BUSI­NESSES FEEL­ING PINCH

Crack­down has many im­mi­grants cut­ting back on spend­ing

Houston Chronicle Sunday - - FRONT PAGE - By Ileana Na­jarro and Mon­ica Rhor

In­side the PlazAmer­i­cas Mall in south­west Hous­ton, where mer­chants sell bap­tism dresses, ar­ti­sanal pot­tery and piñatas, the hall­ways are empty and bored em­ploy­ees pass the time on cell­phones. The few shop­pers re­main­ing barely glance at va­cant store­fronts, omens of a new threat to business.

To­ward the back of the com­plex, which has catered to im­mi­grant cus­tomers since 2009, store owner Emilia Al­varez snipped the sleeves off a but­ton-up men’s shirt she hasn’t sold in months. Last year, Al­varez could eas­ily rack up $1,000 at E-Mily’s Bou­tique on any given Sun­day. She had a loyal fol­low­ing among fel­low im­mi­grants who are liv­ing in the United States il­le­gally.

Then Don­ald Trump was elected pres­i­dent, promis­ing a bor­der wall and mass de­por­ta­tions — and her sales plum­meted.

Christ­mas sales in 2016 to­taled $800, a $6,200 drop from the pre­vi­ous year. Sun­day

sales in Jan­uary av­er­aged $500. On the first Sun­day of Oc­to­ber, she made $160.

In one month alone, Al­varez lost 10 long­time cus­tomers — they left the coun­try.

The same is hap­pen­ing across the city — at mom-and-pop op­er­a­tions and big-box stores, shop­ping cen­ters and dis­count bou­tiques that cater to Hous­ton’s huge im­mi­grant pop­u­la­tion and its 575,000 im­mi­grants liv­ing here il­le­gally. Business is slug­gish, sales spo­radic and shop­pers sparse.

The slow­down is a re­sponse to a new re­al­ity for im­mi­grants in Hous­ton and across the coun­try, one that be­gan to un­furl after Trump’s elec­tion ush­ered in a crack­down on so-called sanc­tu­ary cities, the stepped-up im­mi­gra­tion en­force­ment and, most re­cently, the phas­ing out of the De­ferred Ac­tion for Child­hood Ar­rivals pro­gram for young im­mi­grants.

As im­mi­grants liv­ing here il­le­gally grap­ple with greater fears of be­ing de­ported or de­tained, they have cut back on spend­ing, shut­tered busi­nesses and be­gun plan­ning to move out of Texas.

In Hous­ton, where for­eign­born res­i­dents make up al­most one-third of the work­force and nearly 30 per­cent of small business own­ers, that could mean a sub­stan­tial loss to the greater econ­omy and a crip­pling blow to the la­bor pool.

Al­varez spent a decade shor­ing up her shop, the life­long dream of a de­signer grow­ing up in El Sal­vador. See­ing her own hand­made fash­ions fly off the shelves made the pain of leav­ing her mother be­hind some­what bear­able. Now, as her clients have all but dis­ap­peared, she’s left to won­der: How much longer can the store stay open?

“It’s slow again, isn’t it?” asked Moises Kiche, Al­varez’s only re­main­ing em­ployee after she let a girl go a few months ago. Al­varez cut Kiche’s shift down to Sun­days.

“Yes it is,” Al­varez said with a sigh as she passed the now short­sleeve shirt over to Kiche for a fin­ish­ing stitch.

She doesn’t know how much longer she can af­ford to keep pay­ing him $70 each Sun­day. Los­ing him would serve as an­other stark re­minder that business is go­ing un­der.

With cloth­ing sales be­com­ing scarce and man­age­ment un­will­ing to budge on the $1,500 rent, she’s re­sorted to of­fer­ing tailor­ing ser­vices on credit, sell­ing knick­knacks in the store, even flip­ping used cars on the side.

“The idea is to make money,” Al­varez said. “One way or an­other.”

She dusted off a statue of La Vir­gen de Guadalupe at her store en­trance. It had been a gift from a friend. Now it’s on sale for $99.99.

