Latine Entrepreneurs and Covid-19: An overview of their pandemic related strategies

Photo By Piboon Otto

Restaurants owned by Latine immigrants are especially vulnerable to the pandemic’s economic impacts. The safety measures necessitated by the coronavirus’s spread have created a new set of business expenses since the government has expanded regulations on standards and practices. This is most notably exemplified by the instantiation of mask mandates and decreased occupancy indoors. In a “Local Economic Impact” report from last year, Yelp calculated that over 160,000 businesses had shuttered since the beginning of 2020, with over 60% of the businesses (97,966) closing down for good. But we know that this doesn’t affect every industry equally. Despite accounting for roughly 4% of GDP in the US, restaurants are among the hardest hit. According to a report to Congress from the National Restaurant Association, only a few months after the Yelp report, approximately 17% of restaurants (accounting for over 110,000 storefronts) are now closed without any prospects of reopening. While it’s true that entire sectors of the economy have been stalled during the pandemic and the resulting quarantine, many well-established factors have disproportionately affected Latine and immigrant-owned restaurants.

One major factor is that many of these businesses were, for one reason or another, incapable of applying for the Payment Protection Program (a policy designed to stimulate the economy by supplementing the payroll expenses of qualifying businesses). While some immigrants were prevented from applying due to a lack of access, others still were obstructed from the program by more fundamental fears. For example, banks are often not equipped with translators to allow non-English speaking business owners greater access to lenders. On the other hand, many owners, or potential owners—who contribute to our society through sales and business tax—chose not to access earned benefits for fear of reprisal from a draconian and deportation-focused immigration system. Both of these scenarios indicate larger systemic forms of disenfranchisement for immigrants in this country.

Much of the CDC’s research is not categorized by race or immigrant status. Luckily, a few studies have been done around the country that try to account for disparities based on race and other identifications. A survey conducted in partnership between the University of Minnesota and a nonprofit organization called Hispanic Advocacy and Community Empowerment has revealed some staggering statistics about the pandemic effects on Latine-owned businesses. According to the survey, the 53 businesses that responded lost nearly $3 million in combined profits and assets. Unsurprisingly, when the survey asked whether the owners had taken advantage of the PPP, only 45% said they had. This represents a 30-point difference between Latine business owners and 75% of all businesses applied to the Minnesota PPP. But this makes sense given what we’ve already discussed. Not only are Latine business owners more likely to be immigrants, but Latine immigrant business ownership—at roughly 1.2 million as of 2018—rivals that of white business ownership. Moreover, this survey is backed up by data all over the country. According to a Wall Street Journal article from the summer of last year, 80% of small business owners applied for the PPP, while only 29% of Latine immigrant-owned businesses did the same.

While a punitive immigration system’s fears largely explain this discrepancy, it doesn’t account for why non-immigrant Latine business owners also didn’t apply for the PPP. In a Small Business Administration dataset reported on by the Washington Post, it was revealed that nearly half of the $525 billion given to over 5 million businesses was awarded to only 5% of applicants. More illustratively, less than 30% of the total funds were awarded to loans of less than $150,000. The unfortunate truth about massive government bailouts like this is that a vast proportion of the allocated funds are often awarded to large, publicly-traded corporations. While some may argue that large corporations are deserving of the funds because of their position as nation-wide employers, the fact remains that companies like Wendy’s and Walmart are insulated from the risks of the pandemic due to the capital structures of multinational organizations and a suite of tax policies and laws put into place through lobbied business interests (all of which are far too complicated to discuss in this article alone). So, while brick and mortar stores languished under shifting health standards and lagging business, large corporations continued to pad their already insulated payroll by drawing from finite government funds. Many small businesses were left out of the equation by local and national lenders. This tragedy was only doubled for Latine business owners who were linguistically disenfranchised and economically disillusioned by a system that either passively ignored them or actively despised them.

The owner and manager of WCE Deli Corp., a grocer and taco shop on the outskirts of what is known as Little Italy in the Bronx, is a short, unassuming middle-aged woman, a Mexican immigrant to this country without citizenship. When we reached out to her, she agreed to interview us, though she did not give us her name. The WCE Deli position in the Belmont section of the Bronx is a liminal one, equidistant from the flamboyant and fragrant sidewalks of Arthur Avenue and the bodega on 183rd street where Lesandro ‘Junior’ Guzman was slain by gang violence in 2018. When I asked whether she applied for the PPP, she answered solemnly in Spanish (translated here for the convenience of the reader): “[I] did not even look that way. They always deny you help”, she said. There is nowhere to “look” for comfort but inwards for many undocumented immigrants in this country. Instead, they must rely on a sense of responsibility and community to guide their actions. HOWEVER, as I mentioned above, this aimlessness is not based on documentation, but instead on an overriding feeling that despite the pomp and circumstance in Washington, D.C., the government’s vast proportion bailout was not allotted for the average business owner. Angel, the owner of Angel’s Café in Belmont, immigrated from Ecuador and has his citizenship, but he told us that he also didn’t apply for the PPP. When I asked him why he said he was “not interested” in applying. “They always deny you,” he said.

While this might otherwise indicate a dire situation for the Latine business community, there remain several options for people looking for relief. A recent report from the Progressive Policy Institute has suggested several pragmatic policy goals for us looking for systemic reform on immigration in the United States. One of the most notable is implementing the Obama-era International Entrepreneur Rule. The IER is an executive order introduced by President Obama to offer temporary visas to immigrant entrepreneurs. A few days after the report was released, a coalition of 16 organizations contacted the White House to petition for the IER’s reimplementation. While it is likely that the Biden administration will bring back the IER, more systemic support at local levels is necessary to help resolve the issues that limit access. Luckily, NYC has a somewhat substantial support system for immigrant-owned businesses: such as providing translation services. Expanding the funding of services like this will allow us to protect the 10% of business in this country owned by Latine immigrants. In doing so, we would help preserve a wellspring of entrepreneurial spirit. At the beginning of the year, the mayor and governor’s offices revealed the “Fair Share” program dedicated to expanding access to the PPP and other federal relief. With Governor Cuomo coming under fire this week for his handling of the coronavirus, a program like this might signal a show of good faith toward immigrant business owners in the year to come. Activists look forward to seeing local programs like this expanded around the country even while federal efforts to reform immigration policy continue.

In the private sector, the Fort Worth Hispanic Chamber of Commerce has begun a fund called the Business Bounce Back program designed to accommodate FWHCC affiliated businesses with consultants and experts tasked with designing solutions and assisting with recovery needs. Meanwhile, some good news has come out of Chicago of stable or growing businesses in Latine neighborhoods. These businesses survived thanks to community outreach and innovative business strategies designed for the pandemic in large part. While this is useful for those businesses looking to survive, individual solutions do little to address the wider systemic issues outlined above. If you, or someone you know, require assistance in NYC due to their immigrant status, please reach out to the Immigrant Business Services department at the office of Small Business Services (SBS).