Transcript

• The Inequities of Latina-Owned Businesses (with Qingfang Wang)

  Introduction:Welcome to policy chats, the official podcast of the School of Public Policy at the University of California, Riverside. I'm your host, Kevin Karami. Join me and my classmates as we learn about potential policy solutions for today's biggest societal challenges. Joining us today is Professor Qingfang Wang. I chatted with her about the challenges Latina-owned businesses face. 

   

  Kevin Karami: Dr. Wang, you are a professor of Public Policy at the UC Riverside School of Public Policy. Your research lies in immigration, the labor market, and development. You also focus on how race, immigration, and gender play roles in shaping labor market experiences and socio-economic well-being. Thank you for joining us today. 

   

  Dr. Wang: Thank you, Kevin.Thanks for this great opportunity. 

   

  Kevin Karami: Thank you, of course. So we have a lot to get into, so I want to jump straight into it. But before we dive deep into the main topic of the episode, which is the challenges latina-owned businesses face. I'd like to first briefly talk about the way race, immigration, status, and gender intersect with the labor market. So my first question is, what kinds of challenges do minority owned  female old businesses face that are completely unique to them. 

   

  Dr. Wang: Thanks for this question, Kevin. Small businesses face many challenges but minority and women-owned businesses face more challenges. For example, they like human capital such as the financial literacy and a prior business experiences, marginalization and discrimination. They also face the challenges of building social networks which are very critical for business development. And these factors further strengthen the barrier for them to access the financial capital. And also because of these barriers, many of them are in the low wage, low capital, and easy to enter industries. These industries normally offer limited markets and are more vulnerable to disastrous events just like COVID-19. So nearly all minority and women owned businesses face greater challenges in accessing the money market and knowledge management. 

   

  Kevin Karami: Thank you for that. Yeah, I think it's really important that we talk about this more since a lot of times when we're talking about in general, we talk about businesses and the challenges they face, we kind of forget to differentiate minority and female owned businesses and the specific issues that they face. So kind of as a follow-up to that, I wanted to ask, what are the major socioeconomic or policy factors that contribute to the challenges you can speak about? 

   

  Dr. Wang: Now this is a great question. I wanted to highlight three things. So first is stereotyping, discrimination, and marginalization. So we have a large number of studies including my own research that talks about these issues. For example, many of our participants talk about the experiences of failing, being discriminated against or disadvantaged as a female business owner, where people of color or a combination of both. So the second factor is the racial minority and women, the liga behind non minorities in terms of business management, education and experience. So if you look at the eye deficient or parts, I have some numbers here for you. So according to the radio aid and measurement or the mental situation council and report in 2018, African and Hispanic Americans are under-represented in the business of school administration admissions abline comparator to both the US publisher and the publisher and with a bachelor's degree. So formal education will impact the level of financial literacy, social network, building, access to financial capital, and in many other aspects of business management. So furthermore, there is significant inequality of high-tech venture capital or just general capital assets, which is extremely limited for underserved communities. For example, from 1990 to 2016, minority entrepreneurs only represented about 20%. Entrepreneurs are funded by venture capital. So as such, entrepreneurs of color and women are more likely to enter industries with low capital requirements and high fillers to stay there instead of high-growth sections. So all of these different factors contributed to difficult to scale flexing and mortar challenges when they face, that is asteroids, a few months for my team. 

   

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  Kevin Karami: Thank you. And I think that was a really great answer because you tackled it from multiple different perspectives, talking about the marginalizations and also the other challenge is that it directly impacts how these businesses and entrepreneurs and just people in general almost have these barriers up that they can't get over very easily. And it's up to the public policy sector to actually step in and help support them. You also alluded to COVID-19, which is a great transition into the next question I want to ask. So moving into Latina businesses in the inland empire, I understand that you wrote a research report on this topic specifically. And furthermore, we're obviously under COVID-19, businesses across the board have been impacted. So with that said, my first question in this topic is, how have Latina-own businesses in the inland empire been affected this year? 

