Latinos' Critical Role in Rebooting the Economy
The coronavirus impact is unfathomable. More than 200 countries and territories have been affected, and practically everyone is familiar with quarantine, “flattening of the curve,” masks, and long lines at grocery stores. According to Johns Hopkins University's COVID-19 dashboard, more than three million people have been infected to date and nearly 220,000 people have died.
While the situation is tragic, the devastation is far from over and is not limited to the impact on our health and medical infrastructure. We do not yet know the full extent of the job and economic devastation associated with the stay-at-home orders and other measures aimed at stopping the spread of infection and reducing the number of deaths.
The Unfolding Job and Economic Disaster
In the United States alone, we have more than 26 million out of work, and counting. Of these, Hispanics — like young people and low-income earners — have been dealt a swift economic blow. According to a Pew Research Center report, more than six in 10 Hispanics say they or someone in their household has lost a job or faces a reduced income due to the coronavirus.
This is not surprising, since Bureau of Labor Statistics (BLS) data and various other reports show that Hispanics are overrepresented in manual labor and the service industry. Making things worse is the fact that many Latinos, whether because of circumstances or personal choice, have not achieved a high level of education. A 2018 BLS report, "Labor Force Characteristics by Race and Ethnicity," puts the situation into perspective.
The report found that "Among people 25 years and older, the share of the labor force with at least a high school diploma was more than 90 percent each for Whites, Blacks, and Asians.” For Hispanics, that number was 76%. Only 21% of Hispanics in the labor force had a college degree, while the percentage was 63% for Asians, 41% for whites and 31% for blacks.
Fortunately for Hispanics, when it comes to starting businesses, things are different. Until recently, Hispanics were starting businesses in record numbers. The more than 4 million businesses owned by Latinos contribute more than $700 billion to the U.S. economy annually. Prior to the virus, Hispanics also had record-low unemployment thanks to the policies of the Trump administration. The future seemed brighter than ever for many.
Now, the future is uncertain. When people are working from one paycheck to the next, it is a challenge to put money aside for an emergency. The wealth gap between Hispanics and non-Hispanics was already wide. According the "2019 State of Hispanics Wealth Report," non-Hispanic white households held $8.30 for every dollar of Hispanic household wealth in 2016. With education and awareness related to saving money still lacking in the Hispanic community, this is only natural.
However, if immediate action is not taken to bridge the gap, Latinos, who have helped drive the American economy and who could do it again, will be severely handicapped during the recovery.
The Trump administration took quick and unprecedented action by making trillions of dollars available to help Americans regain their economic footing, and this will no doubt benefit Latinos.
To come back stronger, though, Latinos need ready access to capital with the same favorable lending conditions others benefit from. Helping Latino businesses get off the ground is smart because they have already contributed hundreds of billions of dollars to the American economy while employing millions of Americans.
Going forward, I recommend thinking creatively to inject our economy with new growth. To do this, we need to look closely at severely impacted industries and find ways to bring manufacturing back; incentivize people to grow and start new companies by giving them grants and access to business lessons for free; and, innovate and build new industries in the process. It is abundantly clear that we need to protect our security interests by putting American interests first.
I do not have all the solutions, but I know that this country possesses incredible talent; we have to call upon it now to lead the way to an American economic renewal. Additionally, Latinos need to count on policies and leaders who will support them and other hardworking Americans as they claw their way out of the job and economic crater left in the wake of COVID-19. Namely, get rid of red tape, lower taxes, and look for ways to help the private sector, small businesses and government to collaborate and help put people back to work faster.
Fortunately, business leaders are already working to help individuals adapt, retool and thrive during this time. Recently, I collaborated with entrepreneurship champion Bob Sager, whose work allows people to think more creatively and innovate more easily, to make his guide, “Seeing the Invisible So You Can Do the Impossible,” available in Spanish.
There are other resources for those who own a business or are thinking about starting one, including university incubators, Small Business Administration offices, fellow entrepreneurs and mentors. This is a moment for all of us to work together to unleash the spirt of American resilience and entrepreneurship.
An American Renewal
The virus has done enough damage. Latinos and Americans of all stripes must work together to turn back the job and economic tidal wave that has hit our shores. The American people and, frankly, the world are counting on it. Let us build something better that will propel us to a new chapter of American innovation and prosperity, defining this era as one of American renewal, not one of fear and despair. History is watching us.
Luis Farias is a Latino small-business owner and executive director of The Latino Coalition.