Democratic vice-presidential candidate Kamala Harris said while campaigning in Michigan that only one black-owned restaurant in the state received support through a federal COVID-19 relief program, a statement that is not true.
The U.S. senator from California, who is former Vice President Joe Biden’s running mate, renewed the request for the Paycheck Protection Program on Tuesday during his visit to Flint and Detroit. The program, which has come under fire for its treatment of minority-owned businesses, provided nearly $16 billion in forgivable loans to more than 120,000 Michigan entities as of the end of June.
“I looked at the numbers in terms of businesses, small businesses, restaurants that got PPP in Michigan and only one black restaurant got it out of the hundreds that got it,” Harris told a WDIV reporter. “So Joe and I are very firm believers that you have to tell the truth, you can’t deny the facts and where there are discrepancies they have to be corrected.”
While there is evidence of racial disparities among PPP loan recipients, Harris’ claim is based on a small portion of the data and doesn’t tell the whole story.
Of Michigan’s 792 full-service restaurants that received at least $150,000 in loans under the program, only one said its owners were black or African American, according to data from the US Small Business Administration.
But 617 of full-service restaurants, or 78%, did not answer the question about the race or ethnicity of their owners.
Additionally, two Michigan fast-food and take-out restaurants — a different classification of full-service restaurants — owned by Black or African Americans received PPP loans of more than $150,000, according to federal data. And another 26 black- or African-American-owned restaurants in Michigan received PPP loans of less than $150,000, according to federal data.
Still, much of the demographic information about owners remains unclear, as 81% of Michigan’s more than 6,700 restaurants that received PPP loans did not answer the question about race or ethnicity.
“Senator Harris makes the important point that during COVID-19, black communities and small businesses have been disproportionately impacted — including black people who are dying twice as fast,” the spokesperson said. Biden campaign, Ben Halle, on Harris’ statement.
According to the Small Business Administration, about 75% of PPP loans had no demographic information at the time of loan application.
“The loan forgiveness application specifically requests borrower demographic information so that the SBA can better understand which small businesses are receiving PPP loans,” the administration added in a document on its website.
Yet several studies have found evidence of disparities in how black-owned businesses were treated in the business loan process.
The National Community Reinvestment Coalition, an organization that works to promote investment in underserved communities, said in July that the federal government’s data was “so flawed that it’s virtually pointless to assess whether there was a bias in how money was distributed or how much money went to specific communities.”
The coalition sent “matched pairs” of black individuals and white individuals to banks while PPP loans were available to see if there were any differences in their treatment. analysis found that in 27 of 63 “tests” there was a difference in treatment with the white tester receiving more favorable treatment compared to the black tester.