The disproportionate effects of the pandemic on BAME-led businesses

The disproportionate effects of the pandemic on BAME-led businesses

The disproportionate effects of the pandemic on BAME-led businesses

Official data has made it clear that Black, Asian and minority ethnic people (BAME) are negatively and disproportionately affected by the virus. Similarly, BAME-led and especially small, local businesses have been the hardest hit by the economic effects of the pandemic.

Right at the beginning of the first lockdown in spring, the Black South West Network (BSWN) in Bristol conducted a survey with local BAME-led businesses, social enterprises, and self-employed workers. One of the main concerns voiced by respondents was “maintaining of cashflow and liquidity to cover core expenses”. 90% of them reported significant financial loss. 67% said they had to close their business because they were unable to adapt to home delivery, supply prices were rising, and many lost costumers during lockdown. Due to movement restrictions costumers increasingly chose to buy all their goods from one large shop, rather than multiple small ones, leaving community businesses in an even more difficult situation. Almost half (48%) of all respondents reported a drop in sales and 29% were forced to reduce their staff during the lockdown months.

The businesses that experienced less significant financial loss are within sectors where most of the services were already delivered through online avenues before coronavirus, such as Information Technology and Digital Marketing. Previous BWSN data shows that IT and digital businesses are underrepresented among BAME entrepreneurs, especially when compared to representation in retail businesses and food industries, sectors particularly affected by the economic recession following lockdown. In fact, IT barriers were among the top worries described by entrepreneurs in non-digital sectors who had to adapt to online sales or access online government resources for support.

Other difficulties accessing support also came through in many responses. Using the business rate system to identify the businesses that were eligible for financial support both through the Small Business Rate Relief (SBRR) and grants funding automatically excluded a huge number of entrepreneurs that run businesses from rented facilities, such as public venues or co-working spaces. Government communication about grants coming through post also made it difficult for those that could not access their facilities or people whose first language  is not English.

The sectors most affected by the crisis in the UK (transport, accommodation, retail and food services) with the highest rates of furloughed jobs and redundancies have disproportionate numbers of BAME employees as well as owners. 15% of workers in sectors that shut down because of the coronavirus are from a BAME background, compared to a workforce average of 12%; 57% are women, compared 48% of all workers; and almost half are younger than 35 years old.

Beyond these more immediate issues, the pandemic has made it impossible to ignore structural inequalities in multiple areas, including business. In 2017, an independent report carried out by Sir John Parker into BAME representation on Financial Times Stock Exchange (FTSE) boards set a target that all FTSE 100 companies would have at least one BAME board member by the end of 2021. For FTSE 250 firms, that target was 2024. In February, just before the first lockdown began, Sir John reported that while progress was made “in bringing female leaders into the boardroom, almost a majority of the boards of our FTSE 100 companies remain all-white domains.”

We should take on the lessons on the impact of lockdown measures on inequality as the country is entering into its second closure. Targeted financial support for those that most need it – including BAME communities and those with no recourse to public funds – must be made easily available. Most importantly, such measures must be put in place urgently.

JAN Trust has worked with vulnerable women and young people from BAMER and Muslim backgrounds since 1989 to help them improve their prospects. We advocate for an inclusive and culturally appropriate response to Covid-19 in multiple fronts, including through specific support for BAME-led businesses struggling in lockdown . You can support our work in these challenging times by donating, volunteering or making an effort to buy from local, BAME-led, community-based businesses online or where you can do so safely.