The Latinx community has produced more than $2.6 trillion in economic impact in the United States, and the 4.1 million of Hispanic businesses have generated more than $800 billion in revenue, according to Ramiro Cavazos, CEO of the Hispanic Chamber of Commerce. These numbers are set to grow because of 20% of the U.S population is currently from a Latinx background and the community has the fastest growing consumer base in the country.
As part of the Thomson Reuters Institute’s series honoring Latinx Heritage Month, Cavazos spoke at the third of four recent panels, De dinero y bondad (Of Money and Kindness): Supporting US Financial Growth through Increased Latinx Economic Access, which addressed the opportunities and threats facing Latinx’s economic growth, and what companies should be doing to contribute positive changes for their own Latinx employees and community.
(You can read about the first two panels, hosted by Thomson Reuters to honor Latinx Heritage Month, which were held in late-September, here.)
Hispanic business owners face headwinds
Though there is tremendous opportunity given the economic purchasing power of the Latinx community, many business owners face considerable challenges, including digital transformation to take advantage of technology for efficiency and growth, lack of access to capital to start businesses, financial services to grow, and knowledge of the tax code to maximize cashflow and run their businesses, according to panelists Carlos Guaman, president of El Triunfo Corp., and Betty Francisco, co-founder of Amplify Latinx and general counsel of Compass Working Capital.
To demonstrate the obstacle of access to financial services during the Paycheck Protection Program (PPP), Francisco described how many Hispanic entrepreneurs could not take advantage of the offering because it was “structured around businesses who had employees, and many of the Hispanic solopreneurs use it because they are a one-person shop. In addition, Mario Ruiz, a fintech investor at PayPal Ventures stated that only 52% of Latinx businesses had a banking relationship to take advantage of the PPP.
To address these headwinds, corporations, policymakers, and business owners are needed to come together to address needs of Hispanic entrepreneurs collectively. For example, HP made an intentional effort to attract Latinx customers and partners by offering bilingual capabilities at its customer welcome centers. As a result, requests to come to the visitor center tripled, and the company’s conversion rate of Latinx-owned businesses went to 64% from 34% in one year, according to Kim Rivera, President of Strategy and Business Management and Chief Legal Officer at HP.
Role of corporations — Corporations have a tremendous opportunity to ensure that Latinos are making headway. Representation in the C-suite and on public company boards matters. For HP, it has two in Latinos in chief roles — Rivera and Enrique Lores, President and CEO. Because the boardrooms are where key decisions on investments in terms of talent and investment in future customers, having Latinx voices in the rooms makes a huge difference.
Role of business accelerators — In addition, Latinx business in most cases don’t have the extra time to invest to explore solutions to address their many business demands. This is where accelerators and incubators can come in to be an one-stop shop to focus on all of entrepreneurs needs because they already have vetted resources to address their most pressing business requirements, which include capital, access to new customers, digital marketing and sales online offer, according to Francisco.
Role of Latino networks of influence — Hispanic individuals with power and influence have a tremendous opportunity to advocate and flex their networks, for example, to create internships at large companies and improve access to capital and raise their voices to be more vocal about the equity disparity in board rooms and funding for Latinx entrepreneurs. To illustrate, Rivera testified in front of California Senate to introduce legislation to diversify board level representation, which was just passed in late September for requiring public companies headquartered in California to diversify their boards racially, ethnically and in terms of sexual and gender identity. Further, HP’s Lores encouraged California to pass this legislation through a LinkedIn post.
Access to Justice and the Latinx community
In the fourth and final panel, hosted by Thomson Reuters as part of Latinx Heritage Month, Las Furias y Las Penas (The Furies and the Sorrows): Addressing Access to Justice for the Latinx Community, panelists focused on access to justice concerns for the Latinx community.
Panelists Irene Oria, a partner at FisherBroyles and president of Hispanic National Bar Association, and Veronica Delgado-Savage, vice president of Youth Justice Services at Southwest Key Programs, said that in the short term, the Latinx community has fears about completing the census and gaining access to voting in the coming presidential election.
Longer term, the school-to-prison pipeline and legal representation for gaining permanent residency are also challenges within the community. Indeed, Hispanic youth are at a minimum twice as likely to be arrested and charged for a crime than white youth, according to Delgado-Savage. However, progress to address any of these challenges is unlikely in the highly charged, polarized political environment.
The death of the beloved US Supreme Court Justice Ruth Bader Ginsburg, however, puts such hopes in doubt. The jurisprudence and rulings of circuit judge Amy Coney Barrett on the U.S. Court of Appeals for the Seventh Circuit, who is nominated to replace Ginsburg on the Supreme Court, as well as her writings as a law professor, are problematic for the Latinx community on key issues. These include the elimination of the Affordable Care Act, a deference for religious rights trumping civil and constitutional rights, and voter suppression, according to Omar Gonzalez-Pagan, Senior Attorney, Lambda Legal. On the latter, the Supreme Court recently took up a case from Arizona that would gut out the Voting Rights Act and impact the Latinx community’s ability to access justice permanently. That case will be heard during the upcoming Supreme Court term.
Gonzalez-Pagan correctly noted that the Court cannot be the only tool to address the challenges of the Latinx community, and Oria noted that the biggest opportunity in the near term to take action is to vote, in spite of the active voter suppression efforts.
Despite these challenges, communities and groups as allies need to raise their voices and not quiet down to keep hope alive to engender enough political will to tackle these challenges. In fact, some of the biggest reforms in our country’s history have come after times of great turmoil, citing the Civil Rights Act in 1964, the Voting Rights Act in 1965, and the Fair Housing Act in 1968 as evidence, according to Gonzalez-Pagan. Indeed, the community remains one of the biggest forces in the US economic engine as consumers, small business owners and current and future employers of Fortune 1000 firms.