poised to leave black businesses out in the cold once more.
Boston cannot wait. It is profoundly important that the city balance its efforts to address the immediate public health crisis with an effort to protect black-owned businesses. If quick and decisive action is not taken, we could see the deepest growth of the racial wealth gap in our time, which would have short- and long-term effects on both the health and wealth of our entire city long after the virus has passed.
In order to ensure the city appropriately addresses the needs of our businesses, it is imperative that they move forward in the following ways:
Financial relief for small- and micro-businesses
Earlier this month, the city of Boston opened its Small Business Relief Fund. This was a much-needed lifeline for our businesses. The city must continue to utilize all funding resources available in order to reopen this process to those who could not originally participate. There must also be an effort to reach businesses that are not online and therefore cannot access the application.
Additionally, the city should support local efforts like the Business Equity COVID-19 Emergency Fund, which is focused specifically on providing capital and crisis support to black and brown businesses throughout the area.
Rent and mortgage moratorium
Last week, Governor Charlie Baker signed into law a temporary moratorium on evictions of renters and business owners. The efforts of grassroots organizations like City Life/Vida Urbana and other activists ought to be commended for their monumental work. Our local elected officials can strengthen this legislation by compelling banks to put a halt to mortgage payments for landlords across the city. While stopping evictions is important, this does not stop rent from accruing. If we don’t ease the burden on landlords, and thus their tenants, a threat of mass evictions could be looming, creating another crisis.
Equitable procurement practices
A year ago, a City Council hearing exposed the shameful lack of contracts the city had awarded minority-owned businesses. We now have an opportunity to ensure that our businesses are connected to lucrative contracts to not only help our community get through this crisis, but to be part of the recovery efforts. Priority must be given, technical assistance provided and barriers removed to give our businesses fair access to city contracts. Anything less would be dereliction of duty.
It is imperative that Boston act now to protect our black-owned businesses, for the development of some communities cannot coexist with the underdevelopment of others. Black businesses — which make up a quarter of Boston’s business community — have waited long enough for swift action. Only then can we truly be “Boston Strong.”
Segun Idowu is the executive director of the Black Economic Council of Massachusetts (BECMA)
