If Covid-19 cases keep rising in the weeks to come, city and state leaders might reimpose a strict lockdown. They should bear in mind who’d be harmed most by the ensuing economic destruction. From February to April, the number of active black business owners fell 41%, according to an analysis last week from the National Bureau of Economic Research.
“This study provides the first estimates of the early-stage effects of COVID-19 on small business owners,” writes Robert Fairlie, an economist at the University of California, Santa Cruz. Overall, he finds, “the number of working business owners plummeted from 15.0 million in February 2020 to 11.7 million in April 2020.” That’s a drop of 3.3 million, or 22%.
This shock is unprecedented. “No other one-, two- or even 12-month window of time has ever shown such a large change in business activity,” Mr. Fairlie says. “For comparison, from the start to end of the Great Recession the number of business owners decreased by 730,000 representing only a 5 percent reduction.” Judging by the number of active small businesses, the Covid lockdown was the equivalent, in only weeks, of four Great Recessions.
Four big ones. Is it worth it? Does it make a difference?
More here: WSJ