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New research shows Black-owned businesses impacted more than others amid pandemic

African American communities supporting local businesses during crisis
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Posted at 12:11 PM, Feb 12, 2021
and last updated 2021-02-12 14:11:38-05

At Welton Street Café in Denver, Colorado, staff is serving up much more than food. They’re making customers feel like family.

“It’s one of the last things that we have in our community to keep going,” said one customer.

While this Black-owned business might be the cornerstone to this community, COVID-19 has hit it hard.

“It hasn’t been easy, especially with this pandemic,” said Fathima Dickerson, who helps run the restaurant.

Dickerson says restaurant sales surged during the Black Lives Matter movement last year.

“It was crowds of people,” she said. “It got to the point where I’m outside like, ‘look here!’”

Once that movement started getting less attention, however, sales to people from outside of the area started dropping.

“I’m still grateful,” Dickerson said. “We had a lot of people come down and donate.”

Now, many members of the African American community are going out of their way to make sure Black-owned businesses like this stay supported.

“Our community is a little more spread out since gentrification, but we still make our way, I come from Aurora to make sure this business is supported,” said customer Charles Watkins. “If we don’t have a sense of our own group economics, we have nothing.”

Sometimes, however, self-support isn’t enough.

According to the U.S. Census Bureau, there are 2.6 million Black-owned business in the United States.

While the pandemic impacted entrepreneurs across all demographics, the Small Business Association reports that Black-owned businesses saw three times the decline in business activity compared to other owners.

Economic experts say consumers are becoming more selective.

“They shy away from Black businesses faster than going away from other businesses,” said Kishore Kulkarni, Ph.D., a professor of economics at MSU Denver.

Kulkarni says this loss in sales has many impacts.

“That’s what we call the multiplier effect,” he said. “And the multiplier effect tells us because one business is not buying from another business, the whole supply chain gets affected.”

Despite the financial struggles, Kulkarni says this affect could be reversed if more people start buying from Black-owned businesses, something that Welton Street Café and its customers are fighting for.

“We can have hope, we can have prayer, we can have wishes all day,” Watkins said. “But without something tangible like finance to be able to back up our community, we have truly nothing.”