Biden faces backlash over vow to prioritize minority-owned businesses
U.S. President-elect Joe Biden delivers remarks after he announced cabinet nominees that will round out his economic team, including secretaries of commerce and labor, at The Queen theater on January 08, 2021 in Wilmington, Delaware. (Photo by Chip Somodevilla/Getty Images)

WASHINGTON (SBG) - President-elect Joe Biden said this week that he will prioritize help for small businesses hurt by the COVID-19 pandemic based on the racial makeup and sex of their owners.

“Our focus will be on small businesses on Main Street that aren’t wealthy and well connected, that are facing real economic hardships through no fault of their own,” Biden said in a Monday video. “Our priority will be Black, Latino, Asian, and Native American owned small businesses, women-owned businesses, and finally having equal access to resources needed to reopen and rebuild.”

Biden went on to say, “We’re going to make a concerted effort to help small businesses in low-income communities, in big cities, small towns, rural communities that have faced systemic barriers to relief.”

The COVID-19 pandemic in the United States devastated the small business community through lockdowns and limited capacity laws; many are looking toward the incoming administration to provide desperately needed relief.

The most recent COVID-19 stimulus package sought to provide businesses with an increase in federal assistance, reviving the Paycheck Protection Program (PPP) that offered a lifeline to many businesses last spring. But many owners fear that the new round of funding will fall short of what is needed to survive as the pandemic continues.

The new package, which earmarked nearly $285 billion for small businesses, reduced some of the restrictions the forgivable PPP loans carried the first time around. The package also set aside sums to community development lenders, many of whom specialize in loaning money to underserved, low-income regions and businesses with fewer than 10 employees.

A study conducted by Yelp showed that by the end of Aug. 2020, nearly 100,000 businesses had closed permanently. That number accounted for approximately 60% of all businesses that reported closing or suspending services because of COVID-19 lockdown orders.

The Yelp study showed that restaurants, bars, and night clubs had been the hardest hit by the pandemic, with nearly 40,000 closures in a six month period.

While the exact demographics among the employees laid off and proprietors who lost their small businesses because of the pandemic is not known, Biden’s vow to issue prioritization for federal help stirred controversy.

The Biden transition team has not explicitly stated what actions they would take to prioritize struggling businesses owned by the named minorities or women, but many raised questions of constitutionality.

In the plan for economic recovery from COVID-19 on Biden’s campaign website, minority businesses are described as having been “largely shut out” from recovery funds. As a solution, Biden vowed to provide access to tools for minority-owned businesses that would help them get needed financial assistance.

The plan, which is not dated, does not mention an intent to give priority preference to minority or women-owned businesses.

Senior Editor for the Federalist Mollie Hemingway noted that before the pandemic, minorities had seen better job opportunities than in previous years. The best way forward for everyone, she said, was to get back to work.

“We are in a really horrible economic situation, and the way to get out of that is not through anything other than letting people get back to work and letting people thrive,” she said during an appearance on Fox News. “We had so many gains for minority business holders and just minority wage growth in the last four years. It wasn’t by government dictating who would be winners and who would be losers, it was just by letting people work.”

Federal law currently prohibits discrimination based on race, color, sex, familial status, disability, religion, and national origin. The Civil Rights Division of the Department of Justice enforces laws against such discrimination in federally assisted programs, like the PPP and unemployment boosters provided for in the COVID-19 stimulus package.

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