Black businesses were hit particularly hard when the pandemic struck in 2020. As the odds grow for another recession, how might Black-owned businesses fare?
Getty ImagesBlack businesses were hit particularly hard when the pandemic struck in 2020, but they rebounded relatively strongly in 2021 compared to other ethnic groups, research shows.
As the odds grow for another recession, how might Black-owned businesses fare? What are they doing to prepare? Will the flood of support, such as the “Buy Black” movement, hold firm during an economic storm?
For(bes) the Culture checked in about this topic with a few Black business owners and experts.
One was Kevin Cohee, the CEO of OneUnited Bank, which bills itself as the largest Black-owned bank. He said Black America is better positioned to weather a downturn now than they had been in the past. The economic strength of this demographic will help dictate the fortunes of many Black-owned businesses, especially those like OneUnited. “We're moving further and further away from the old model of …last ones hired and the first ones fired,” Cohee said about Black America.
But there still may be some vulnerabilities for Black business owners, said Robert Fairlie, a professor at University of California, Santa Cruz. “If we do slip into a recession, I predict that it will be bad for Black-owned businesses,” Fairlie tells Forbes. He added that many such businesses already struggled through the pandemic “and don't have large cash reserves, owner wealth, or access to bank credit to weather another recession.” Read more here.
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Bazaar Los AngelesAre Black Businesses Ready For Another Recession? Although the ranks of Black business ownership rebounded fairly strongly following the 2020 recession, many still have some of the vulnerabilities that existed before, such as low cash reserves and difficulty accessing credit relative to other groups.
NEW YORK, NEW YORK - JUNE 14: (L-R) Rocky Harris, Yvette Noel-Schure, Sunny Hostin, Valeisha Butterfield Jones and Huma Abedin attend Forbes' Queens Of Culture: Legends Of Business at Forbes on Fifth on June 14, 2022 in New York City.
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