Opinion: The necessity of giving back to Latino-owned businesses
Why economic involvement for the Latino community matters more than ever
The Latino cohort is the largest minority group in the United States, and we have seen a recent boom in Latino-owned business. However, the coronavirus pandemic affected the Latino community and its businesses drastically compared to other ethnic groups in the U.S.
An increase in economic involvement from our community is necessary to help the Latino community in their time of need.
To put things in perspective, the number of Latino-owned businesses grew 34 percent, compared to one percent for other small businesses, over the last ten years, according to a study done by Stanford University. However, further review of the data showed that despite this growth, “Latino-owned employer businesses are significantly less likely than white-owned employer businesses to have loan applications approved by national banks.” Considering that these businesses performed strongly in metrics on critical lending criteria — credit, profitability, liquidity and business age — there should not be as big of a discrepancy. ,
After a pandemic, one might assume that the federal government would help these businesses in ways that national banks did not. That was not the case.
The adverse economic effects of COVID-19 brutalized Latino-owned businesses nationwide. And the federal government isn’t helping them out either. According to another study done by the Stanford Graduate School for Business, “Latino-owned businesses have less cash on hand and when requesting funding from the Payroll Protection Program, Latinos have their PPP loans approved at half the rate of white-owned businesses.” This data indicates that we cannot rely on federal or private funding to solve the economic problems within the Latino community.
We need a much more grassroots approach where we make up for the shortcomings of the federal government. And it’s the most straightforward plan of action: buy from Latino-owned businesses and restaurants.
While this is happening nationwide, D.C. is one of the most affected areas in the United States as the district relies heavily on Latino businesses for economic growth. A report from American University’s Center for Latin American and Latino Studies shows the D.C. metro region “now has approximately 66,000 Latino-owned firms, which represent 12 percent of all businesses in the region, a significant increase from a decade ago.”
There is an increase in Latino businesses and an increase in the effect of COVID-19 for those businesses. AU’s research indicates that place-based and in-person establishments like restaurants were the most at risk. Even more concerning, the report surveyed 152 Latino-owned shops and asked the participants how COVID-19 has affected their business. The results found that “56 percent of owners report severe upheaval to business as usual, including 30 percent having to close or to suspend operations and 26 percent greatly reducing operations.” While the data is striking, it does not take much to see the damage of the pandemic on these businesses.
A quick trip over the summer to my favorite Peruvian restaurant in Tenleytown, Crisp & Juicy, left me in awe over the lack of traction it was receiving. The once-booming chicken joint was left deserted with the odd customer coming in here and there. Since the semester started, I’ve been a regular at what I would describe as the best restaurant in the Tenleytown area, and business has picked up. But it’s nowhere near its pre-pandemic prime. While more chairs are being filled at Crisp & Juicy, there are more empty than served in the relatively small restaurant every time I go.
Some of you might say, “COVID-19 has affected every business; they can deal with it like everyone else.” The answer to that is simple: no, they can’t.
Latino-owned businesses have, on average, fewer resources to weather the storm compared to other small enterprises. Economic setbacks have a far graver effect on these businesses because they are more likely to close or shrink productions sooner than other businesses. Their margin of error is smaller, and that is why they need our attention.
My goal is not to convert you to a strict arroz con pollo diet but instead to suggest a change in your spending habits that can positively impact your community by helping quality shops get back on their feet. Maybe instead of heading to that fast-food chain you always go to, try something new. Try something local. Try something Latino.
Nick Blanco is a junior in the School of Communication and a columnist for The Eagle.