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Madison: Dreams on the line: Many business owners of color were already operating with little room for error. And then the pandemic hit.

Madison, March 3, 2021, Dreams on the line: Many business owners of color were already operating  with little room for error. And then the pandemic hit.

While the pandemic has turned much of the economy upside down, its toll on businesses has been far from evenly distributed. Much as people of color make up a disproportionate share of those hospitalized and killed by the virus, business owners of color, like Crowell, are disproportionately concentrated in the service industry, arguably the part of the economy most affected by the pandemic.

And just as people of color faced increased risk due in part to pre-existing health conditions and unequal access to health care, many business owners of color were already operating with little room for error, enjoying less generational wealth, less access to bank loans and less help from professional accountants or lawyers than their white counterparts.

In 2018, when the National Community Reinvestment Coalition sent “mystery shoppers” with nearly identical business profiles and strong credit histories to seek business loans, Black and Hispanic applicants received worse customer service and faced more questions about their businesses than white applicants did. A follow-up experiment tracking differences by gender found that “women in general faced a tougher loan application process than men – and Black women faced the toughest of all.”

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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