President Joe Biden and U.S. Treasury Secretary Janet Yellen acknowledged the toll the pandemic has taken on Latino businesses and workers and reassured them Tuesday that they are getting help to bounce back and would be key in leading the latest economic recovery.
“I know how hard it’s been the last two years. It isn’t easy to hang a closed sign on a dream or a family legacy that you poured your heart into building,” Biden said to the virtual U.S. Hispanic Chamber of Commerce’s legislative summit.
Biden and Yellen said Latinos would be helped by the first pandemic relief package passed under the administration, the American Rescue Plan.
Biden pointed to some of the assistance, including emergency support for rehiring employees, a Small Business Opportunity Fund, grants for “mom-and-pop restaurants, food trucks and food stands” and community navigators to connect small businesses with programs for people without bankers.
“We know Latinos historically face discrimination when it comes to securing support for their businesses,” Biden said.
“We have a lot of work ahead, but together we are going to get our economy on track and hang an open sign on tens of thousands of Latino small businesses once again,” he added.
Building support among Latino business owners is critical for Democrats who often face strong competition from Republicans for the constituency.
Yellen said the disproportionate hit on Latinos won’t be as long-lasting as other economic recessions and Latinos would drive the recovery.
“Hispanic entrepreneurs can lead us out of a crisis again,” she said. “I know Hispanic workers can power our recovery, potentially in an even bigger way than a decade ago, so long as we remove the long-standing barriers that have been in your way.”
Yellen said Latinos were disproportionately hit in four previous economic recessions: stagflation in the ’70s, the recession of the early ’80s, the first dot-com bubble and the Great Recession in the 2000s.
The crisis is one that if someone designed an economic crisis to unduly harm the Hispanic community, “they would probably come up with something that looks like Covid-19,” Yellen said.
“At the end of the day, it will probably still be true that the pandemic economy followed the historic trend and hit the Hispanic community harder than many other groups,” she said.
But she said she believes people will be ready to bounce back and be back in full employment by next year.
Latino workers ‘central’ during Covid, but ‘support not returned in kind’
“In fact, if history is any guide, Hispanic-owned businesses will drive a large portion of the recovery,” Yellen said.
That downward slide came as Latinos were just returning to earnings and wealth equivalent to the levels they held before the Great Recession hit in the 2000s.
The latest recession has been seen as potentially decimating Latino wealth.
Businessman Victor Arias, a USHCC board member, said approval rates for loans for Latino businesses remain very low. Businesses owned by Latinas have had twice the closure rate as all Latino-owned businesses. He said that in food services, one in four Latino businesses closed.
Yellen noted that in the immediate years after the Great Recession, the number of Latino businesses grew by 3.3 percent, while non-Latino-owned businesses declined by 3.6 percent. After 2012, the number of Latino-owned businesses grew at more than twice the national average.
She pointed to what she called the irony of the Latino community outperforming others in the creation of new businesses, while having less access to capital to create and grow them.
A similar contradiction is true for workers, she said. Before the pandemic, Latinas accounted for 17 percent of women in the labor force, but since the pandemic began, they accounted for 27 percent of women who’ve left it, she said.
“We know that Latinos and especially Latinas are overrepresented in the ranks of the central workers, people who kept our country afloat this past year,” she said. “But we also know that support has not been returned in kind.”
She said the administration has begun to give some of the support Latinos need through funding for child care for essential workers in the American Rescue Plan. She said the Department of the Treasury plans to inject $4 billion into Community Development Financial Institutions and Minority Depository Institutions.
The institutions helped get money to minority-owned businesses during the pandemic and lobbied for more funding for that purpose.
She urged Latino business owners to participate in virtual roundtables she is holding with business groups to share their personal stories about “what it feels like to open shop and scale up in your communities.”
“I’m confident that when someone looks back at the economic data around the pandemic, it won’t simply conclude that Hispanic businesses and workers were the victim of a 2020 economy,” she said. “They will see they were builders of a better one in 2021 and beyond.”