   

  Dr. Wang: Thanks Kevin. We did a report before COVID and then COVID hit us. So we did a falling study based on that. So before and after colonnade, both status together help us to understand the challenges they're facing. Preach well. So in terms of the impacts, according to the National business small businesses survey in the IEEE region, 89 percent of small businesses have been reported by Moderator to have a large negative impact in early May 2020. So after one year, the percentage is still as high as almost 70 percent. So the impact on the IU region is pretty divided. They are either the personal level, business level, and community level. For example, at the business level, we found that we observed direct marketing gadgets you lock down and the social distancing, operational disruption, shortage of employees, and supply chain disruptions. There are significant ripple effects or reboot to Hamilton caused by reduced demand or shouted down on small businesses in the supply chain. For instance, then restaurants shuts down, impacts extended to real estate, that rental car, right? The food processing industry as farms, commercial insurance accounting in other businesses in the cluster and the consumption chain. Also tourism is anti to communities such as Palm Springs. They are among the hardest hit. So the impact on business is also a family we really have to look at because most small businesses that are located at home, especially for Latino owned businesses, especially for women. Childcare has prevented them from working. It is hard to keep it at the boundary between family and business. To me it is neither business , childcare nor  other families. But I also want to note that impacts are not of their own magnitude. So the majority of businesses have experienced moderate to large negative impacts. A small proportion indicated a minor or no impact. And a small proportion even reported a huge increase in demand for their services or products. So well, why does it happen? We're looking at the aspects of pivot, where we find that night more than other groups, Latina owned businesses, they expressed significant flexibility and creativity in seeking new opportunities and reinventing. So new opportunities often mean new strategies or different types of businesses. Services were projects by either strengthening the crm to focus, worship team to new field in highest demand under the pandemic. We also find that the most critical factors for Latina owned businesses to take advantage of this. New opportunities include technology, social networks, human capital community to support, and the government aid programs. Yeah, that's pretty much it

   

  Kevin Karami: Thank you. And you mentioned something really interesting there that I kind of want to kind of dive deeper in. And that was what Latina businesses tend to look at creative solutions or a path to a solution in general. Can you briefly talk about that portion specifically? Specifically how they work to find solutions that aren't conventional. Other businesses don't look towards helping kind offput the challenges that they face that are unique to them. 

  Dr. Wang: Yes. In most cases, they just expand their services. They normally don't count on this. There's not a bear that was not their mainstream, isn't. It says, for example, we have law firms. They normally focused on other aspects, but under COVID-19 that are more demanded in, for example, divorce. Unfortunately, in the some other things to sell, they include these new services to them. Some businesses do not box in the food industry before COVID, but during the COVID because the health industry is in such high demand. So they started expanding their service until there was some other digital campus. And they started, they found out digital marketing is in high demand and so they started expanding their new services and products in that. In, also, if you find a knight's, some businesses, they have embraced technology before called OK.Now they feel much easier to adapt into a new business model. But we have to point out a large number of Latino owned businesses. Like I earlier mentioned, they are in the low wage, low skill, even low skill and easy to enter industries which haven't adopted the technology that much difficulty. Now under the COVID it is much more difficult for them to do so. In ozone. The, They are very resilient in this way means they realize the challenges many of them face, rapidly reach out to their connections with either Peter community, peter business communities were associations, were their local government agencies trying to get to this website and help from their mainly information and the government aid programs. So they take the advantage of the resources to put into their new business planning and quickly include a new product or services. And these are your questions also, which are government aid programs. Improvement is a study based on natural disasters. And we find that that isn't the governmental aid, the help a business to cope with a short term impact. Very much, you know, but under COVID-19, because it's such a long time and also almost everybody's impacted. So how the business aid programs have been perceived, received, and the US have significant impacts on small businesses. We find that the businesses who have a good connection with, like banks, where their tax preparer, and the accountant who have a good connection with the communities have a quieter access to knowledge and information and resources to help them to apply. This isn't an aid program, it wasn't the guide. A majority of them, almost everybody say, oh, this is a great program, they helped me this way and that way. We also find that some creative businesses that they use for money simply just keep their staff. You know, they also use this money for little bit and long-term business planning. You know, how to brand my business, because now is a great time before branding mechanisms, where I should find a niche market. How the money can help me to do digital marketing, you know, so they use the money in a more creative way. Then what are the papers, what are the blue curves and those programs require them, they think beyond that. So in this way, I think the dominant Ada programs probably can help them in a longer term because they take the advantage of this time to really look into them. 

