Top Black Business Stories for Week of May 18th to 24th

Economic Indicators:

"Real" Black Employment Rate     24.8%
Unemployment U-3                        14.7%

DJIA                                               24,995

Tyler Perry Plans to reopen studio

Tyler Perry productions plans to re-open it's TV studio this summer. They plan to start production on at least two TV shows. They will follow strict workplace safety measures. 

Study find Black and Spanish businesses are not receiving PPP loans

Unidos US, Color of Change and Global Strategy Group surveyed 500 Black and LatinX business owners and 1200 Black and Spanish workers.  They found that up to 45% of Black and Spanish business owners may close by the end of the year.  More than half of the business (51%) have applied for assistance ($20,000 dollars or less), only 12% got anything.

Here's the press release. You can also view a summary presentation here.

Forbes Magazine has a write-up

CBS News has the story also

Working black business drop by 40% 

The Washington Post reports that Black businesses are having a difficult time during the Coronavirus Pandemic. New research show that in April up to 450,000 active Black businesses have closed.

NAACP call for more PPP lending by congress to Minority Communities

NAACP would like to see more minority lending in the PPP program

How to help Black businesses in Baltimore

Wayne Frazier, writing in the Baltimore Business Journal, has some ideas for assisting minority businesses. 

Robert Smith offers advice on getting PPP loans

Robert Smith appeared on the CBS Morning news with Gayle King. Robert Smith, CEO of Vista Equity Partners, is the richest Black Billionaire in the US with a net worth of $5 billion dollars. He is known for paying off the entire student debt of last years graduating class at Morehouse College. 

Reality TV Personality Charged with Bank Fraud

The justice department charged "Arkansas Mo", real name Maurice Fayne, with Bank Fraud.  He is a reality TV start on Love and Hip-Hop: Atlanta.  He owns Flame Trucking. He is accused of misusing a $2 million dollar PPP loan for personal items rather meeting his business payroll.  

Magic Johnson and NAN help loan $100 Million

Earvin “Magic” Johnson’s Equitrust Funds Over $100 Million In PPP Loans For Minority And Women-owned Businesses

Credit denials by race to be collected

CFPB lawsuit settlement forces agency to collect data oncredit access.

President Trump meets with Black leaders in Michigan

President Trump met with Black leaders in the Ford Rawsonville Components Plant in Ypsilanti, Michigan before touring the plant.

The president read a prepared statement of accomplishments and generic remarks which included his hits: “China is responsible for the virus” and “Black people had the lowest unemployment rate ever.” He ended with remarks opposing mail-in voting.

C-Span has the video

Several of the leaders work directly for him. One leader is a senate candidate in Michigan. Here is a partial list:

Ben Carson Sr., M.D., Secretary Department of Housing and Urban Development

Scott Turner, Executive Director, White House Opportunity and Revitalization Council

John James, Senate Candidate - Michigan

Ja Ron Smith – Assistant to President for Domestic Policy

Karen Whitsett, State Representative, Michigan

Pastor Darrell Scott

You may have missed

City Lab has a good story on under investment in Black neighborhoods. The City Lab link is here.

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Joe Biden released a plan for Black America called “Lift Every Voice”.

The plan address proposes to “improve economic mobility, close racial wealth gaps, improve education, and end health disparities by race." There are also some justice related ideas such as promoting a fairer justice system, increasing voter access and addressing environmental issues.

Our View: While the proposals are certainly needed, it’s a rather small and timid grab bag of extensions to existing programs. It does not do much to tackle underlying issues.  However, given where we are with the Trump administration, the plan is a welcome change of tone and direction.

Interesting People

United Airlines Appoints Brett J Hart as President

Pioneer black architect, Robert Coles, passes away

Other

The Dow Jones Industrial Average rose 500 points to 24,995 on the hopes of opening the US economy and a vaccine.  

National unemployment rate at 14.7%; Non-Farm Payrolls drop 20.5 million in April

Unemployment in April signals long-term problems for US economy; Black Unemployment increases less than expected

The Bureau of Labor Statistics announced depression level unemployment levels in the April employment situation report.  Twenty two million people lost their jobs as the country shut down due to coronavirus. There was wide spread layoffs across all industries and across all racial and gender groups.  During the past eight weeks about 30 million initial claims for unemployment were filled with state labor departments.




The official national unemployment rate was reported as 14.7%.  The real rate is presumed to be around 25% based on weekly unemployment claims. The leisure and hospitality industry was the hit the hardest by the pandemic losing 7.6 million jobs.





There was wide spread unemployment across all worker groups: White unemployment was 14.2%, for Blacks it was 16.7% and Hispanic’s 18.9%. The Hispanic rate jumped 12.9% while the White rate rose 10.2% and the Black rate moved 10%.  It is probably the first time the Black rate rose less than all other rates. Many believe the reason is the type of essential jobs many Black people hold.

Women have lost more jobs than men during the current crisis.  During the last recession, it was men who got hit hardest. About eight million women lost jobs during April as compared to million men. The unemployment rate for women stood at 15.5% against 13.0% for men.  Economist are not sure, but they believe the reason for the higher job losses is that women provide almost all of the child care and they are concentrated in vulnerable industries like hospitality and healthcare.

