By CultureBanx Team
- The House passes a revised $2.2T HEROES coronavirus stimulus plan
- 43% of Black small business owners cash reserves will be depleted by year’s end
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 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.
Why This Matters: 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. 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.
Only 2% of Black-owned businesses received PPP loans as part of the CARES Act
The newly approved HEROES Act seeks to reinstate the $600 per week enhanced unemployment benefit through January. It would also send a second $1,200 direct payment to most Americans. 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.
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 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.
Situational Awareness: 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.
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