Black-owned businesses reel from a triple blow

Like most in her industry, optician Jessica McClain was looking forward to the year 2020. “Being in the vision business, we had all these clichés,” she says, pausing for effect. “It’s 20-20!”

Needless to say, the year has not gone as planned. The 31-year-old owner of Black & White Look, a shop in Washington, Ms McClain is one of the legions of minority business owners who are wrestling with the fallout from coronavirus, the economic crisis and the current protest movement, and the question of what comes next.

Robert Fairlie, an economist at the University of California, Santa Cruz, has found black business owners have been hardest hit by the pandemic and its economic fallout. Overall, between February and April, the number of working business owners in the US fell by 3.3m or 22 per cent. Among black business owners, the decline was 41 per cent, compared with 32 per cent of Latino business owners and 25 per cent for female business owners.

The relative declines reflect a deeper historical disparity for black business owners. While the percentage of black, Latino and female business owners in the US has risen sharply over the years, according to the most recent census data, there is overwhelming evidence that black business owners face steeper barriers to entry than white business owners.

A recent Brookings report notes that in 2018, large banks approved around 60 per cent of loans to white small business owners versus just 29 per cent for black small business owners. After the 2008 financial crisis, just 49 per cent of black-owned businesses survived, the report notes. For white-owned businesses, it was 60 per cent.

Ms McClain, who is black, says she has seen it all at first hand. The niece of an optician, Ms McClain knew she wanted to go into the business from an early age, attending optical school part-time from the time she was in high school and continuing her studies at university. In most of her classes she stood out. “Not a lot of minorities . . . Even in the field, you’re kind of a dot on a piece of paper.” 

She opened up Black & White, the first DC franchise for her uncle’s business in 2016. The first year, she spent evenings and mornings driving for Uber and Lyft to help make ends meet — handing out her business card to riders. She applied for business loans from two major lenders three times but was rejected. Yet she made it work, leveraging her good credit score to take on more credit card debt.

By the third year, the business was reporting a solid profit. The side hustle as a driver was over and Ms McClain had two full-time employees and an on-site eye doctor. Then coronavirus hit. Customers stopped coming in and she reduced the store’s hours, moving what business she could online. “We just had to readjust but we were still going.”

Three days after Washington DC initiated phase one of its reopening, Ms McClain received a security alert at 2am that the store had been broken into. She and her husband went over in the middle of the night with their one-year-old son to assess the damage and wade through the debris of smashed glass. She cried. “I was just so sad. It’s more than just a break-in . . . I was afraid to talk about it because I don’t want it to take away from what the protests are really about. The items can be replaced. These men who are dying — their lives can’t.”

The police were so backed up with break-in cases that Ms McClain wasn’t able initially to take an inventory of the damaged and stolen goods to send to the insurance company. She set up a page on the crowdfunding site GoFundMe and, in two weeks, has raised more than $24,000 from nearly 500 donations, money to go towards paying her staff, fixing the front window and the lighting and replacing damaged equipment.

Cleaning up the glass, she found the ID of one of the assailants: it belonged to a high-school-aged girl. Another high-schooler, a boy, has been arrested. That is something she is still trying to wrap her head around.

Ms McClain says many of the big retailers targeted by pockets of looting during the protests will survive, but she adds that the employees who might not be able to go to work the next day are people who probably look like her. “They employ us. They employ a lot of black and brown people.” She paused. “That’s a Catch-22 as well.”

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