Hispanic firms fight for survival
Pandemic crisis cuts into ‘backbone’ of regional economy
More than half of Hispanic business owners in the Houston area reported that sales have dropped since the spread of the coronavirus pandemic and nearly half have had to cut their workforce, according to a survey by the University of Houston.
The coronavirus pandemic has hit Hispanic business owners in Houston hard, with about one in four stopping or reducing rent payments and one in eight no longer spending on payroll services, sending a ripple across the broader economy, according to survey conducted by UH’s Hobby School for Public Affairs. Twenty-five percent of the businesses surveyed reported they imposed temporary salary cuts, 35 percent reduced work hours and half of the businesses said they consolidated programs to reduce costs.
Hispanics are the largest ethnic group in the Houston area, representing nearly 44 percent of the population in Harris County and 25 percent of total consumer and business spending. Hispanics also own 38 percent of small businesses in the Houston area.
“Hispanic entrepreneurs are the backbone of the regional economy,” said Pablo Pinto, director of the Center for Public Policy, the research arm at the Hobby School. “The experiences and needs of Hispanic business owners and professionals are crucial to understanding what is happening with the Houston economy and the strength of its recovery from the pandemic.”
The center surveyed members of the Houston Hispanic Chamber of Commerce in July. Most of the businesses represented reported revenues of less than $1 million and five or fewer employees. The three most common types of Hispanicowned small businesses are restaurants, professional services and manufacturing.
April and May were the toughest months for Today’s Business Solutions, an office supply firm that has operated for 17 years in
Houston. When employers sent people home to work remotely, companies didn’t need as many pens, paper and new office furniture, said Mely Jimenez, the owner of Today’s Business Solutions,
She had to cut her staff by more than half, to seven from 17. “It was a hard hit,” said Jimenez.
Health care providers, which are some of the customers, helped keep the business afloat with steady orders for bottled water, hand sanitizer, masks and cleaning products, Jimenez said. She said she is hoping that business from other customers will pick up so she can bring more employees back.
The high level of uncertainty about the local economy is making Hispanic business owners dependent on government loans and grants to make payroll and pay their bills, said Sunny M.C. Wong, an economist and professor at the Hobby School.
But many Hispanic small businesses owners have trouble accessing the government aid. When the Trump administration rolled out the new Paycheck Protection Program this spring to provide financial assistance to small businesses, many local Hispanic businesses didn’t have prior relationships with banks, many of which only took loan applications from established customers, said Laura G. Murillo, president and CEO of the Houston Hispanic Chamber of Commerce.
Chamber members couldn’t get their calls answered by bankers, she said.
The spread of coronavirus magnifies many of the difficulties already faced by Hispanics in Houston, said Murillo, including language barriers which may make it more difficult to apply for help and low levels of health care coverage because many Hispanics work in jobs that don’t provide employer-sponsored plans
In addition, many have jobs in restaurants, retail shops and grocery stores that require them to work on site instead of from home, increasing their potential exposure to the coronavirus.