The coronavirus pandemic could hit minority-owned business the hardest

Posted Apr 21, 2020

Tonnie Rozier has made cupcakes for Jay-Z, Diddy, and many other stars. He’s become a prominent business leader in Downtown Newark over the last 15 years.

But just like several other small companies in Brick City (and beyond), his local bakery, Tonnie’s Minis, hasn’t been immune to the ill effects of the coronavirus lockdown.

“We’re in a position where it’s frightening for all of us,” Rozier told NJ Advance Media.

While many restaurants and bakeries are still operating by receiving take out and delivery orders, a data-driven study by The NPD Group found U.S. restaurant transactions are down nearly 40 percent compared to this time last year.

“For me it’s very catastrophic,” Rozier said. “I do whatever I can whenever I can. When someone calls me with an order, I fill it. We’re no longer making deliveries because of that fear (of coronavirus).”

And the consequences of COVID-19, may hit businesses owned by minorities and women harder than others, according to an analysis by The Brookings Institute. Historically, “economic shocks," like the pandemic currently jolting the nation, disproportionately impact Black-owned small companies. Following the Great Recession, nearly a decade ago, only 49% of Black-owned businesses survived until 2011, compared to 60% of white-owned businesses, the study said.

Black people also have a higher risk of being infected by the coronavirus and dying from the disease, according to the nation’s leading health expert, Dr. Anthony Fauci.

Dr. Fauci spoke about this on Power 105.1′s “The Breakfast Club” this week: “So many of the things that were founded in varying degrees of racism over decades and decades...has now, in fact, created sociological conditions that put African-Americans in situations of economic, employment and living conditions that immediately puts them in a situation where it’s more difficult for them to even avoid infection.”

This hit close to home for Rozier.

“In the past ten days, I’ve had eleven (people), who I know...pass away,” Rozier said. “unfortunately all African-American.”

The heightened health risk could factor into how much money people spend at local businesses, some Black business owners in Newark believe.

“The reality is people in my community can barely afford to provide three meals a day for themselves and their families. The people in my community don’t know what’s going to happen after the end of May,” said Isabel Livingston, owner of a small clothing boutique called Closet Savvy. “So of course they are going to be very tight with their money in this season.”

Source of Knowledge Bookstore, a cultural and educational pillar in Newark — and one of only two Black-owned bookstores in the Garden State — has fallen on hard times due to the coronavirus lockdown. The owners, who are all well-known in the community, also know several people who have succumbed to COVID-19.

“Not one day has passed that I have not lost somebody that I know,” said Patrice McKinney, one of the store’s owners.

The store which was awarded the NAACP Newark’s “Small Business Champion” award last year for its community advocacy is now asking the community for support, after it was forced to close like all other non-essential businesses.

McKinney, along with co-owner, Masani Barnwell and the store’s founder and co-owner, Dexter George, have started a GoFundMe to help pay for overhead expenses.

“We’re doing anything by any means necessary to make sure that Source of Knowledge stays here,” George said.

As of press time, it’s raised more than $5,300.

“We have flatlined,” Barnwell said, talking about the store’s expenses like mortgage payments and credit card bills. “So the (GoFundMe page) is to bring us back so we won’t be depleted, and we won’t have to take (these books) off the shelf for good.”

McKinney said she’s spoken to owners at other local businesses in Downtown Newark, like Deborah Petty of De’borah’s Jazz Cafe about collectively creating a strategy to help each other successfully re-open when the time comes.

“It’s going to take us to save us,” said Petty, referring to black-owned businesses collaborating. There was some discussion about patronizing each others’ businesses and whether shops should stagger their re-opening when the lockdowns are lifted.

Some Downtown small business owners have also been skeptical about aid from the Federal Stimulus Bill directed at small firms, in the form of low-interest loans. The loan initiative, the Paycheck Protection Program, ran out of money last week, according to the Small Business Administration.

" You might be still paying off something from the past and then you’d go right back in debt," Petty said. “Financial counseling will be key for all these small businesses.”

Livingston, echoed Petty’s sentiments.

“I’ve applied for funding, we’re just waiting to hear back, and (it’s been) nothing. We’ve really been sitting here at the mercy of our landlord,” Livingston said.

But not every black-owned business in town is on the brink of shuttering. The owners of AQUA PHit Water Bar, located in Newark’s University Heights section, said people have become more interested in the shop’s nutritional products since the lockdown has been enforced.

“Our platform is based upon keeping your immune system healthy, that’s our motto,” Borroughs said. “So it makes sense that when there’s a pandemic or something that attacks your immune system, that you’d shop here.”

As many minority-owned businesses in Newark hoped to re-open soon, they said there’s no doubt this pandemic will change how business is conducted in the long-run.

"We can forget about how we ran restaurants in the past because this will be around for quite awhile,” Petty said.

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