Calidad y ConfianzaCalidad y Confianza (Quality & Trust): (Quality & Trust):Latino Entrepreneurship in North Carolina Latino Entrepreneurship in North Carolina

and Beyondand Beyond

David GriffithDavid GriffithRicardo Contreras & Ed KissamRicardo Contreras & Ed Kissamwith the research assistance of:with the research assistance of:

Anna Garcia, Brianna Mullis, Anna Garcia, Brianna Mullis, and Juan Pablo Servínand Juan Pablo Servín

Brief History of Latino Settlement in Brief History of Latino Settlement in North CarolinaNorth Carolina

Latino settlement traces its origins to changes in Latino settlement traces its origins to changes in Texas & Florida agriculture and rural communities Texas & Florida agriculture and rural communities of the 1960s. of the 1960s. – Mechanization of cotton & sugar beets changed migrant Mechanization of cotton & sugar beets changed migrant

itineraries.itineraries.– Texas-based Latino families moved into Florida Texas-based Latino families moved into Florida

agriculture and, during summer, moved up the Eastern agriculture and, during summer, moved up the Eastern Seaboard (Cindy Hahamovich).Seaboard (Cindy Hahamovich).

– Latino migrant crews gradually replaced African-Latino migrant crews gradually replaced African-American and Caribbean migrant crews.American and Caribbean migrant crews.

1986 IRCA legalizes 1.7 million SAWs, initiated 1986 IRCA legalizes 1.7 million SAWs, initiated rapid growth of Latinos in “new destinations”rapid growth of Latinos in “new destinations”

Early Phases of Latino SettlementEarly Phases of Latino Settlement

1980s: Some settlement of single males out of 1980s: Some settlement of single males out of agriculture and into food processing.agriculture and into food processing.

1986-1990: Legalization of SAWs stimulates 1986-1990: Legalization of SAWs stimulates increased information exchange across border; increased information exchange across border; elaboration of linkages among elaboration of linkages among coyotes, raiteros, coyotes, raiteros, and labor contractors.and labor contractors.

1987-1994: Primarily single males, but women 1987-1994: Primarily single males, but women and children joining young men; beginning of and children joining young men; beginning of movement into other economic sectors movement into other economic sectors (construction, landscaping, fast food, etc.)(construction, landscaping, fast food, etc.)

Late 1980s- early 1990s: first Latino Late 1980s- early 1990s: first Latino businesses founded (1993 in our study).businesses founded (1993 in our study).

Later Phases of Latino SettlementLater Phases of Latino Settlement

1994-1999: Further growth of women and 1994-1999: Further growth of women and children = more contact with schools, health care children = more contact with schools, health care centers, churches, etc. Increased demand for centers, churches, etc. Increased demand for native foods, health care products.native foods, health care products.

2000: Census figures show 400+% jump in NC 2000: Census figures show 400+% jump in NC Latino Population.Latino Population.

2000-2006: Steady growth and expansion of 2000-2006: Steady growth and expansion of Latino population & elaboration of business Latino population & elaboration of business presence.presence.

2007-present: Increased ICE raids, surveillance, 2007-present: Increased ICE raids, surveillance, and partnerships; economic contraction and partnerships; economic contraction (particularly in construction); some Latino (particularly in construction); some Latino businesses have been forced to close.businesses have been forced to close.

Current Study: 2008-2010Current Study: 2008-2010 USDA Community Development InitiativeUSDA Community Development Initiative Concentrated in 4 NC Counties: Duplin, Henderson, Concentrated in 4 NC Counties: Duplin, Henderson,

Johnston, and Wilkes. Johnston, and Wilkes. Work also going on in 3 to 4 communities in Iowa Work also going on in 3 to 4 communities in Iowa

(Marshalltown, Columbus Junction, West Liberty, and (Marshalltown, Columbus Junction, West Liberty, and Postville).Postville).

Early, related work in Pitt County: inventory with Ricardo Early, related work in Pitt County: inventory with Ricardo Contreras (funded by ECU).Contreras (funded by ECU).

Cultural Mapping/ inventories of Latino businesses by Cultural Mapping/ inventories of Latino businesses by county (attempt to contact 90-100% of businesses).county (attempt to contact 90-100% of businesses).

Follow-up interviews with sub-sample.Follow-up interviews with sub-sample. Develop business training curriculum.Develop business training curriculum. Goal: Strengthen network of Latino businesses and its Goal: Strengthen network of Latino businesses and its

relation to business services & institutions (e.g. credit relation to business services & institutions (e.g. credit unions, Chambers of Commerce, universities & colleges).unions, Chambers of Commerce, universities & colleges).

