Study Shows Black, Latino Businesses Saw Outsize Covid Hit to Earnings

Black-owned businesses saw earnings decrease 28% in 2020; Latino and Asian businesses also experienced outsize declines

A "Black Owned Business" sign is displayed in the window of a restaurant in the Bedford-Stuyvesant neighborhood in the Brooklyn borough of New York.
By Catarina Saraiva
October 11, 2022 | 12:01 AM

Bloomberg — Black, Latino and Asian businesses experienced much larger losses in earnings than their White counterparts during the height of the pandemic, likely widening long-term economic inequality, according to a new study.

Black-owned businesses saw earnings decrease 28% in 2020, compared to a 15% drop for White-owned businesses and a 17% overall decline, Robert Fairlie, an economics professor at the University of California at Santa Cruz, wrote in a paper. Latino and Asian businesses also experienced outsize declines.

“The disproportionate business earnings losses among business owners of color in the pandemic contributed to widening broader economic inequality setting back one of the long-term goals of fostering minority business development,” Fairlie wrote in the paper distributed by the National Bureau of Economic Research.

Minority-owned businesses were disproportionately concentrated in the industries most impacted by the pandemic, including leisure and hospitality and trade. For Black and Latino owners, lower education levels also played a role. Asian business owners were hurt by the industry concentration, but higher levels of education among owners helped offset that somewhat, Fairlie found.


Business owners make up 10% of the workforce and are a significant engine in job creation. Minority business owners tend to hire diverse workers, which in turn narrows economic inequality gaps, Fairlie wrote.

“Losses to business earnings may be especially damaging for job creation and economic stability in low-income and disadvantaged neighborhoods,” he said.