OPINION: Don’t Leave Hispanic Businesses Out Of COVID-19 Recovery, For Houston’s Sake
“Hispanics Represent More Than $53 billion In Annual Spending Power, Which Is Just Short Of A Quarter Of Total Consumer Spending In The Region.” – Dr. Laura G. Murillo
Style Magazine Newswire | 10/23/2020, 9:12 a.m.
By Dr. Laura G. Murillo
The pandemic caused by COVID-19 has created an economic challenge unlike any other in our lifetime.
Nowhere is this impact being felt more than within the Hispanic business community. Let’s be clear. Houston cannot recover unless Hispanic businesses recover. And that requires reaching out to, not ignoring, the region’s largest ethnic group.
A recent study published by the University of Houston’s Hobby School of Public Affairs found that of the Hispanic-owned businesses in the Greater Houston region, 60 percent expect sales to drop, with over half of those anticipating a drop of more than 50 percent, year over year. Thirty percent reported having to make layoffs in response to the pandemic, and nearly half of those businesses report having to furlough or lay off over 80 percent of their total workforce. The surve also underscores the fact that supply chains have been significantly disrupted and countless small businesses are currently facing some kind of financial hardship like the inability to make rent or payroll or pay utility bills.
For the region, the devastation being felt by Hispanic-owned businesses will also result in a painfully prolonged economic recovery, due to the community’s outsized influence on the regional economy. It’s worth repeating that Hispanics are the largest ethnic group in the Greater Houston region, with 38 percent of small business owners in Houston being Hispanic. Additionally, Hispanics represent the fastest-growing population subgroup when it comes to total spending. According to a study conducted of Houston by Telemundo, Hispanics represent more than $53 billion in annual spending power, which is just short of a quarter of total consumer spending in the region.
If we want to shorten shorten the duration of the downturn and build a stronger regional economy for the future, then Hispanic-owned businesses must have equitable access to the assistance programs that have been established in the wake of COVID-19. Unfortunately, Hispanic and minority-owned businesses continue to be left behind in this regard, too.
With their businesses reeling, Hispanic entrepreneurs continue to struggle with access to government assistance programs like the Paycheck Protection Program. According to a survey from Color of Change and UnidosUS, only 12 percent of Black and Hispanic business owners who applied for the forgivable low-interest loan under the federal initiative received it. While there are many reasons for this — a lack of program knowledge, a hesitancy to interact with the federal government, not enough employees on payroll to qualify, etc. — the truth is that without financial support, many of these businesses will close permanently, creating an irreparable void in the regional economy.
The good news is that local governmental entities have created programs that could help Hispanic-owned businesses weather the economic storm.
Take for example the recently passed Small Business Recovery Fund program approved by Harris County Commissioners’ Court. The $30 million grant program funded by CARES Act dollars has helped provide funding for businesses that have yet to receive financial support. This program followed a $10 million loan program dedicated to helping small businesses weather the economic downturn. The City of Houston also approved a $15 million small business economic relief program that provides grant assistance to small businesses negatively impacted by the pandemic.
Programs like these are a great start but will not be nearly enough to meet the need of small business owners across the city. As evidence: all of these programs received far more applications for assistance than could be serviced within hours of the application window opening. In order to continue to meet demand, more funding must be allocated to preserving our small business eco-system, which serves as the backbone of our regional economy.
Without that critical support, the future of our businesses — and our economy — will continue to be in peril. www.HoustonHispanicChamber.com