At a time when the na­tional econ­omy is hold­ing strong, Hous­ton finds it­self grap­pling with mas­sive storm dam­age from Hur­ri­cane Har­vey, stub­bornly slug­gish oil prices and a sec­toral slump large enough to be felt across the re­gion, with busi­nesses that rely on im­mi­grants as con­sumers and em­ploy­ees in dan­ger of go­ing un­der or lay­ing off work­ers.

Re­mit­tances are down by 15 per­cent, and in­ter­na­tional ship­ping is down by 20 per­cent. Tourist bus com­pa­nies that of­fer trips to and from Mex­ico report up to 30 per­cent rid­er­ship de­clines com­pared to last year.

Maria Re­bol­lar, a real es­tate agent for the Gold Quest Group, has seen a 70 per­cent drop in mort­gage and pri­vate in­vest­ment loans among her clients who are liv­ing here il­le­gally but who all have des­ig­nated IRS tax codes.

At PlazAmer­i­cas Mall, at least three shops have re­cently closed.

At the Farmer’s Mar­ket As­so­ci­a­tion in the Heights, where Lati­nos are nor­mally the big­gest spenders and most re­li­able cus­tomers, sales have dropped nearly 60 per­cent and buy­ers pick up only the bare ne­ces­si­ties.

Along Air­line Drive on Hous­ton’s north side, Mex­i­can and Cen­tral Amer­i­can food trucks parked in gas sta­tions and park­ing lots once drew scores of latenight cus­tomers — mostly im­mi­grants pulling 12-plus hour shifts or work­ing a sec­ond job. Now, they sit mostly idle, with less than two dozen cus­tomers strag­gling by, even on tra­di­tion­ally busy Fri­day nights.

Since Trump’s in­au­gu­ra­tion, his ad­min­is­tra­tion has con­tem­plated lim­its on le­gal im­mi­gra­tion, or­dered in­creased en­force­ment by Im­mi­gra­tion and Cus­toms En­force­ment, and made tougher bor­der se­cu­rity and im­mi­gra­tion en­force­ment a re­quire­ment for any deal to save DACA, an Obama-era pro­gram that gave de­por­ta­tion re­lief and work per­mits to about 800,000 im­mi­grants brought to the coun­try il­le­gally as chil­dren. The num­ber of ar­rests by ICE agents, who are re­port­edly tar­get­ing so-called sanc­tu­ary cities, has jumped 43 per­cent.

State Sen. Charles Perry, RLub­bock, said those pre­dict­ing eco­nomic losses from the newly en­acted state law he spon­sored crack­ing down on sanc­tu­ary cities, known as Se­nate Bill 4, base their ar­gu­ments on “un­sup­ported ‘what ifs’ ” and are “typ­i­cally bi­ased with a po­lit­i­cal agenda.”

The new state law re­quires lo­cal law en­force­ment agen­cies to honor fed­eral im­mi­gra­tion holds for peo­ple in the coun­try il­le­gally and au­tho­rizes po­lice to ask about im­mi­gra­tion sta­tus dur­ing traf­fic stops and other in­ter­ac­tions. Other por­tions of the law, in­clud­ing a pro­vi­sion that would have pe­nal­ized lo­cal po­lice for re­fus­ing to co­op­er­ate with fed­eral au­thor­i­ties, have been stayed by a fed­eral judge in San An­to­nio, pend­ing a hear­ing be­fore the 5th U.S. Cir­cuit Court of Appeals in New Or­leans on Nov. 6.

“The only true mea­sur­able eco­nomic cost re­gard­ing SB4 is that of a law­less com­mu­nity,” Perry said in a state­ment. “Ex­am­ple after ex­am­ple shows that when laws are not en­forced and crime is left unchecked, com­mu­ni­ties suf­fer enor­mous fi­nan­cial costs.”

But ev­ery piece of leg­is­la­tion and ex­ec­u­tive ac­tion aimed at restrict­ing im­mi­gra­tion and ev­ery ru­mored ICE raid have ratch­eted up fears in im­mi­grant com­mu­ni­ties — par­tic­u­larly among those here il­le­gally — and forced fam­i­lies to map out what they de­scribe as con­tin­gency plans.

