Why A ‘Racial Equity Framework’ For Black People Is Needed With Coronavirus Stimulus Package

Why A ‘Racial Equity Framework’ For Black People Is Needed With Coronavirus Stimulus Package

In an op-ed, two Washington commentators call for fair distribution of the CARES package

Published April 23rd

Written by Madison J. Gray

The social distancing guidelines being encouraged by federal public health officials come decades after a more insidious type of social distancing that has left African Americans at a socio-economic disadvantage, say two social commentators.

In an opinion piece written for CityLab, an urban issues and news web publication, Howard University professor Natalie Hopkinson and Brookings Institution fellow Andre Perry, point out that segregation and discrimination kept Black people away from opportunities to create wealth equity through starting businesses and homeownership, so more stimulus than what is offered in the Coronavirus Aid, Relief, and Economic Security Act (CARES) is needed for the Black community.

The legislation provides economic aid for families and businesses in the form of $2 trillion in relief. The major components include the Paycheck Protection Program, which is targeted at small businesses; Economic Impact Payments of up to $1,200 per adult for individuals making less than $99,000; and payments to state, local and tribal governments to help them navigate the crisis.

“Congress should also pass a relief package for people who’ve suffered from the de jure and de facto social distancing of racial segregation, which still sets African Americans apart from white people today on both a spatial and economic basis,” the editorial says.

While the CARES package provides for arts funding, like the $25 million earmark for the Kennedy Center for Performing Arts, but community-based staples that African Americans have long depended on have still not seen similar funding.

“Black barbershops and beauty salons —  institutions that allowed black communities to survive segregation and legal exclusion for decades — are struggling. Where’s their bailout?” Hopkinson and Perry ask.

The owners of Ben’s Chili Bowl, considered a Washington D.C. African American community institution, told news outlets on Wednesday that it is struggling to stay afloat while waiting for federal funding.

“We applied for the PPP (Paycheck Protection Program) loan and unfortunately, it did not get through yet,” said Sage Ali, whose family runs the U Street corridor diner.

RELATED: Ben’s Chilli Bowl Struggles To Stay Afloat After COVID-19 Outbreak

While the CARES act is capable of loaning businesses up to $10 million per business through the Small Business Administration, there are still obstacles for many African Americans who would like to participate, they say.

We need to consider the structural issues that often prevent black businesses from participating in these stimulus efforts,” Hopkinson and Perry explain. “Black people represented 12.7% of the U.S. population, but only 4.3% of the nation’s 22.2 million business owners in 2012, according to analysis derived from the latest Census Survey of Business Owners. Asian Americans accounted for 6.9% of business owners and 4.8% of the population, while Latino or Hispanic Americans accounted for 12% of business owners and 16.4% of the population. 

“Meanwhile, only 1% of black business owners were able to obtain loans in their founding year, compared with 7% of white entrepreneurs, according to Brookings and Gallup research,” they said.

The two writers call for a “racial equity framework” to fairly distribute financial support that would reach African Americans who are in need of financial support for their businesses.

“The Covid-19 pandemic has shown that we have a moral imperative to distribute resources based on racial equity,” the article concludes. “When the most vulnerable communities are healthy, then all communities are better off. “

Photo: Getty Images

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