BUSINESSES FEELING PINCH
Crackdown has many immigrants cutting back on spending
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.
Sales have become so sluggish at E-Mily’s Boutique that owner Emilia Alvarez has resorted to offering tailoring services on credit.
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.
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.