Underrepresented businesses hit harder during COVID-19, UT report shows

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Photo Credit: Maria Perez | Daily Texan Staff

Business owners from underrepresented communities are struggling to recover during COVID-19, according to a report from a UT think-tank.

The “State of The State of Texas Report,” published by the IC2 Institute, compiles COVID-19 research and economic recovery data from across the state. According to the report, while overall business ownership saw a 22% decrease since the pandemic began, Black-owned businesses decreased by 41% and Latinx business ownership decreased by 32%.

Senior research scientist James Jarrett said while historical inequities and disparities play a role on businesses owned by underrepresented communities, minority-owned businesses also tend to be smaller.  

“Some of the disproportionate impact on Black and Latinx business, … that’s because those businesses tend to be in industries that were particularly hard hit early on in the pandemic.” Jarrett said. “They have lower revenues, lower profits, and in terms of percentages. There aren’t as many that are incorporated.”

Shirin Metayer, communications and event manager for Bahadi’s Chicken and Lounge in Pflugerville, said in an email the COVID-19 pandemic wreaked havoc on their business after restaurants began to close in March.

“It was devastating to our bottom line, our customers and overall business since we had to scale back hours, shorten the menu and eventually close that location,” Metayer said.

Bahadi’s Chicken and Lounge is a southern-style food truck as their brick-and-mortar location is currently closed, according to their website. Metayer said that being a Black business owner comes with its own unique set of experiences.

“(It is a challenge) trying to ensure we continue to incorporate all races and be open-minded to our customer base,” Metayer said. “The opportunities are endless, I feel, and it's just breaking those barriers down in order to achieve it.”

 

Metayer said that while COVID-19 doesn’t discriminate, she is not immune to the everyday challenges of discrimination.

“I feel, though, that being a minority, we struggle with our audience or fellow minority customers who do not support Black-owned businesses as much as they do with other businesses,” Metayer said. “I feel minority-owned businesses are way over scrutinized than they should be, and that can cause impact on support from others.”

Jarrett said the IC2 Institute used data from an June report from the University of California, Santa Cruz and drew their own conclusion. He said the institute is working statewide to use the data to generate solutions for aiding in economic recovery, such as a resource guide for the Austin metro area.

Business senior Stephenson Gokingco works in research at the Historically Underutilized Business program in Travis County and identified specific areas where businesses could be aided.

“Community banks or the community financial institutions were the most help when it came to the crisis,” Gokingco said. “They were the ones who said, ‘Okay, here are the infographics that you need to navigate this COVID crisis.’”

Metayer said there is support from the community, but there is still work that needs to be done in supporting underrepresented business owners during this time.

“(We need) more grants, more funding and better resources for small businesses in order to keep his or her business afloat,” Metayer said. “COVID has really hit every industry in different ways.”