COVID-19 Pandemic Takes A Financial Toll On Black And Latino Communities
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Statistics show that people of color are at greater risk for health complications of COVID-19 because of underlying systemic and social factors. There's a similar disparity when it comes to family finances, plainly visible wherever people are seeking help.
Take Charlotte's largely African American west side, where a long line of cars waited one day last week at a drive-in food pantry set up by Loaves & Fishes. West side resident Alisa Lockhart came to collect one of the free boxes of vegetables, meat and bread.
"I'm here today picking up food for my family," Lockhart said. "I have an elderly father that I support. And so the produce, the food, the things that I pick up here, I'm able to help serve him and just make sure he has what he needs."
Her father isn't the only one in need. Lockhart said she's lucky she still has an office job at a financial services company. But several family members are out of work. Her daughter lost a job with Amazon Prime. A nephew got laid off from his third-shift job on the loading dock at a trucking company, when business fell off during the shutdown.
"So those are the different effects that we're dealing with in my immediate family," she said.
Multiply that many times and you have a picture of the pandemic's economic effects for Black and Latino residents.
"If you're questioning whether racial inequities exist in our community, look no further than who we are feeding," said Tina Postel, executive director of Loaves & Fishes, which runs 41 food pantries in Mecklenburg County. Because of COVID-19, the organization closed its brick-and-mortar pantries, and shifted to drive-thru pickups like the one last week off Tuckaseegee Road.
Postel said 85% of Loaves & Fishes clients right now are people of color, up from 80% last year. Forty-six percent are Black, 39% Latino. They are "people who are living in marginalized communities, aren't making a livable wage, and are struggling to put food on the table," she said.
Charlotte's Latin American Coalition is also seeing an increase in demand for services.
In response to the pandemic, the organization started a Spanish-language helpline in March to assist clients in finding benefits, housing and other needs. Difficulties paying rent are the most common calls, said coalition director José Hernández-Paris.
"Calls go up at the end of the month and beginning of the month period, looking for financial support for the rent specifically, and other things," he said.
The helpline got about 3,000 calls in the first few months, and continues to get 200-250 calls a week specifically related to COVID-19 assistance, Hernández-Paris said. Because Latino residents are more likely to rent than own their homes, evictions are a big concern, he said.
"Even though there are (eviction) moratoriums and things like that, people were still getting evicted," Hernández-Paris said. "People (are) calling our helpline from their cars saying, 'I'm in my car with two kids and I have nowhere to go. We just got kicked out.'"
Unemployment On The Rise
Like Lockhart's family, many people of color are dealing with lost jobs or lost wages as their jobs are eliminated, hours are cut or their small businesses fail. And that's showing up in the numbers, too.
Black residents accounted for the largest percentage of ongoing unemployment claims in North Carolina as of September — 43%, according to the state Unemployment Insurance Claims Dashboard. Black people are just 22% of the statewide population overall, which shows the disproportionate effects of pandemic.
White residents made 42.6% of claims, even though they are 70% of the population. Hispanic residents were 6.6% of claims, but 9.8% of the population. More than half of claims are related to COVID-19, according to state officials.
A Harvard University survey last spring found that 58% of Hispanic households and 53% of Black households saw their incomes fall in the first few months of the pandemic. By contrast, 39% of white households and 44% of Asian households reported losing income.
Even as the economy has improved slightly this fall, unemployment rates among Black and Latino workers are well above the national average. The national unemployment rate was 6.9% in October. The rate among Black workers was 10.8%. Among Latinos it was 8.8%. For white workers, it was 6%.
Underlying economic factors have amplified the pandemic’s impact on Black and Latino workers. Before the pandemic, both communities historically reported higher unemployment rates, significant wage gaps and lower household incomes than their white counterparts. Nationally in 2018, the median household income for Black families was $41,692, compared with $70,642 for white families, according to the Economic Policy Institute.
In 2018, Black residents were 34% of Mecklenburg County's poor, and Hispanic residents 20%, according to U.S. Census data.
Black and Latino families often have only one earner per household and tend to have lower cash reserves to weather layoffs or lost income during the pandemic, according to the Economic Policy Institute.
Many Latino workers are in lower-wage service jobs or construction, which can't be done from home. And they're more susceptible to furloughs or layoffs. Even if they can keep working, when COVID-19 strikes a shop or construction site, that means a loss of income.
"They don't have personal time or vacation time or anything to cover or get paid while they're not working," Hernandez-Paris said.
He cites one more concern the Latin American Coalition has been hearing: Latino immigrants are often supporting families in their native countries.
"They're not only taking care of themselves here and trying to survive, but they're sending money home to communities where they're even more strict," Hernández-Paris said. "In some other countries, for example, they're using military on the streets to make sure that people are staying home. So the only way in which they're getting some support is from family members here. So it makes it a double challenge for many of our families."
Small Businesses Struggling, Too
Just as with individual households, Black- and Latino-owned businesses have also suffered disproportionately amid the COVID-19 pandemic.
A Stanford University study found that 32% of Latino-owned businesses and 41% of Black-owned businesses across the country vanished between February and April 2020. That’s compared to 17% of white-owned business.
Losses were higher than the national average because many of those businesses were concentrated in the restaurant, hotel and transportation industries, which were devastated by the shutdowns that swept across the country.
In Mecklenburg County, broad numbers are hard to come by. But Rocio Gonzalez of the Latin American Chamber of Commerce estimated that 10-15% of the organization's 400 members have gone out of business since March.
"There's many members, there's many businesses that are closing," Gonzalez said.
Many others have said they can't afford to keep paying the group's annual dues, which range from $150 for a microbusiness to $1,000 for a corporation.
