Washington (AFP)

Over the past eleven months, Reign Free has done all it can to keep its small catering business open despite the pandemic, a struggle many African American business leaders have faced.

Reign Free took out loans from the US government and looked for new business opportunities.

But she wonders how long her Red Door Catering chain in Oakland, Calif., Will be able to survive the crisis.

"We are collecting crumbs and it is not enough. We still have hope and always try to stay afloat, but really, we are sinking more and more," she told AFP.

Minorities are hit hard by the Covid-19 pandemic in the United States, with higher rates of death, unemployment and business bankruptcies, and less success in obtaining help from the federal government.

President Joe Biden assures us that his $ 1.9 trillion stimulus plan will finance a large vaccination campaign that will allow business to return, and address the inequalities that have worsened during the pandemic.

"It's a big effort," said Cathy Adams, CEO of the African-American Chamber of Commerce in Oakland, about the Democratic president's plan.

Members of the chamber of commerce have managed to avoid the shutdown in recent months, but only at the cost of a considerable struggle.

And the manager fears for their future.

"Imagine if they don't get anything. More businesses have closed, people are homeless: we have been hit hard" by the consequences of the epidemic, she adds.

- Medical background -

The Covid-19 pandemic has wreaked havoc in the United States, killing more than 475,000 people and leading to massive layoffs, with 20.4 million unemployed in January, according to data from the Department of Labor.

And it has also widened the inequalities.

The unemployment rate, which was 5.7% for white Americans last month, stood at 9.2% for African Americans and 8.6% for Hispanics, according to official figures.

Government data also shows that these two minorities have higher disease death rates than whites, and that their businesses are also in greater danger.

A New York Federal Reserve study released in August concluded that at the start of the pandemic, black-owned small businesses had gone bankrupt at a rate twice the national average of 22%.

Businesses owned by Hispanics and Asians also had higher closure rates.

To deal with this, Congress passed the Payroll Protection Program (PPP) in March 2020, offering loans and grants to small businesses, as part of the $ 2.2 trillion relief program of the CARES Act.

But in California, the most populous US state, black and Hispanic neighborhoods received less P3 money than white and Asian neighborhoods, according to a study from the University of California, based in Los Angeles.

- Racial inequalities -

For Rodrigo Dominguez-Villegas, co-author of the study, minority-owned businesses, tending to lack relationships with big banks or experience with such massive government programs, have sought help belatedly, when the funds were already exhausted.

These programs end paradoxically "by worsening the racial inequalities which already existed before", underlined the expert.

Biden's plan intends to maintain the safety net against unemployment, expanded by the CARES Act, and includes support checks of up to $ 1,400 per person, but he faces opposition from mostly Republican lawmakers who find it excessive amount.

For William Spriggs, chief economist of the AFL-CIO trade union federation, this program constitutes "a key element of racial equity by adding additional funds (...), knowing that the duration of unemployment among African Americans is longer than for any other group ".

According to US central bank data from 2019, before the pandemic, an average African American family already had eight times less wealth than an average white family.

The proportion was five times less for an average Hispanic family.

© 2021 AFP