Types of Businesses Encountered Types of Businesses Encountered as of May 31, 2009 (n=98)as of May 31, 2009 (n=98)

Grocery/ Variety Stores (“Tiendas”), many Grocery/ Variety Stores (“Tiendas”), many with restaurants or food services—40%with restaurants or food services—40%

Restaurants/ Taquerías, Bakeries, or other Restaurants/ Taquerías, Bakeries, or other food specialties—26%food specialties—26%

Services (tax services, beauty salons, Services (tax services, beauty salons, packaging)—13%packaging)—13%

Clothing stores—8%*Clothing stores—8%* Other (auto mechanics/sales, music stores, Other (auto mechanics/sales, music stores,

book stores, etc.)—13%book stores, etc.)—13%*many *many TiendasTiendas sell clothing as well. sell clothing as well.

Venues of Latino BusinessesVenues of Latino Businesses

Flea markets (food stalls, some clothing, Flea markets (food stalls, some clothing, refreshments)refreshments)

Downtown streets of small rural Downtown streets of small rural communities (e.g. Faison)communities (e.g. Faison)

Clustered into strip malls within close Clustered into strip malls within close proximity of Latino neighborhoods/ trailer proximity of Latino neighborhoods/ trailer parks (often 2-3 close to one another)parks (often 2-3 close to one another)

Individual Homes (e.g. packing lunches, Individual Homes (e.g. packing lunches, making cakes, food for sale at construction making cakes, food for sale at construction sites)sites)

Origins of Business Owners (and Origins of Business Owners (and customer base)customer base)

Not much clustering of business owners by region of origin, Not much clustering of business owners by region of origin, reflecting the variety of networks represented in North Carolina.reflecting the variety of networks represented in North Carolina.

Mexico: Veracruz, Guerrero, Michoacán, Puebla, Guanajuato, Mexico: Veracruz, Guerrero, Michoacán, Puebla, Guanajuato, Jalisco, Morelos, Hidalgo, Nuevo Leon, Oaxaca, Mexico DF, Jalisco, Morelos, Hidalgo, Nuevo Leon, Oaxaca, Mexico DF, Zacatecas, Durango, Nayarit, Tamaulipas, Sinaloa Zacatecas, Durango, Nayarit, Tamaulipas, Sinaloa [no single [no single sending state dominates]sending state dominates]

Honduras: El Colón, La Ceiba, Tegucigalpa, Atlanitida, TelaHonduras: El Colón, La Ceiba, Tegucigalpa, Atlanitida, Tela GuatemalaGuatemala El Salvador: San Salvador, La UnionEl Salvador: San Salvador, La Union ArgentinaArgentina Venezuela (and Palestine to Venezuela)Venezuela (and Palestine to Venezuela) Dominican RepublicDominican Republic Puerto RicoPuerto Rico United States (married to Latino co-owners)United States (married to Latino co-owners)

Customers: All states of Mexico, Central America, South America, Customers: All states of Mexico, Central America, South America, United States, Africa, and Asia.United States, Africa, and Asia.

Latino BusinessesLatino Businesses

Business Establishment ProcessBusiness Establishment Process

Most funded with owner savings or from loans Most funded with owner savings or from loans from family members; few use financial from family members; few use financial institutions beyond personal credit cards.institutions beyond personal credit cards.

Many business owners had little to no formal Many business owners had little to no formal business training or experience, but a few come business training or experience, but a few come from highly entrepreneurial families.from highly entrepreneurial families.

Several have experience working in other parts of Several have experience working in other parts of the U.S. prior to coming to NCthe U.S. prior to coming to NC

Some depend on the work of other family Some depend on the work of other family members to keep the business running.members to keep the business running.

Most have expanded from more modest origins to Most have expanded from more modest origins to larger, more diverse operations, paying attention larger, more diverse operations, paying attention to customers’ desires.to customers’ desires.

General ObservationsGeneral Observations Many businesses offer a variety of goods and Many businesses offer a variety of goods and

services (e.g. operating restaurant and grocery services (e.g. operating restaurant and grocery store with billiard tables and wire transfer store with billiard tables and wire transfer services).services).

Business names often reflect origins of business Business names often reflect origins of business owners (e.g. Tienda La Michoacana).owners (e.g. Tienda La Michoacana).

Businesses are as likely to be owned/ operated by Businesses are as likely to be owned/ operated by women as by men.women as by men.

While businesses are owner-operated/ managed, While businesses are owner-operated/ managed, few rely exclusively on family for staffing needs; few rely exclusively on family for staffing needs; hence, they are a source of employment for the hence, they are a source of employment for the Latino community.Latino community.