For some businesses, COVID-19 has forced new business models.
"We have seen many of them switch and shift to producing items that are needed right now," Gonzalez said. She cited a printing company that used to print pamphlets and booklets for events that now makes fliers related to COVID-19 safety.
The Latin American Chamber itself has shifted from education and advocacy for businesses to running food distribution programs in the Latino community, thanks to city and private grants.
Seeking Federal Aid
Getting federal assistance also has been difficult for many, though it's hard to quantify the problem.
When federal officials released data in July showing which local businesses got Paycheck Protection Program loans, most business owners didn't specify a race or ethnicity. Among the 8% who did so in Charlotte, 187 listed themselves as white, 19 Asian, six Black and four Hispanic. That equates to less than 3% that were Black-owned businesses and less than 2% that were Latino-owned businesses.
Nationwide, just 14% of business owners provided their race or ethnicity, according to the Center For Public Integrity. Of that, fewer than 2% of the loans went to Black-owned businesses and 6.6% went to Latino-owned businesses nationwide.
Even with limited data, it appears Black- and Hispanic-owned businesses did not get PPP loans at the same rates as other groups. Again, that likely can be traced back to the challenges these business owners faced before the pandemic. Durham-based research group The Center for Responsible Lending found that banks gave loans to larger businesses and businesses they already had a relationship with.
Charlotte Mecklenburg Black Chamber of Commerce Director Shanté Williams said those relationships are critical.
“If you are a larger company, you probably already had a banking relationship,” Williams said. “You probably already had your financial documents ready. The banker may even have called you and said, ‘Hey, this thing's come in, we’re gonna have you first in line.’”
When the chamber saw Black businesses not getting PPP loans, it stepped in to help by creating its own local grant program. But the chamber was only able to help 15 or 20 businesses in the Charlotte area, which Williams said was just a drop in the bucket.
And, Williams said, a lot of Black businesses went into the pandemic heavily undercapitalized.
“We call it survival mode, really staying in the ‘doing enough to make sure that I can keep the business running and maybe pay myself something, but not thriving,’” said Williams.
To keep their businesses running, Williams said a lot of owners sold equipment, got “side hustles,” or used money they had been saving for years.
Businesses Staying Afloat
That's what happened to Lamont Love, the owner of Blaq Lyte Tattoos in northeast Charlotte. When the shutdown forced him to close his doors in March, he relied on his savings to stay afloat.
“I'm pretty decent with money, you know. So we really weren’t hurting,” said Love. “I mean, you know, I was prepared.”
After being denied once for a PPP loan, Love decided not to reapply. He reopened in May and says his business has rebounded enough to replenish the savings he used while he was closed.
Twenty years ago, Mario Ramirez was among a surge of Latino immigrants who moved to North Carolina seeking better lives. Ramirez opened a photography and videography business in Charlotte focused on events like weddings and birthday parties.
“North Carolina for me has been a market that economically has a lot of potential,” Ramirez said.
Then came the coronavirus.
The first case of COVID-19 was identified in North Carolina on March 3. Nine days later, on March 12, Gov. Roy Cooper urged communities, businesses and residents to cancel events. Then, Cooper issued an executive order banning large gatherings of 100 or more. Ramirez’s photography business dried up as weddings and parties were canceled.
“When I realized this wasn’t going to blow over so quickly, it felt like I was falling into an abyss both emotionally and economically. And I told myself, ‘You have to try to rescue this in the best way possible,’” Ramirez said. “But it was very difficult both emotionally and economically. It put me against the wall.”
Ramirez has made it through the pandemic so far. He squirreled away some savings that he dipped into during the shutdown.
“And that’s what helped me survive during those difficult months,” he said. “Without that, I don’t know where I would be today.”
Pondering A Slow Rebound
As the virus surges this fall, some Black and Latino business owners and workers are worried about the future.
Blaq Lyte Tattoos owner Love said he's focusing on his business and his family — and preparing for a second shutdown.
“If it happens a second time, I mean, all you can do is just basically run with the wave,” Love said. “Do what you have to do, you know, take care of your family and go from there.”
Ramirez's photography business took a huge hit, but he says work is picking up. He’s signing contracts for events in 2021, and that is giving him hope. But Ramirez said he is still not back to where he wants to be.
“We still have that feeling of doubting whether or not they will happen, but at least right now, we’re growing," he said. "Slowly, but I think we’re growing."
Williams, the director of Charlotte Mecklenburg Black Chamber of Commerce, is telling business owners they are going to need “money and patience.”
“It takes money to run a business," she said. “We went through this phased approach of reopening; it takes money to flip the light back on.”
The banks, she said, are going to need to provide the patience.
“I think the patience has to come in where if you’re a capital provider, really allowing people the opportunity to actually get back to work and start generating revenue before you start … pulling your money out of that business,” she said.
Returning To Work
Sederic Banks of Charlotte was among the many people of color who lost their jobs early in the pandemic. He worked for a contractor that supplies food and beverages to the Panthers' and Knights' stadiums and the Charlotte Hornets' arena. He was laid off when those professional sports canceled their seasons.
He was surviving on unemployment checks until two weeks ago. When he ran out of food last week, he sought help at the west side Loaves & Fishes mobile pantry.
But there's a light at the end of the tunnel for him, too. He's been called back to work at Bank of America Stadium, where the Panthers have been permitted to play in front of a small percentage of fans for more than a month.
"I mean, it's been pretty hard," Banks said. "But I'm just glad to be back."
Note: Shanté Williams has been a member of WFAE's Community Advisory Board since 2019.