The Latino community is one of the largest communities in the US. In the 2010 US census, it was estimated that the Hispanic community was 50.5 million. That is 16% of the US population. And by 2050, it is expected to double to 30%. This shows that the Hispanic community has an effect on the geo political landscape of the economy. And it will only become more significant. And yet they are the second most discriminated group after African Americans.
In 2011, there was a study done for the Latino nation to gauge education standards. It found out that less than 30% of Latino students graduated from high school. Advanced college degrees were earned by less than 4% of the students. This means that for most Latinos getting a good job is almost impossible. Some will end up doing menial jobs. And for them the situation only gets worse. 22% percent of Latino workers experienced discrimination as compared to just 6% of white workers in a study conducted by Rutgers University. This leaves some with just two options, gangs or entrepreneurship. And the latter is a safe bet.
Latinos have a number of challenges and business laws that make it difficult for them to be able to operate their businesses:
Most immigrants who come to the US are not native English speakers. Thus when they do get there, it becomes challenge for them. It is 28% of those who do get here cannot be able to converse a word in English. This makes it difficult for them to even understand the legal frame works of setting up a business. So it becomes difficult to follow by laws and taxation laws and thus cannot completely penetrate the market. It also makes it difficult to converse and serve the non Hispanic customers.
Most of the people who start entrepreneurship do it because they have no other option. Since they do not possess the requisite skills to operate a business, they end up with not having to even understand the legal requirements of starting one. This will raise legal issues that if not paid for may lead to having to go to jail. Every state has its own by-laws that have to be met but most people do not know it and might end up breaking laws that will ultimately land them in trouble. There is a saying that information is power so not having the necessary information leads them to not being able to succeed in their start ups.
For most start ups to succeed they tend to need capital that will help them launch. But for most Latinos getting that start up is a problem. After the 2008 financial crisis, the banking sector has become more restrictive to who it gives funding. Congress after the crisis passed a bill to treat all banks with $50 billion the same. This then made regional banks comply with the rules and end up spending over $2 billion in regulations yearly. These systematic regulations have made regional banks reduce spending. And it is with this bureaucracy that small and middle level businesses end up not getting the much needed capital to be able to start. And when you throw in race classification, it even becomes more difficult for them to access the capital.
The collateral needed in order to secure a loan is usually too high for entrepreneurs to even be able to access loans when they do finally get it. Most banks cannot insure loans without a form of collateral like a house, car, title deed or other forms of assets. Yet these families cannot or do not have such assets. Especially immigrants who left everything else back at home, they are left with having to find other means of getting the assets of the financing. The bureaucratic processes followed by banks usually ends up stifling entrepreneurial growth for the community.
With the number of ideas and businesses that rise up every day, it is easy to come up with the same ideas. And not being able to have access to such information may lead to copyright infringement. The legal setback to such entrepreneurs becomes what ends up finishing them. The laws that protect trademarks in the country carry serious punishments and with it might end up discouraging more entrepreneurs from starting up so as not to infringe on other copyrights. This still needs to be addressed as lack of information so that whenever they want to start they can be able to verify if what they have someone else does not.
Having employees is one the best things because it shows a growth in business. But that comes with its own disadvantage, not having policies and non disclosure agreements. Businesses have to draft policies on sexual harassment and dress code so as to avoid legal issues that come from being sued. And employees have to sign to show they read up and agreed on the policies. Also non disclosures are important because they prevent an employee from stealing ideas from the business and taking it to a rival.
This is a major issue facing the community because it is not the only one that has unemployed workers. Now jobs that were known to be done by them like cutting grass and taking small time jobs are being taken by white people. And in this sector with unemployment still being a major issue, most people are turning towards entrepreneurship as a means to survive. And the problem with this is that some businesses, since they can’t be patented, end up being duplicates. When this happens the supply increases and the demand reduces thus causing people to either start taking less and less profit or change tack. Sometimes making them begin from scratch.
Getting the location as a Latino is an issue. Majorly the biggest one being discrimination by race. In the 2008 crisis, the number of Latino home owners had dropped by 4% to 47.8%. And because of this it led to segregation of the Latino community to specific areas. This segregation had led to the discrimination of Latinos in getting new houses or buildings. Due to this a number of complaints have been filed with the US Department of Housing and Urban Development with 8% being charged against national origin of the Latinos as a reason. The chance for even having an opportunity to start a business reduces drastically for the community. In conclusion, the major issue that most Latinos end up facing is the education and training on entrepreneurial practices and end up needing good legal counsel. The South Florida area is full of Hispanics and therefore the need for a good business lawyer is essential. With having that training, the legal and business laws that are set up would be well understood by the community and would at least see in the growth of the community economically.