Restaurants often cater either to Latinos or to Restaurants often cater either to Latinos or to Anglos (Tex-Mex), although some overlap.Anglos (Tex-Mex), although some overlap.

Typology of Goods and Services, Typology of Goods and Services, part 1part 1

Home country food products (e.g. baked goods, Home country food products (e.g. baked goods, cactus, spices, specialty cut and spiced meats)cactus, spices, specialty cut and spiced meats)

Migration industry products (e.g. wire transfers, Migration industry products (e.g. wire transfers, phone cards, packaging services, travel services phone cards, packaging services, travel services to Mexico/ Central America)to Mexico/ Central America)

Latino entertainment/ educational services (e.g. Latino entertainment/ educational services (e.g. local bands, dish antennae installation, books, local bands, dish antennae installation, books, billiards, game rooms)billiards, game rooms)

Nostalgia products (tortillas, special Honduran red Nostalgia products (tortillas, special Honduran red beans, home country CDs/DVDs)beans, home country CDs/DVDs)

Products related to work (income tax services, Products related to work (income tax services, box lunches, food sold at worksites)box lunches, food sold at worksites)

Typology of Goods and Services, Typology of Goods and Services, part 2part 2

Products related to Latino ceremonial life Products related to Latino ceremonial life (baptism/wedding clothing, votive candles, Virgin (baptism/wedding clothing, votive candles, Virgin de Guadalupe images)de Guadalupe images)

Health & beauty products (beauty salon services, Health & beauty products (beauty salon services, medicines, perfumes, herbal treatments)medicines, perfumes, herbal treatments)

Retail products (e.g. from Sam’s Club/ Wal-Mart) Retail products (e.g. from Sam’s Club/ Wal-Mart) that are repackaged in Latino cultural settings.that are repackaged in Latino cultural settings.

Products requiring trust, common cultural Products requiring trust, common cultural background, or specific communication background, or specific communication (mechanic services, legalization document (mechanic services, legalization document services, translation services, native health care)services, translation services, native health care)

Other Goods & Services Provided Other Goods & Services Provided to Assist Local Latino Populationto Assist Local Latino Population

Flyers, information for migrant farm workers (clinics, Flyers, information for migrant farm workers (clinics, Telemon, migrant education)Telemon, migrant education)

Information about other Latino businesses, particularly Information about other Latino businesses, particularly those run out of homes or vehicles (making cakes for those run out of homes or vehicles (making cakes for quinceañeras/ bodas, tax services)quinceañeras/ bodas, tax services)

Information about U.S.-owned businesses (lawyers, satellite Information about U.S.-owned businesses (lawyers, satellite dish networks)dish networks)

Information about local events relevant to Latinos (Latino Information about local events relevant to Latinos (Latino bands/ concerts, visits from the consulate, Latino fiestas/ bands/ concerts, visits from the consulate, Latino fiestas/ summits)summits)

Housing information: rentals, sales, Housing information: rentals, sales, Transportation information: auto sales, bus routes, etc.Transportation information: auto sales, bus routes, etc. Gatekeeper information: which physicians, translation Gatekeeper information: which physicians, translation

services, etc. are the most trustedservices, etc. are the most trusted

Problems Latino Businesses FaceProblems Latino Businesses Face

Number 1: Economic contraction, particularly in construction Number 1: Economic contraction, particularly in construction (construction jobs down from 477,000 in 2007 to 239,000 in (construction jobs down from 477,000 in 2007 to 239,000 in December, 2008—7.6%, or around 20,000 jobs—were lost in the December, 2008—7.6%, or around 20,000 jobs—were lost in the last half of 2008).last half of 2008).

Return to agriculture from construction among some Latinos has Return to agriculture from construction among some Latinos has meant changing from year-round to seasonal residence; during meant changing from year-round to seasonal residence; during winter, many move to Florida.winter, many move to Florida.

Increased raids on packing plants have led some employers to fire Increased raids on packing plants have led some employers to fire undocumented Latinos.undocumented Latinos.

Increased ICE surveillance and ICE-local law enforcement Increased ICE surveillance and ICE-local law enforcement partnerships (in some cases watching Latino businesses) has led partnerships (in some cases watching Latino businesses) has led to reduced mobility within communities.to reduced mobility within communities.

Security/ robberies/ break-ins occasionally a problem (dealing with Security/ robberies/ break-ins occasionally a problem (dealing with large amounts of cash from money transfers) and in some cases in large amounts of cash from money transfers) and in some cases in less secure locations (isolated country settings, strip malls in poor less secure locations (isolated country settings, strip malls in poor sections of towns).sections of towns).

Locations occasionally a problem: seeking low rent, they often end Locations occasionally a problem: seeking low rent, they often end up in locations that are somewhat off the beaten track.up in locations that are somewhat off the beaten track.

