We’ve said it before, we’ve said it often and we’ll say it again: COVID-19 hasn’t revealed inequalities in the U.S., but has exacerbated those that already existed. And as federal largess spreads across the country and filters down to the local level, evidence suggests that the whiter the community, the more money it's likely to receive. The cruel reality is that the towns and communities that need the most assistance are often receiving the least. For every Black-owned business that scored a segment on feel-good television shows like Good Morning America, countless other businesses and services have already lost any chance for survival.
Take, for example, what’s been going on in Louisiana. A recent report issued in tandem by the Hope Policy Institute and Louisiana Power Coalition has found many local governments (called parishes in the Pelican State) with a majority population of rural, poor or people of color received far less funds than their wealthier counterparts. For example, one analysis found that parishes home to a majority of people of color got less than 40 percent of the funds they requested from national COVID-19 stimulus packages. For majority white locales, that figure stood at 52 percent.
“The government’s ability to respond efficiently in times of disaster can make all the difference for a faster recovery and more resilient future. It’s very likely that the very communities that would have benefited the most from relief funds are the ones most left behind and will feel the economic burden longest and hardest,” said Calandra Davis, a policy analyst at the Hope Policy Institute, in an emailed statement to TriplePundit. “We hope that this research will allow us to work towards a better, more equitable future in the Deep South and were honored to partner with the Power Coalition in their efforts to right-size relief efforts in Louisiana.”
The poorer the parish, the worse the disparity became: For example, the least wealthy parishes (those facing “persistent poverty,” as the report describes), received less than a third of what should have been their allocated funds. The funding gap also showed when comparing those same poor and rural parishes: In terms of actual dollar amounts, poor Black parishes received less than 7 percent of what poor majority-white parishes received in COVID-19 relief funding.
“Inequitable distribution of funding to reimburse these costs will mean fewer resources in the future for jurisdictions that were largely left to fund the response on their own,” the report concluded. In other words, the poorest communities that received the least funds will have an even steeper hill to climb over the next several years.
A thousand miles away, a similar situation has already unfolded in Maryland.
Last fall a study from the nonprofit news organization Capital News Service analyzed Small Business Administration (SBA) data and found a wide disparity in Paycheck Protection Program (PPP) loans. Out of approximately 60,000 loans the program distributed to smaller Maryland-based businesses, there was a $7,000 gap in average loan size between majority-white and majority-Black ZIP codes. Put another way, business owners in white communities on average scored loans more than 20 percent larger than those in Black communities.
That schism in funding mirrors the gap in COVID-19 prevention efforts across the state: In February, a Baltimore Sun report concluded that white Marylanders were receiving COVID-19 vaccine doses at a rate four times higher than that of their Black neighbors.
Such disparities have been reflected across the country, in both the disbursal of economic relief funds and the healthcare access necessary for the treatment and prevention of COVID-19. This reality is hardly a sudden development: Last summer, a Journal of the American Medical Association study concluded that the way healthcare funding was allotted under the federal CARES Act largely rested on hospital revenue data, not actual COVID-19 cases — which ended up short-changing Black communities across much of the U.S.
“The federal government is doling out pandemic relief money to hospitals using a formula that discriminates against predominantly Black communities because, in general, less is spent on their health care even when their need is greater,” wrote Bloomberg’s Dina Bass and John Tozzi last fall.
We have a situation where industries that for decades contributed to racial inequality in the U.S. — financial services and healthcare — are actually now in a position to fill in the gaps where the federal government has fallen short. Some banks are undertaking such efforts: Bank of America’s five-year, billion-dollar-plus plan that it updated last month is one such example. But as with the case of healthcare companies, financial companies have a long road ahead as they start to address the inequities they helped to fuel in the first place.
Image credit: Brandy Kennedy/Unsplash
Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He's based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.