The Playing Field is Not Level: Support for Black-Owned Businesses in the East Bay
By Chase McCleary, Floriedaine Paran, Jasia Nicolas, Kavya Jawabnavis, Lachie Wappet, & Marina Newman
As small businesses shutter across the country in response to the pandemic, many fear they will shut down for good. However, small, Black-owned businesses are especially vulnerable.
In addition to COVID-19’s disproportionate toll on people of color, economic inequality and the poor treatment of minority small business owners have left Black-owned businesses with a disproportionately smaller reserve to carry them through the pandemic.
However, in the wake of the Black Lives Matter movement, national outcry has shed more attention on local, Black-owned businesses. Social media has been used widely to circulate information about where to find local, Black-owned businesses in addition to influencers promoting Black-owned products online. Simply searching the hashtag, “blackownedbusiness,” on Instagram yields over four million results.
Mary Celestin, a San Jose native and an engineering student at Harvey Mudd, created a viral illustrated guide entitled, “Let’s Get to Work, San Jose!” in which she encourages locals to support Black-owned businesses by eating at Black-owned restaurants.
Similar posts have cropped up in the last few weeks, and have gained attention particularly among younger users, who use platforms like Instagram more frequently.
Yashvi Tibrewal, a student at University of Southern California, states that she and her family have been shopping at Black businesses more frequently, eating from Black-owned restaurants, and that she has switched from the online platform Goodreads to The Storygraph, a Black-owned online book retailer.
“I think it was always something I had been meaning to do,” said Tibrewal, “But because shopping from small businesses is more work, I had always pushed it off in the name of convenience. Everything that’s happening is a wakeup call that with my privilege, that is the bare minimum I can do.”
At Lemat, an Ethiopian restaurant in Berkeley, only fifteen minutes after opening, the phone rings five times as customers order food for takeout. Though the tables and chairs have long been empty, the restaurant maintains their usual ambience as customers float in and out of the restaurant to pick up their food. Traditional music plays from the speakers, the walls are decorated with colorful, Ethiopian paintings, and the smell of spices and food cooking wafts through the kitchen into the restaurant.
Lemat offers a traditional Ethiopian culinary experience, serving traditional food and recipes and offering an Ethopian coffee ceremony. “I came [to Berkely] not by accident, I wanted to bring back Black culture,” says Gezu Mengistu, the owner of Lemat. “[I] want to continue to play a role despite the impacts of COVID-19…We are trying to be as resilient as we can. We have never closed the door since the pandemic came. It was a conscious decision to make sure our patrons are being served.”
While Mengistu has seen consistent support from loyal customers, he asserts that, “of course, it is not enough.”
The future for small, Black-owned businesses is unclear, and many businesses owners do not know if the support many are receiving from the Black Lives Matter movement will be sustainable.
According to a study by Robert Fairlie at the University of California, Santa Cruz, nearly 40 percent of Black business owners reported that they were no longer operating in April, in the wake of the pandemic, while only 17 percent of white business owners reported that they were no longer working.
Additionally, African Americans are less likely to receive federal relief through the Paycheck Protection Program, which grants loans through banks to small businesses and helps carry businesses through the pandemic. The National Community Reinvestment Coalition (NCRC), found a racial disparity and bias in small business lending from banks in their 2008–2016 study, leaving minority business owners more vulnerable to the already economically devastating pandemic by having less access to credit and funding.
The study sent white, Black, and Latinx test subjects to local Los Angeles banks with similar credit scores and business profiles. However, the white applicants received far better service and less hurdles for applying for a loan.
Bernadine “Pinky” Sewell, owner of Pinky and Red’s on the UC Berkeley campus, recalls receiving unequal treatment when attempting to break into the food industry and receive funding for her business.
“The opportunities are not the same for African Americans in the food industry,” says Sewell. When Sewell first attempted to receive funding for a food truck, she and her daughter were denied funding. “We went to someone who we thought was going to finance us…an older white gentleman, and it was going well.”
However, Sewell states that once they met with their families, they were denied funding. “Behind the scenes, the dad felt like, why should I invest our hard earned money into a Black business…I think that race played a big [part] in that,” said Sewell. “When I say I had to take the back door route, that’s what I’m talking about…because I could not just go to a bank and [present] my business plan and my concept to get funding.”
In the Bay Area, where big businesses have been accused of pushing out small, mom and pop businesses, reinvesting in local communities, and in particular, supporting the Black community by buying from Black-owned small businesses has been identified as a strategy to support the Black Lives Matter movement financially.
“There’s a spotlight now on systematic racism and the injustice, that the playing field is not level” says Sewell. “Hopefully, through all of this, people will see how difficult it is as a Black business owner to survive.”
Authors & Individual Roles:
Chase McCleary (Video)
Floriedaine Paran (Photography)
Jasia Nicolas & Srikavya Jawabnavis (Infographics)
Lachie Wappet (Audio)
Marina Newman (Text)
Sources:
Infographics
Audio
Bernadine “Pinky” Sewell
Video
Gezu Mengistu
Text
Yashvi Tibrewal
Mary Celestin
Gezu Mengistu
Bernadie “Pinky” Sewell