Do we stay in Texas or head to a more im­mi­grant-friendly state? Do we weather this po­lit­i­cal cli­mate or re­turn to home­lands where poverty is grind­ing and vi­o­lence ram­pant?

Do we buy this trin­ket or that toy or save our pen­nies, just in case? In case a fa­ther who sup­ports the fam­ily is picked up by ICE agents. In case a sin­gle mother needs money to get her son out of im­mi­gra­tion de­ten­tion. In case chil­dren are left be­hind alone

when par­ents are de­ported.

Such de­ci­sions are made count­less times of day at kitchen ta­bles and at cash reg­is­ters across the city, whose 575,000 im­mi­grants liv­ing here il­le­gally are the third-largest con­cen­tra­tion in the coun­try.

About 1 in 10 pri­vate sec­tor work­ers in Texas are here il­le­gally, ac­cord­ing to a 2016 report by the Per­ry­man Group, an eco­nomic re­search and anal­y­sis firm based in Waco. Such im­mi­grants ac­count for $77 bil­lion of the state’s re­tail sales ev­ery year.

When those work­ers and their fam­i­lies leave or stop spend­ing money, it sends a rip­ple ef­fect across the larger econ­omy.

The jobs lost are not filled by na­tive work­ers, ex­plained Alex Nowrasteh, an im­mi­gra­tion pol­icy an­a­lyst with the Cato In­sti­tute. In­stead, they dis­ap­pear, along with con­sumers who had been pump­ing money into the lo­cal econ­omy.

“Lo­cal restau­rants, gro­cery stores and bar­ber­shops also lose business,” Nowrasteh said.

The Per­ry­man Group report es­ti­mated that re­stric­tive im­mi­gra­tion poli­cies could re­sult in the loss of 417,815 jobs in the state and $14.6 bil­lion in re­tail sales a year. A mass ex­o­dus could also mean a big drop in rev­enue for Texas, which reaps about $1.5 bil­lion a year in state and lo­cal taxes from those im­mi­grants, ac­cord­ing to an anal­y­sis by the non­par­ti­san In­sti­tute on Tax­a­tion and Eco­nomic Pol­icy.

Greater Hous­ton, which has an es­ti­mated 80,000 DACA re­cip­i­ents, could lose more than $2 bil­lion in an­nual eco­nomic ac­tiv­ity from just end­ing that pro­gram and los­ing those im­mi­grants alone, ac­cord­ing to stud­ies by the Mi­gra­tion Pol­icy In­sti­tute and the Cen­ter for Amer­i­can Progress.

“Hous­to­ni­ans may dis­agree when it comes to im­mi­gra­tion, but we all seem to agree on keep­ing money in our wal­lets,” said Laura Murillo, pres­i­dent and CEO of the His­panic Cham­ber of Com­merce. “Im­mi­gra­tion ab­so­lutely has an im­pact on the greater econ­omy. We need im­mi­grants to con­tinue to go out and spend money, to make pur­chases.”

Leti­cia Al­co­cer was still a few min­utes away from the quinceañera store she has owned for 12 years when she had to make the first bar­gain of the day.

Michelle Perry, her daugh­ter and one of the em­ploy­ees at Lety’s Quinceañeras, was call­ing her cell­phone.

A client plan­ning a 15th birth­day cel­e­bra­tion for her daugh­ter, Perry ex­plained, wanted a more ex­pen­sive dress, one that usu­ally goes for $834, a cou­ple hun­dred more than the one in­cluded in the pack­age she had pur­chased. But the mother, a Mex­i­can im­mi­grant who works in re­tail, could not af­ford to pay more, even with help from padri­nos, rel­a­tives who help shoul­der the cost.

“No quiere pa­gar mas,” Perry told her mother. The client did not want to pay ex­tra.

Tears pud­dled in Al­co­cer’s eyes.

Business had slacked off at her job, she ex­plained. Ev­ery­one is afraid. In­clud­ing her.

“Esta bien,” she replied, with­out miss­ing a beat. “Daselo de pa­quete.”

It’s OK. Give it to her as part of the pack­age.

Twelve months ago, Al­co­cer would not have given in so eas­ily. But 12 months ago, cus­tomers weren’t com­ing in to can­cel par­ties or slash guest lists in half. Like they are now. They weren’t wary of go­ing shop­ping or driv­ing to stores for fear of be­ing picked up by ICE agents. Like they are now.