Importance of Importance of Calidad Calidad (Quality)(Quality) Many redundant goods and services, with most Many redundant goods and services, with most

tiendas, tiendas, for example, selling the same products for example, selling the same products as others (and as Food Lion, Wal-Mart) and as others (and as Food Lion, Wal-Mart) and providing the same or similar services. providing the same or similar services.

Hence, providing quality goods and services is Hence, providing quality goods and services is important.important.

Two senses of quality:Two senses of quality:– Quality product in the sense of produced with care, fine Quality product in the sense of produced with care, fine

ingredients, etc. (e.g. ingredients, etc. (e.g. pan, tortillas, pan, tortillas, or trusted wire or trusted wire transfer services)transfer services)

– Qualitatively distinct or unique: specialty products from Qualitatively distinct or unique: specialty products from home or offered in home or offered in TiendaTienda with specialty goods/ services with specialty goods/ services from home country, offered from someone who also from home country, offered from someone who also helps organize soccer tournaments, offered with general helps organize soccer tournaments, offered with general advice regarding getting along in a foreign land…advice regarding getting along in a foreign land…

Importance of Importance of confianza confianza (trust)(trust) Trust important to a population that is partially in the Trust important to a population that is partially in the

shadows: Latino households/ families rarely include only shadows: Latino households/ families rarely include only one status, but usually a mix of documented and one status, but usually a mix of documented and undocumented.undocumented.

Creation of spaces of trust is critical to the development of Creation of spaces of trust is critical to the development of social capital (networks that can be marshaled for social capital (networks that can be marshaled for economic, political, and other purposes).economic, political, and other purposes).

Creating trust is critical to establishing and maintaining a Creating trust is critical to establishing and maintaining a client base.client base.

Trust can be a form of credit in the absence of credit from Trust can be a form of credit in the absence of credit from financial institutions (for both customers needing temporary financial institutions (for both customers needing temporary credit and owners seeking loans from family, friends).credit and owners seeking loans from family, friends).

Trusting relationships include relations between business Trusting relationships include relations between business owners and customers, between owners and suppliers, owners and customers, between owners and suppliers, among owners for advice, and among customers.among owners for advice, and among customers.

General Importance of Latino General Importance of Latino Businesses to the Latino CommunityBusinesses to the Latino Community

Expanding Expanding confianza confianza among the Latino population among the Latino population generally, as well as providing quality products.generally, as well as providing quality products.

Offering culturally comfortable spaces for Offering culturally comfortable spaces for gathering & information exchange.gathering & information exchange.

Providing spaces of resistance to ICE, abusive Providing spaces of resistance to ICE, abusive employers, etc.employers, etc.

Participating in the formation of soccer leagues/ Participating in the formation of soccer leagues/ sponsoring teams.sponsoring teams.

Bridging immigrants’ community/ state-based (or Bridging immigrants’ community/ state-based (or paisanopaisano)) networks (bridging social capital).networks (bridging social capital).

Bridging immigrant and native community Bridging immigrant and native community networks.networks.

Future DirectionsFuture Directions Development of business courses tailored to Latino Development of business courses tailored to Latino

business owners or future owners.business owners or future owners. Targeting fully bilingual youth through civic engagement Targeting fully bilingual youth through civic engagement

research to become leaders, in business and civic life (e.g. research to become leaders, in business and civic life (e.g. Jovenes Latinos en Acción)Jovenes Latinos en Acción)..

Developing/ expanding business services and products:Developing/ expanding business services and products:– Latino Credit UnionLatino Credit Union– Mountain Biz Works: non-profit in Hendersonville dedicated to Mountain Biz Works: non-profit in Hendersonville dedicated to

training and financing small business (works with Latino training and financing small business (works with Latino clients).clients).

– Transfercel: new card developed by UCLA researchers in Transfercel: new card developed by UCLA researchers in conjunction with microfinancers in Mexico that works with cell conjunction with microfinancers in Mexico that works with cell phones to assist with money transfers and other financial phones to assist with money transfers and other financial transactions.transactions.

Developing/ expanding networks of institutions available to Developing/ expanding networks of institutions available to assist Latino business owners (e.g. AMEXCAN, Community assist Latino business owners (e.g. AMEXCAN, Community Colleges, Universities)Colleges, Universities)

Thanks ToThanks To

The NC Latino Business CommunityThe NC Latino Business Community

East Carolina UniversityEast Carolina University

AMEXCAN AMEXCAN

Juvencio Rocha PeraltaJuvencio Rocha Peralta

US Department of AgricultureUS Department of Agriculture

Aguirre Division of JBS InternationalAguirre Division of JBS International