In New York's Harlem, small businesses reel from coronavirus toll on Black communities

Record ID: 1562346

  • Title: In New York's Harlem, small businesses reel from coronavirus toll on Black communities
  • Date: 14th July 2020
  • Summary: NEW YORK, NEW YORK, UNITED STATES (JULY 8, 2020) (REUTERS VIA ZOOM) (SOUNDBITE) (English) BARNARD COLLEGE, ASSISTANT PROFESSOR OF ECONOMICS, BELINDA ARCHIBONG, SAYING: "So, people are dealing with a number of things. So, first of all, of course, there's the lockdown. Nobody's buying. Nobody's consuming. A lot of these stores, you know, Black business owners tend to be small, smaller businesses, right, within their own neighborhoods. You know, Black people, in general, are being more hard-hit by the pandemic, and so people are spending less, right? And that's affecting black business owners who already had to shut down or experiencing, you know, these kinds of shortfalls in demand as a result of the pandemic. So, when you add that to the fact that also people tend to have less access to credit, so black businesses tend to have less access to credit than their white counterparts for a number of reasons, historical reasons, but also the fact that you know, even with the coronavirus, the CARES Act, the aid package that was given to small businesses, a lot of this is going through big banks, right? Which many black business owners do not have existing relationships with."
  • Embargoed: 28th July 2020 15:04
  • Keywords: Black business COVID-19 Harlem Sylvia's business coronavirus disease pandemic reopening restaurant
  • Location: NEW YORK, NEW YORK, UNITED STATES
  • City: NEW YORK, NEW YORK, UNITED STATES
  • Country: USA
  • Topics: Health/Medicine
  • Reuters ID: LVA002CMS8DVR
  • Aspect Ratio: 16:9
  • Story Text: Sylvia's, a soul food restaurant on Malcolm X Boulevard in Harlem, New York, saw a welcome bump in donations and revenue from new customers in early June following calls to "buy Black" after the death of George Floyd.
    But the increase didn't help the 58-year-old landmark restaurant turn a profit. The coronavirus pandemic has limited its operations, forcing the Harlem staple to lay off most of its staff and slash revenues.
    Owner Tren'ness Woods-Black welcomed the publicity but said she is more concerned about her core clientele, a devoted group of mostly Black patrons who used to dine at the restaurant every day.
    While the restaurant industry is expected to take two to three years to return to pre-COVID-19 revenue levels, Woods-Black said it would take even longer for spending among Black Americans to bounce back.
    Woods-Black is one of many Black business owners in New York who fear that the disproportionate economic impact of the coronavirus pandemic on their communities might be long-lasting. Many are worried the number of black business owners in the city will shrink even further. Though Black Americans make up 22% of New York City residents, they account for only 2.1% of business owners, according to city data.
    Harlem Skin and Laser Clinic and nail salon Junie Bee Nails are just a few of the local Black-owned businesses in the neighborhood that have decided to shutter their locations permanently.
    Black buying power grew to $1.3 trillion in 2018 up from $320 billion in 1990, according to the latest data by consumer research firm Nielsen. But spending power and consumption are expected to decline, as Black Americans bear the brunt of the crisis due to a longstanding wealth gap and lower access to financing, education, healthcare, and homeownership.
    In Harlem, where 56% percent of the population is Black, lines for food pantries have wrapped around blocks.
    Other cities with large black populations have been disproportionately hit. Detroit, which was nearly 80% Black as of the last census data, had an unemployment rate of 23% in May compared to the national average of 13%. New Orleans, with a Black population of 60%, had an unemployment rate of 16% in May.
    A few blocks away from Sylvia's, Mark and Katrina Parris are planning to pivot their lifestyle store NiLu to be more online.
    The economic hit to the neighborhood is already visible. Seeing an increased need, Sylvia's converted its restaurant into a food pantry on Sundays, when other pantries were closed.
    Concern among Black business owners in Harlem often stems from past experiences.
    Karl Franz Williams, the owner of cocktail bar 67 Orange Street on Frederick Douglass Blvd., had to close his first venture during the 2008 financial crisis.
    During the pandemic, Williams secured a loan for his business through the Paycheck Protection Program. But he is concerned about what will happen after the programs run out.
    Just 6% of Black business owners surveyed this year by the Association for Enterprise Opportunity said their primary source of credit came from banks, versus 23% for all businesses. When approved, the median loan amount for Black business owners was less than half of the loan amounts extended to white peers, according to the survey.
    Connie Evans, AEO's president and chief executive, said availability of capital to Black-owned businesses has improved since 2008, but she urged lenders to do more.
    Many U.S. financial companies in have pledged funds in support of the Black community amid protests that erupted since Floyd died on May 25 after a Minneapolis police officer kneeled on his neck for more than eight minutes. Bank of America Corp recently pledged $1 billion to address racial and economic inequality.
    Still, some Black business owners voiced skepticism that support for the community would be sustained.
    Tiffany Bowen, owner of Harlem Hookah on Malcolm X Blvd., who secured a PPP loan in the second round of funding to settle rent and salaries when her business closed, said she "heard these stories before," but the numbers were still poor for Black businesses.
    (Production: Aleksandra Michalska)
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2020. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register