Al­co­cer, a U.S. cit­i­zen who em­i­grated from Mex­ico 30 years ago, built the business from “two man­nequins and two dresses” into a one-stop event-plan­ning en­ter­prise. Along­side a rain­bow ar­ray of dresses with ruf­fled skirts and glit­ter­ing bodices, Al­co­cer sells rhine­stone tiaras, em­broi­dered pil­lows, bap­tism gowns and silk bou­quets. She rents out ta­bles, fold­ing chairs and chil­dren’s in­flat­able bounce houses, of­fers cater­ing and cus­tom­ized cakes, and owns a 6,000-square-foot party hall.

For years, it was a lu­cra­tive op­er­a­tion with a loyal cus­tomer base, one rooted in tra­di­tions held dear in Latino fam­i­lies. Enough to help Al­co­cer sup­port three daugh­ters and fund their col­lege ed­u­ca­tions. Two work in the store; an­other started a bridal shop of her own.

Then, in the first month after Trump’s elec­tion, six cus­tomers — skit­tish of a com­ing back­lash against im­mi­grants liv­ing here il­le­gally — called off planned par­ties. Oth­ers post­poned func­tions or just dis­ap­peared, leav­ing be­hind de­posits. Some fam­i­lies passed up the elab­o­rate quinceañera rit­ual for a pic­ture of the birth­day girl pos­ing in a rented dress, a man­age­able cost of $200.

About half of Al­co­cer’s nor­mal rev­enue evap­o­rated. She has started think­ing about sell­ing the store.

“I’ve never had prob­lems like this with business be­fore,” said Al­co­cer, as she stood be­hind the counter. “This new pres­i­dent is go­ing to dev­as­tate our lives.”

Just then, Guadalupe An­drade stepped out of a dress­ing room. A few weeks ago, she was not sure she would have a 15th birth­day bash.

Her fa­ther, Crispin, who has lived in this coun­try since he was 12, had ap­plied for a green card last year and re­ceived an ap­proval let­ter in April. But he still had to re­turn to Mex­ico to fin­ish the process, leav­ing the fam­ily’s fu­ture and fi­nances un­cer­tain.

“We were ter­ri­fied,” said her mother, An­gelina, a nat­u­ral­ized U.S. cit­i­zen. They didn’t know if the cur­rent po­lit­i­cal cli­mate would trip up the process. They didn’t know if Crispin would be al­lowed to re­turn from Mex­ico.

So the fam­ily cut back on ex­penses. The quinceañera — which her mother had dreamed of since her only daugh­ter was born — was put on hold.

Ear­lier this month, the cou­ple flew to Mex­ico and re­turned with Crispin An­drade’s le­gal res­i­dency. They sched­uled Guadalupe’s party for July — six months late.

In­side Al­co­cer’s store, Guadalupe posed in a pale pink gown, adorned with sparkling se­quins and a flow­ing skirt re­sem­bling a cloud of cot­ton candy. The raven­hair teenager twirled around and smiled. “Esta bonita,” said her mother. “It feels good,” said Guadalupe.

“It’s on sale,” said Al­co­cer.

Rubi and Pedro barely had a chance to look at tan­ger­ines in the Wal­mart gro­cery store aisle when their 8-year-old, Alin Ashley, tugged on her fa­ther’s shirt.

“Can we please? Can we please?” the girl pleaded. Her 11-year-old brother, Ian, rolled his eyes.

“Only to look,” Pedro con­ceded.

Ashley sprinted away to the toy aisle. Pedro in­structed Ian to keep an eye on her.

Rubi shook her head in dis­ap­proval while her 3-year-old, Ilem, fid­geted in the shop­ping cart’s child seat.

The fam­ily, all liv­ing here il­le­gally ex­cept for the youngest, came to buy gro­ceries that would need to last two weeks on a bud­get. With only $70 to spend, Wal­mart re­mains their best op­tion for cheap prices.

