Presentation to the Hispanic American Chamber of Commerce regarding opportunities and challenges to minorities and immigrants in the United States and New England

1. Opportunities and
Challenges for Minorities
and Immigrants in the
United States and New
England
Alvaro Lima
Presentation to the Hispanic Chamber of Commerce -
2007
Director of Research
Boston Redevelopment Authority

2. Socioeconomic Setting
Demographic trends show that minority
groups and immigrants constitute an
increasingly important segment of the
country’s population:
•
• 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.
Minorities and immigrants will play an
increasingly significant role in the social and
economic life of the United States.

3. 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 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).
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.

4. The same factors fueling the growth of small
businesses (shift to service industries,
technological changes, and downsizing) are
behind the growing self-employment “sector”:
• 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.
Self-employment is becoming a regular and
stable way to increase income, to build a
credit record, and to learn business skills.

5. Despite the growing importance of minorities
and immigrants their access to economic
resources and opportunities continues to be
limited:
• 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.
In order to capitalize on positive demographic
and economic trends, new ways of overcoming
barriers must and can be explored.

6. The Asset-building and Wealth Creation Cycle
increase
ownership
Increase
promote
employment asset-building
and wealth
creation
increase
income

7. US Resident and Minority Populations 1980 --
US Resident and Minority Populations 1980
2020
2020
(population in millions)
(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
Minority 45.9 60.6 78.1 96.4 116.5
African-American 26.1 29.4 33.8 38.2 42.9
Hispanic 14.6 22.4 30.6 39.3 49.0
Asian and other 5.2 8.7 13.7 18.9 24.6
Source: US. Bureau of the Census Exhibit 1
Source: US. Bureau of the Census Exhibit 1

8. Population by Race/Ethnicity in New England - 1995 versus 2010
(population in thousands)
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 5,387 340 393 342 510 180 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
Source: US. Bureau of the Census Exhibit 2

9. Immigration and Total Population Change
(in thousands)
Foreign Immigrants Change in Total Population (1990-
1994)
1990-1994 Actual Net of Immigration
State
Connecticut 30 (12) (42)
Maine 3 12 9
Massachusetts 67 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
Source: US Bureau of the Census and the US Immigration and Naturalization Service
8,365 3
Exhibit

10. Number of Businesses, by Establishment Size in the US
(in thousand)
1,000 or more employees
6
6
10
500 to 1,000 employees
10
122
122 100 to 499 employees
684
684 20 to 99 employees
5,354
5,354 Under 20 employees
Source: US Census Exhibit 4

11. Net Jobs Created by Company Size in the US 1980-1990
(millions of jobs)
13.6
6.2
-3.5
Small/Medium Large
(<500 employees) (>500 employees)
Fortune 500
Source: Small Business Administration Exhibit 5

12. Minority Employment by Owner Ethnicity in the US
(percent of companies)
100% of companies = 54,000 46,500 69,200 1,932,000
no minority employees 10% 10%
16%
1-24% minority employees 4% 4%
25-49% minority employees 4% 4%
7%
50-74% minority employees 9% 9% 53%
6%
12%
10%
10%
75-100% minority employees 73% 73% 59%
5%
27%
Latino African Other Nonminority
owner American minority male
owner owner owner
Source: 1987 Census; Exhibit 6