The labor force participation rate dropped -2.5% to 60.2% and the employment to population (EM) ratio tanked -8.7% to 51.3%. The EM ratio tells us that only 50% of the people in the US are working.

About 18 million people reported themselves as on “temporarily laid off” rather than permanent job losers.  The number of people not in the labor force who want jobs was 9.9 million. Discouraged workers (who have given up looking) stayed flat at 574,000.

The “real” unemployment rate (U-6) stood at 22.8%. U-6 is everyone who want a job or more hours.
The index of weekly working hours fell by 15%.

The diffusion index which captures businesses hiring trends stood at 5 of 100: The lowest ever. Anything above 50 is an expected increase in hiring.  The index was 62 in a year ago (Apr 2019)

The US quarterly GDP is expected to fall by 8% to 10%. The stock market (DJIA) continued to bubble up slowly.  The index was recorded at 23,625 about 2,000 points higher than its Coronavirus low.



Business Survey Results

Non-farms payrolls also lost 20.5 million jobs in April 2020. All sectors and industries lost jobs. Major losses occurred in Leisure and Hospitality, Health and Education, Goods Production and Retail trade.

Certain kinds of business were especially hard hit:  Restaurants and Bars lost 5.5 million positions, Retail lost 2.1 million, Education and Health lost 2.5 million and Business and professional services got rid of 2.2 million workers.




A lot of these losses were expected, but some other areas also shrank.  These are important sectors to keep an eye on: Construction, down -900K; Cars and Trucks(725K), -381K in production and -344K in sales; Air Transport, -140K; Mass Transit, -185K; Movies and Music, -216K; Temporary Work, 842K; Outpatient Healthcare,-1,188,000; Child Care, -336,000; Amusement Parks, Gambling and Recreation, -1,062K; Hotels, -839K and Local Government, 801K.

There were two industries that actually added workers. Can you guess? It was “General merchandise stores, including warehouse clubs and super centers” which added 93,000 workers. And the “Couriers and messengers” category, which added 1,800 people.  The industry sector with the best quality jobs and the least job losses was “Utilities” which shed only -3,000 jobs.

The Black Unemployment Rate

The Black unemployment rate jumped from 6.7% to 16.7%. The number of employed Black workers went down from 19.2 million to 12.2 million a loss of approximately 3 million jobs.

The unemployment rate for Black men, 20 and order, was 16.1% while Black women in the same age group were unemployed at a rate of 16.4%. More than one million Black Women lost their jobs.The Black labor force participation rate another measure of employment fell 4 percentage points to 59%.
The employment to population (EM) ratio fell to 49%.  There are more Black people are not working than working.

For the first time ever, the Black unemployment rate increased less than the White rate.  Also the difference between the Black and White rate fell to 2%, also the lowest ever.  During the 2008 recession, the difference in rate was as high as 7%.

The chart below shows the Black unemployment rate and the black Labor Force Participation.



As is our custom, we calculate the real Black unemployment rate: about 25% in April. Both the Black unemployment rate and the US U-6 rate climbed to record levels in April. U-6 is basically anyone who wants to work and has looked in the past 12 months plus part time people who want full time work.


ADP reported -20.2 million employment changes from March to April: Small Business (1-49) lost -6 million staff; mid-sized companies lost -5.2 million and large companies laid off -8.9 million.

Top Black Business Stories for Week of May 10th to 17th

Top Black Business and Economic Stories for Week of May 10th to 17th

DJIA                                            23,679

Unemployment (U-3,U-6)           14.7, 22.8             

US Covid-19 Growth Rate           ~1.0%

COVID-19

Covid-19 hits Black Community Hard in Philadelphia Area

CNBC on health disparities by race

Washington Post ties “Racial resentment to beliefs aboutCovid-19 and African Americans

Black women are affected the most by the COVID-19 crisis

Black Barbershops and Beauty Salons want to open in California

How are Black businesses in Pittsburgh doing during COVID crisis

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Paycheck Protection Program (PPP) / Small Business Loan Program

Charlene Crowell from the Center for Responsible Lending writes about minority business being excluded from the Paycheck Protection program.

Small Business Program short changes Businesses of Color

Black Businesses have trouble getting PPP loans (Newsone)

The SBA released an audit report of the Paycheck Protection Program.

The Paycheck Protection Program does not even mention minority businesses but it does acknowledge it failed to reach them.  In fact even the word "minority" is used only once in the document which quickly switches to the term: "under served." 

Small amounts of aid to community banks and minority bank during crisis 

P. Diddy helps businesses access the Paycheck Protection Program

Sean "P. Diddy" Combs created a website to help Black business access Paycheck Protection Program. You can view the Our fair share website here.

The Network Journal has the story here.