Many ma­jor re­tail­ers are notic­ing dwin­dling sales in Latino com­mu­ni­ties, with as much as an 11 per­cent drop over a pe­riod of sev­eral months, said Tar­get CEO Brian Cor­nell at For­tune’s Brain­storm Tech con­fer­ence in July.

“If there’s one thing that’s con­cern­ing to me, and should be con­cern­ing to a lot of us, is a recog­ni­tion that over the last few months the His­panic con­sumer in the U.S. is shop­ping much less,” he said. “There’s al­most a co­coon­ing fac­tor. They are stay­ing at home. They’re go­ing out less of­ten, and par­tic­u­larly along bor­der towns in the United States, you’re see­ing a change in be­hav­ior.”

Dur­ing the sec­ond quar­ter earn­ings call of O’Reilly Auto Parts, CEO Gre­gory L. Henslee noted less traf­fic in the com­pany’s pre­dom­i­nantly His­panic mar­kets, in­clud­ing South Texas.

For Lati­nos like Pedro and Rubi, who re­quested their last name not be pub­lished, the risk of be­ing de­tained has con­vinced them to cut down on ma­jor ex­penses.

Pedro had saved up for over a year to buy a new car. As soon as Gov. Greg Ab­bott signed Se­nate Bill 4 into law in May, he and Rubi agreed to forgo the pur­chase, choos­ing in­stead to be­gin an emer­gency sav­ings fund. If the law is fully en­acted once the courts have fi­nally ruled, they have de­cided, they would move to an­other state.

As Rubi got in line at the cash register, Alin Ashley ar­rived car­ry­ing a My School Girl doll half her height. Ian shook his head. Toys weren’t on the gro­cery lists any­more like they used to be.

Pedro scanned the box un­der a price checker. The screen read $27.95.

“One day’s pay,” Rubi scolded her daugh­ter. “What is wrong with you?”

She or­dered the girl to put the doll back.

Both Pedro and Rubi work in restau­rants, as a waiter and cook. With fewer Lati­nos com­ing in to eat, their tips have suf­fered. Rubi lost a full hour of her shift after man­age­ment re­al­ized the days of a packed lunch rush were gone.

The cou­ple is among those who no longer eat out, choos­ing to save money by cook­ing all their meals. Even a McDon­ald’s Happy Meal is now too much of a lux­ury. Alin Ashley re­joined her par­ents at the check­out line, car­ry­ing a ma­genta doll dress with a $9.57 price tag.

Pedro and Rubi be­gan to bicker: We can af­ford it. No, we can’t. She re­ally wants it. Who cares?

On and on the par­ents went, as Alin Ashley pouted.

Only the cashier no­ticed as Ian yanked the dress off the con­veyer and slipped away to re­turn it.

Marie D. De Je­sus / Hous­ton Chron­i­cle

Sales have be­come so slug­gish at E-Mily’s Bou­tique that owner Emilia Al­varez has re­sorted to of­fer­ing tailor­ing ser­vices on credit.

God­ofredo A. Vazquez / Hous­ton Chron­i­cle

Pedro and his fam­ily have cut back on spend­ing, in­clud­ing on gro­ceries, since Don­ald Trump’s in­au­gu­ra­tion in case they have to re­turn to Mex­ico or seek le­gal ser­vices. On the other side of the check­out aisle, even ma­jor re­tail­ers have no­ticed a de­cline in sales in Latino com­mu­ni­ties.

God­ofredo A. Vaquez pho­tos / Hous­ton Chron­i­cle

Crispin An­drade hugs his daugh­ter, Guadalupe, in­side Lety’s Quinceañeras store in Hous­ton. The fam­ily post­poned Guadalupe’s quinceañera when her fa­ther had to travel back to Mex­ico to com­plete his ap­pli­ca­tion for U.S. res­i­dency, not know­ing whether he would be al­lowed back into the United States.

Lety Al­co­cer, cen­ter, sells ev­ery­thing fam­i­lies need to throw a quinceañera, like this dec­o­rated arch, at her store, which has seen business dra­mat­i­cally drop.

Rubi talks about how her fam­ily is cut­ting back on eat­ing out and buy­ing toys for their three chil­dren. They plan to leave Texas if the courts al­low Se­nate Bill 4 to be fully en­acted.

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