CommentsLATINO PERSPECTIVE--Latinos who are born in this country are hardworking folks, and perhaps those who come here without papers take work as a family duty to them and their families. Work for Latinos is no joke, It’s how they survive, thrive and prosper.
It’s also true that Latinos three times as likely as the general population to start their own business. In an interesting article in thehill.com Mike Lillis and Rafael Bernal confirmed this assessment. However, there is a report by the Stanford Latino Entrepreneurship Initiative (SLEI) that found that cultural and economic factors have hampered the growth of Latino-owned businesses at a cost of trillions of dollars.
The lost growth amounted to a $1.38 trillion “opportunity gap” in 2012 alone. “Latinos tend to open businesses with “personal motivations” rather than as a result of identifying market opportunities.” And that because of this, Latinos are less likely to pursue capitalization opportunities that put full ownership at risk, limiting their prospects for growth, the SLEI found.
The Hill reported that Hispanic business leaders say the lack of access to capital was accentuated by President Obama's regulatory measures in the wake of the 2008 financial crisis.
“Hispanic businesses have it twice as bad. Under the Obama administration, the Consumer Financial Protection Bureau was so draconian that they over-regulated the financial services industry,” said Javier Palomarez, president of the U.S. Hispanic Chamber of Commerce (USHCC).
Republicans in Congress have vowed to repeal the majority of Obama's economically significant regulations once President-elect Donald Trump takes office.
Despite their limitations, Latino-owned businesses are still the fastest-growing segment of small businesses in the country, generating around $400 billion in annual revenue, according to the Congressional Hispanic Conference. What is also interesting is that Latina-owned businesses have led the charge.
The number of businesses owned by Hispanic women grew 206 percent between 1997 and 2014, compared to 68 percent growth of women-owned businesses in general, according to a report by American Express.
This all makes sense because many Latinos open businesses based on personal needs not business trends, that is why I say that for Latinos business is very personal.
President-elect Trump has promised that he will create an environment in which those who want to open or grow a business will be able to do so, and those who want a job will be able to find it. Last week he said that Japanese tech billionaire Masayoshi Son will invest $50 billion in new start-ups in the United States.
The businessman has pledged to create 50,000 new jobs in the Unites States over an unspecified period of time. Son, who is the founder and chief executive of SoftBank, one of Japan’s largest tech companies, owns the US the mobile carrier Sprint.
Maybe what Mr. Trump can also do is to find a Latin American billionaire and convince him or her to do the same but focusing on Latino businesses. Or perhaps, deregulating the financial industry as Republicans have promised to do will do the trick. – Only time will tell.
(Fred Mariscal writes Latino Perspective for CityWatch. He came to Los Angeles from Mexico City in 1992 to study at the University of Southern California and has been in LA ever since. He can be reached at [email protected].)
-cw
Latino Business Owners Still Face Finance Redlining
