opportunities & challenges for minorities and immigrants in the united states and new england

Opportunities and Challenges for Minorities and Immigrants in the United States and New England

Alvaro LimaPresentation to the Hispanic Chamber of Commerce - 2007Director of ResearchBoston Redevelopment Authority

Demographic trends show that minority groups and immigrants constitute an increasingly important segment of the country’s population:

•

Minorities and immigrants will play an increasingly significant role in the social and economic life of

the United States.

Socioeconomic Setting

• By the year 2020 minorities are expected to constitute 36% of the total US population, up from about 24% today (exhibit 1).

• Minorities will account for 60% of New England’s population growth through 2010 (exhibit 2).

• Net of immigration, the change in total population during the period 1990-1994 in Massachusetts is negative (exhibit 3).

• Minorities and immigrants constitute an important segment of the country’s economy. They represent a third of future labor force entrants and roughly a $500-$600 billion market.

Due to adjustments in the US economy (including a shift toward service industries, technological changes and the downsizing of larger firms) the small business sector is gaining in relative importance:

Small businesses will constitute a “land of opportunity” for minorities and immigrants. Increasing minority ownership should help to

increase the rate at which minorities benefit from job creation.

• Small businesses account for more than 99% of the 20.1 million nonfarm businesses in the United States (exhibit 4).

• Independent small businesses employ more than half of the nation’s private-sector workforce and have been the primary source of job growth in the country (exhibit 5). By some estimates, they will employ 70% of the nation’s workers by the year 2000.

• The number of sole proprietorships increased to 15 million in 1991, up from 5.8 million in 1970. In 1990, Women owned about 32% of the nation’s sole proprietorships, up from 26% in 1980.

• Minority-owned businesses in the United States tend to employ far more minorities than do nonminority-owned businesses (exhibit 6).

The same factors fueling the growth of small businesses (shift to service industries, technological changes, and downsizing) are behind the growing self-employment “sector”:

Self-employment is becoming a regular and stable way to increase income, to build a credit record,

and to learn business skills.

• The number of self-employed workers increased from 7 million in 1970 to 10.3 million in 1993. The number in agriculture declined, while the self-employed in other industries rose from 5.2 million to 9 million in the same period.

• A growing number of persons work at home for pay in managerial, technical, sales and service occupations in addition to people involved in production, craft, and repair.

• Women own 66% of businesses that are based in the home and the percentage of men who are starting home-based businesses is growing.

Despite the growing importance of minorities and immigrants their access to economic resources and opportunities continues to be limited:

In order to capitalize on positive demographic and economic trends, new ways of overcoming barriers

must and can be explored.

• According to the 1987 US Census, small African-American-owned firms were able to leverage only $.89 of debt per dollar of owner equity, while white-owned firms leverage twice that amount.

• While 20% of white families received more than $50,000 in 1985, only 7% of black families and only 8% of Hispanic families made that much.

• Blacks and Hispanics are also far less likely to enjoy income from ownership rather than work. Less than 1% received more than $10,000 in property income in 1983.

• High unemployment rates afflict blacks and Hispanics more than whites. In 1986, 14.8% of black workers and 10.6% of Hispanic workers couldn’t find jobs, while 6.8% of whites were in the same predicament.

• Between 1956 and 1976, minorities narrowed the gap between their earnings and those of white workers. After 1979; however, data for blacks and Hispanic workers suggests that the gap began to widen.

increaseownership

Increase employment

increase income

promoteasset-building

and wealth creation

The Asset-building and Wealth Creation Cycle

US Resident and Minority Populations 1980 - 2020(population in millions)

Source: US. Bureau of the Census Exhibit 1

US Resident and Minority Populations 1980 - 2020(population in millions)


Actual & Projected 1980 1990 2000 2010 2020

Total 226.5 249.4 274.8 298.1 322.7

Non-minority 180.6 188.8 196.7 201.7 206.2

MinorityMinority 45.9 45.9 60.6 60.6 78.1 78.1 96.4 96.4 116.5 116.5African-American 26.1 29.4 33.8 38.2 42.9Hispanic 14.6 22.4 30.6 39.3 49.0Asian and other 5.2 8.7 13.7 18.9 24.6

White Black Hispanic Asian

State 1995 2010 1995 2010 1995 2010 1995 2010

Connecticut 2,915 2,960 293 347 258 38 60 99

Maine 1,217 1,283 5 5 9 15 8 14

Massachusetts 5,445 5,387 340 393Massachusetts 5,445 5,387 340 393 342 510 180 07 342 510 180 07

New Hampshire 1,109 1,236 7 10 13 24 14 31

Rhode Island 927 93 44 51 58 95 25 46 Vermont 570 60 2 4 4 8 4 9

New England 12,183 12,408 691 810 684 1,035 291 506

Population by Race/Ethnicity in New England - 1995 versus 2010(population in thousands)


Immigration and Total Population Change (in thousands)

Source: US Bureau of the Census and the US Immigration and Naturalization Service Exhibit 3

Foreign Immigrants Change in Total Population (1990-1994)

1990-1994 Actual Net of Immigration

State Connecticut 30 (12) (42) Maine 3 12 9 Massachusetts 67Massachusetts 67 25 (42) 25 (42) New Hampshire 4 28 24 Rhode Island 6 (7) (13) Vermont 2 17 15 New England 112 63 (49) Total US 3258 11,623 8,365

66

1010

122122

684684

5,3545,354

Number of Businesses, by Establishment Size in the US(in thousand)

1,000 or more employees

500 to 1,000 employees

100 to 499 employees

20 to 99 employees

Under 20 employees

Source: US Census Exhibit 4

13.6

6.2

-3.5

Small/Medium(<500 employees)

Large(>500 employees)

Fortune 500

Net Jobs Created by Company Size in the US 1980-1990(millions of jobs)

Source: Small Business Administration Exhibit 5

no minority employees

1-24% minority employees




100% of companies = 54,000 46,500 69,200 1,932,000

10%

4%4%

9%

73% 73% 59%

27%

9%

12%

5%

10%

53%6%

7%

16%10%

Minority Employment by Owner Ethnicity in the US(percent of companies)

Source: 1987 Census; Exhibit 6

4%4%

Latinoowner

AfricanAmericanowner

Otherminorityowner

Nonminoritymaleowner

10%