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Urban Planning 

City Lab has a good story on under investment in Black neighborhoods

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Economic News

Fed Chairman Jerome Powell say economy won’t be back for awhile in a sixty minutes interview

Highlights: 25% unemployment, no V-shaped recovery, demand will be low as people save and at least 20% GDP shrinkage. Long interview with some details.  The usual fed speak, but it was 60 minutes, so the fed is worried about the average consumer(worker a little less) 

He did mouth the administration Trope about: “Lowest Black unemployment ever,” so he loses points. The rate was low because they ran out of people to hire.  Check the participation rate and EM ratio. Also wage are the lowest they have been for 40 years.  Plus job quality of work life stinks. So, they might be jobs, but they sure aren't good jobs. 

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Academic Journals

William Darity at Duke University has a new research paper on the Black Middle Class

Black Economic Alliance  Covid-19 relief proposal

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Unemployment

Lots of Unemployment stories, so we will pick three good ones

BLS April Unemployment Report

The BLS released the April Unemployment report on May 8^th with depression levels of joblessness.  The narrow national unemployment rate was recorded at 14.7%. The boarder, U-6 (everyone who wants to work plus people who want more hours) stood at 22.8%.  More than twenty million payroll jobs were lost.

The unemployment rate for Black spiked at 16.7%, but the Black/White unemployment rate gap narrowed, meaning more Whites were laid off than Blacks (proportionally).

Leisure and Hospitality lost a staggering 7.6 million jobs of which 5.5 million were restaurants and bars.

Unemployment payments continue to lag

Unemployment benefits can exceed salaries for some job categories

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Politics

Joe Biden releases plan for Black America called “Lift EveryVoice”.

https://joebiden.com/blackamerica/

The plan address proposes to “improve economic mobility, close racial wealth gaps, improve education, and end health disparities by race. There are also some justice related ideas such as promoting a fairer justice system, increasing voter access and addressing environmental justice issues.

Our View:  The mild plan is a welcome change of tone and direction.While the proposals are certainly needed, it’s a rather small and timid grab bag of extensions to existing programs. 

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Interesting People

Real Estate Broker, Tiffany Curry, becomes first Black Berkshire Hathaway Franchise Owner

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Other

The Famous Marcus Books in Oakland may not survive.

Pandemic may affect census counts in minority communities

Weekly Unemployment Figures Signal Depression

Weekly Unemployment Figures Signal Depression Level Job Losses
Unemployment rate is 15.% and continues to rise

The weekly unemployment claims report for May 7th showed incredible number of job losses as people filed claims for unemployment insurance.  For the week ending May 2nd reported that 3,169,000 people filed an initial claim for unemployment insurance.  That's down 677K from the April 25th figure of 3,846,000 people. This months figure is 15 times the average for the past year. 

Continuing Claims

The May 7th report also captured 22,647,000 people who filed continuing claims for unemployment assistance for the weekly of April 25th, and increase of 4,636,000 claims.  The estimated unemployment rate was 15.5%

The Department of Labor weekly claims report is the go to report in these fast changing times. It's released every week.  The report captures all the new people who have filed for unemployment relief and the people continuing to receive unemployment relief. 

The Bureau of Labor Statistics releases the detailed "Employment Situation" report on the first friday of each month. The April report, released May 8th, 2020 only partially captured how bad the job losses were from Covid-19. So everyone is watching the weekly report. 

Interesting Readings for December 2019

Black Celebrities try to buy Disney sports channels

From February and May 2019, we reported that a number of Black celebrities had expressed interest in purchasing 22 TV sports channels from the Disney Company.  The sports channels show local live sports like the YES channel in the New York area which has exclusive rights to broadcast the NY Yankees. Local sports has become a "must carry" so the channels have an almost guaranteed income.

Disney was forced to divest on anti-competitive grounds.

Ice Cube (O'Shea Jackson) and LL Cool J (James Todd Smith) have reportedly bid on 22 television sports channels Disney was forced to sell.  The asking price is between $15 to 22 Billion dollars. Apparently Ervin "Magic" Johnson and Will Smith were also part of the deal.

https://www.thebeatdc.com/blog/2019/4/22/will-smith-and-magic-johnson-join-ll-cool-j-and-ice-cubes-effort-to-buy-sports-stations

Sinclair broadcasting ended up purchasing 21 TV sports channels from Disney Company.

Amazon also made a bid.  The YES network bought the remaining rights to the Yankees.

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Byron Allen Sues Comcast for Racial Discrimination


Byron Allen brought a court case against Comcast for refusing to carry his entertainments channels.

Byron Allen's company is here https://entertainmentstudios.com/

Sean Combs (Puffy Daddy) own revolt.tv https://www.revolt.tv/

And Oprah Winfry owns own network. http://www.oprah.com/app/own-tv.html

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NY Times: Bank manager and customer detail bank discrimination at JP Morgan Chase

NY Times

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Black Franchises Complain about cash flow issues

CNBC


National Black McDonalds Operators Association
https://nbmoa.org/

National Hispanic Owner Operators Association
https://mhoa.wildapricot.org/

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Robert Johnson's Ex, Sheila Johnson, Operates a luxury hotel chain

https://www.salamanderhotels.com/