The federal election season is already in full swing and politicians from both major parties are asking themselves how to garner the Latino vote by next November. They are asking themselves the wrong question. The real question is what they can do to help rebuild financial assets in Latino families and communities. In the wake of our nation's worst financial crisis in many decades, a financial crisis that disproportionately impacted Latinos, any politician that can communicate a clear strategy for creating jobs, supporting small business development and stabilizing neighborhoods hard hit by foreclosures is going to get the attention of Latino voters. Some might say that is the same concern for all Americans. They'd be right... and that's the point.
There has been a great deal of reporting on the growth of the Latino population in the U.S. However, less focus has been placed on what this means for our economy. Consider the following data.
• The 2010 Census documents not simply the growth of the Hispanic population (over 50% of US population growth since 2000 was due to Hispanics) and the relative youth of Latinos when compared to the rest of the population (25% of all children under 10 are Hispanic, while Hispanics make up 16% of the overall population) but also the dispersion of Latinos outside of traditional population centers to places like South Carolina, Minnesota, and Alabama (with Hispanic population growth between 2000 and 2010 of 148%, 75% and 145% respectively).
• Pew Research Center's analysis of data from the US Census Survey of Income and Program Participation found that from 2005 to 2009, inflation-adjusted median wealth fell by 66% among Hispanic households, more than any other major ethnic group.
• In 2010, the Center for Responsible Lending estimated that 17% of Latino homeowners had lost, or were at imminent risk of losing, their home and that, between 2009 and 2012, Latino communities will experience $177 billion in indirect "spillover" losses as a result of the foreclosure crisis (i.e. home values dropping due to the foreclosure next door).
These troubling statistics illustrate a central challenge for the US economy. The youngest, fastest growing major segment of our population - in every region of the country - has been hit hardest in this enormous economic downturn. The lesson is this: so go Latinos, so goes the US economy.
This is a cautionary tale, but not a story of despair. Consider these data.
• Despite the fact that Latinos were overrepresented in industries, like construction, that were the most devastated during the economic crisis, a 2011 US Department of Labor special report on the Hispanic Labor force indicates that the employment to population ratio for Hispanics is 59%, almost exactly the same for White, non-Hispanics. Further, unemployed Hispanics experience a shorter duration of unemployment and are less likely to join the ranks of the long-term unemployed.
• According to the most recent Census Bureau Survey of Business Owners (2007), Hispanic-owned businesses are the fastest growing small business sector, expanding at nearly twice the rate of the national average between 2002 and 2007. The Kaufman Index of Entrepreneurship found that, in the face of this economic crisis, the entrepreneurship rate among Latinos has actually increased.
The foundation for economic recovery can be seen in the very same population that has been hardest hit. At the National Association for Latino Community Asset Builders (NALCAB), we support a network of more than seventy five local non-profits to build community assets and family wealth in predominately Latino communities. Our members include affordable housing developers, micro-lenders, consumer counselors and economic development corporations. In addition to providing funding and technical support to local organizations, we advocate for federal policies that open opportunities for low-income people to build financial assets.
Our nation's domestic economic policy must recognize the economic challenges of the Latino community as economic challenges for the entire nation and it must build on the strengths and entrepreneurial spirit that is so prevalent among Latinos. Here are three ways to move in that direction.
➢ With so many unemployed people turning to small business strategies to earn a living, our Federal small business policy should place a greater focus on delivering capital and technical support to micro businesses. In the current environment, we are better served by creating the conditions for 100,000 businesses to employ ten people, rather than betting on twenty businesses that might employ fifty thousand each.
➢ Immigration policy is an economic policy, not a social policy. The labor market confusion caused by our broken immigration system is stifling the operations and growth of US companies and depresses the wages of workers. The increased intimidation and criminalization of undocumented workers ensures that these tax payers, entrepreneurs and potential homebuyers, remain outside of our mainstream economy. Comprehensive immigration reform will be a catalyst for economic growth and will open the opportunity for undocumented workers to invest in the United States.
➢ Finally, the federal government is going to decide what to do with the enormous number of foreclosed homes that it owns through Fannie Mae, Freddie Mac and the Federal Housing Administration. This decision will have a lasting impact on our housing market and the economic health of predominately Latino neighborhoods - where a large number of these homes are located. If the federal government disposes of these properties into the private market, we will see absentee investors scooping up homes in bulk, at deep discounts, and allowing these properties to sit vacant - further depressing values. A more responsible approach would be to allow high-capacity, non-profit housing developers to rehabilitate a portion of these homes, perhaps a quarter of the federally-owned portfolio. The resulting stabilization of housing values in areas with high concentrations of foreclosed and vacant properties would, in turn, stabilize the values of the remaining federally-owned properties, ultimately protecting the public investment when these are reintroduced into the private market.
Hopeful candidates looking to secure Latino votes at the ballot box would prove themselves to be more effective leaders by articulating a responsible economic agenda that responds to the challenges and opportunities in Latino communities. Doing so will result in a clear victory for everyone.