Kori HaleContributor
I’m the CEO of CultureBanx, redefining business news for minorities.
As democrats and the Trump administration struggle to strike a relief deal, the House passed a revised $2.2 trillion HEROES coronavirus stimulus plan. It’s still unclear if this new bill will be race conscious for Black and Latinx citizens who have been systematically denied wealth and racial equity building opportunities to begin with. Since racial disparities are primarily produced and maintained by colorblind policies and practices, it’s possible this new bill may not address lingering concerns leftover from the first stimulus CARES Act.
The Breakdown You Need To Know:
The House’s HEROES Act probably won’t get through the Republican held Senate that has its own stimulus bill, the HEALS Act which like the aforementioned bill includes money for a second stimulus check of up to $1,200. CultureBanx noted it’s important to clear up the stereotype that Black people use these benefits more than others, when in fact white Americans have always been the largest share of safety net beneficiaries. However, policies like these may reflect structural economic and racial inequities that have caused the median Black American household to earn about 59 cents for every dollar earned by the median white household, and why some in the Black community are on the verge of financial destitution.
The newly approved HEROES Act seeks to reinstate the $600 per week enhanced unemployment benefit through January. Additionally, the bill would authorize more money for a second round of Paycheck Protection Program (PPP) loans for the hardest-hit businesses and industries, among other initiatives. Let’s focus on the PPP program because only 2% of Black-owned businesses received PPP loans as part of the CARES Act, that’s funded 4.9 million loans totaling more than $521 billion.
Protecting Black-Owned Businesses:
Unfortunately, PPP payments included in the CARES Act failed to adequately reach Black and Latinx business owners. The application process was run through commercial banks, primarily benefiting those companies with existing relationships. Goldman Sachs GS -0.4% found that 31% of Black small business owners have seen less than 25% of their pre-covid revenue return. The financial firm also noted that 43% of Black small business owners say their businesses’ cash reserves will be depleted by year’s end. A recent survey of Black and Latinx businesses found that about 12% received the assistance they requested.
Then there’s the joblessness issue, among Black people in September 2020 it fell down to 12.1%, from 13% in August 2020, though still higher than any other ethnic demographic. Despite having the highest rates of unemployment in the wake of the pandemic, Black workers have received unemployment benefits at about half the rate of their white counterparts, according to ProPublica.
If for some reason the Senate does decide to get behind this HEROES bill, making race-conscious fixes to the distribution of further stimulus checks by the IRS is imperative. A study by the Urban Institute found discriminatory outcomes with stimulus checks that were delivered faster to wealthy whites than to Black and Hispanic families as well as to lower-income households. Specifically, three-quarters of White adults received their checks by late May, compared with 69% of Black adults and 63% of Hispanic adults.
Situational Awareness:
The nonpartisan Tax Policy Center, concluded that while the rollout of the cash payments was a success in many ways, there were significant disparities by income, race, ethnicity and family citizenship, in terms of who received the money. Also, people of color are more likely to be “underbanked” or “unbanked” compared to white consumers. These same issues could pose challenges again when lawmakers decide to send out a second round of stimulus payments, as expected.
Centering racial equity in a new stimulus bill is crucial since the $600 per week supplemental unemployment benefit, federal moratorium on evictions and window to apply for PPP loans all expired weeks ago. We need legislation to not overlook marginalized unbanked communities, who are most vulnerable to the pandemic quickly.
