Of course, the legacy of historic oppression was nowhere near erased or overcome; nor was the impact of contemporary discrimination. Black joblessness still exceeded that of whites, and black business ownership rates lagged. Yet the trends were encouraging.
Now, all that has been swept away by the crisis. New economic gains are inherently precarious. And black employment is disproportionately concentrated in consumer-facing service industries and the retail sector, as well as local government — all hit hard by pandemic-related lockdowns. Thus, unemployment among African Americans now stands at 16.8 percent, 4.4 percentage points higher than the rate for whites. Equally worrisome is the damage being done to black businesses. The number of African Americans reporting that they were active as business owners declined from 1.1 million in February to 640,000 in April, a 41 percent drop, in contrast to the 17 percent drop for whites, according to new research by economist Robert Fairlie of the University of California at Santa Cruz.
To be sure, these reports may reflect temporary closures. Nevertheless, the implications for racial inequality in wealth could be devastating, given that small businesses and homeownership are two main sources of the net worth most black families have: Indeed, half possess less than $17,500, one-tenth the white median.
Asked by reporters Wednesday what his institution could do about such disparities, Federal Reserve Chair Jerome H. Powell replied accurately but unsatisfyingly that the central bank lacks the authority or tools to target racial disparities overtly, though it has learned that it can aggressively promote very tight labor markets without inflationary consequences. This may enable it to replicate, later in the recovery, the robust pre-pandemic labor market. Still, elected officials at all levels can and should act.
The economic rebound tentatively underway must be as “V-shaped” as possible for those who have for too long been “last hired, first fired.” Congress should look in particular at revising its Paycheck Protection Program for small business, which still has $130 billion in untapped spending authority. Private foundations and companies can also step up. Former NBA star Magic Johnson’s insurance company, EquiTrust Life, has offered $100 million in financing aid, to be delivered through the PPP.
An act of police brutality triggered the protests sweeping our nation, but the despair and anger they express is also rooted in an all-too-accurate sense that African Americans have been denied a tangible, secure stake in this country’s prosperity. That, too, must change.