Impact of COVID-19 on Latin-Owned Businesses
COVID-19 hasn’t done anyone any favors, but it’s effects on minority communities have been even more dire than the effects on the country as a whole have been. Manual labor jobs and service industry jobs are aplenty among the Hispanic community, but unfortunately those aren’t jobs that can be done at home. With that, a Pew Research study determined that nearly one-half of Hispanics said someone in their household has suffered some sort of pay cut due to stay-at-home orders, compared to only 1/3rd of the country, as a whole.
In addition, the disease itself has infected minority communities at much higher rates than their predominantly white counterparts, and with sick people being unfit for work, this has also led to businesses closing in those communities that would have otherwise been cleared to stay open.
The Bad
A survey conducted by Stanford among Latino business owners determined that nearly two-thirds of the business owners believe they will have to shut the doors of their businesses if the trends continue for another 5 months. Many Latino businesses are in urban areas where stay-at-home orders have been more strict, thus causing these numbers to be so high. In another survey of Latino businesses that make a $1 million-plus revenue, 86% of owners reported an immediate negative affect on their business when stand down procedures began.
Even for businesses deemed essential, the reality of customer hesitation (especially in populated areas) has had similar bottom line effects. Construction was deemed essential in Miami, which has a large Latino population, but some companies reported customer declines of up to 90% in urban areas. Though diversity in many corporate workplaces is in on the rise, a lot of business in these communities are heavily supported by their Latino brothers and sisters, and the overall spiral is one that resulted in a lot of people without money to spend, even if they wanted to support their neighborhood businesses.
Even financial funding from the government did not reach Hispanic communities as readily as it did others due to the fact that many Latinos do not use large financial institutions, where the money was being routed through. Payroll Protection Program (PPP) loans aimed to help small businesses have seen a 47% approval rate nationally, but that number is 31% for Latino companies.
The Good
Unfortunately not a lot to report here, but a few bright spots do exist in places that make sense. Cleaning services and cleaning supply stores have both seen bumps in revenue since the pandemic began, and even for the Latino business owners who aren’t doing as well, the sheer fact that they are where they are despite racial and socioeconomical challenges is proof that they’re going to work as hard as they need to. Community GoFundMe’s have seen success where the government has fallen short, and other private sector groups like the Minority Business Development Agency are lending a hand.
The Future
Especially in border cities and large metropolises, bi-lingual businesses were on the rise, prior to stay-at-home orders. 29% of these companies were owned and operated by immigrant families, and those communities tend to support each other very well. In addition to being younger communities according to median age, Latino business owners also start young, with 43% of Hispanic business owners being between the ages of 18-35. With that, even if things do continue the way they are, there is time to rebuild.
More optimistically, it’s starting to look like things aren’t going to continue the way they are (at least not for six months as many feared would be the drop dead timeline for their businesses), and staying afloat should be a short-term task. With more government assistance expected, and a learned means on getting to the front of the line, Latino businesses, and businesses on the whole, hopefully have seen the worst.