   

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  Kevin Karami: That was really, really interesting. I almost want to say inspirational because it really highlighted how important useful creativity can be even in a space like business. You also, earlier on, mentioned the technological divide and how businesses that adopted technology before the pandemic had an easier time dealing with it versus ones that had to adapt in the moment. So that was a really, really interesting answer. And so kind of want to kind of end the COVID-19 question on this note: Is it possible that all of these impacts and these barriers that we've talked about are going to carry over even after the pandemic is over? 

   

  Dr. Wang: This is a great question. The short answer is yes. Because many of these short-term impacts are actually viewed as long-term issues. So some easily, therefore, non-time under COVID-19 is just revealed and afternoon will be a goal away with COVID, I wish, but some issues, they're going to stay there. For example, I read and timely information is extremely important. When you have access to this information. You will have a better chance of vital resources to take advantage of during this column. But access to information requires business connections with their peers, community organizations, government agencies. Connections. They couldn't have been viewed over night when the pandemic hits. I just started having this connection. No, Actually, when you like your business social capital before com, then it'll become even more difficult for you to do that. So the business, a connection to a different network before COVID has a significant impact on their ability to access information during coloring. Like unwise, we know technology efficiency becomes critical for both the business of survival and customer access. During COVID-19, many Latino owned businesses had HIV and embraced the technology before. Our earlier study in 2019, have identified the diet before correlating that fiscal challenges of access to capital, like human capital, limited English proficiency and electrical access to your continuing education and the mentorship. You would wonder how this will impact their coping strategies during COVID-19. But all of these appoggiaturas just have impacts on their technology efficiency. If you think about so many, We'll stay because of long-term challenges facing women and minority owned businesses. So overall, the experiences of Latina owned businesses in coping COVID 19 suggest a need for continuous investment in technology, continuing education, social network and beauty, and for small businesses to access money market and knowledge management with us in that way. 

   

  Kevin Karami: Thank you. And I think that, you know, perfectly highlights why this is something that really needs to be talked about more. Because all the issues that existed before are going to continue. Like you mentioned, it's going to require a lot of effort for multiple different avenues to actually help offset it and hopefully in the future, we can kind of work to potentially solve some of these problems. I'd like to take a step back a little bit and look at this topic a little bit more broadly. So I'm going to ask what kinds of issues exist for Latina businesses across the entire country and how, if at all, do they differentiate themselves from the issues that are specific to the Inland Empire and California? 

   

  Dr. Wang: Yes. First of all, the existing studies have discarded the challenges facing me and the minority of businesses. So we see common themes between our eyes, usually in other places. For example, the challenges in accessing financial capital, the limited or social networks limit in a market like might've edge knowledge, but also like the gender and racial, religious stereotyping and discrimination. So base cost for the constant efforts to come back to the challenges of ROM, our society from the terrorist attacks, okay, but I got the same time. Our region has its unique challenges and opportunities. Example, compared to the 18 to 19 percent of the US abolition, more than 50 percent in our region are Hispanic and Latino arrays. Okay, this, which is a much higher abandoned national or scientific hybrid, 65 percent less dense in the IUD. And they live in a neighborhood with a poverty of more than 20 percent. So compared to the entire California, we're in Southern California to compare it to the coastal region. Our region is economically, more, economically disadvantaged. So historical reliance on the low cost of land and the utilities in the region has undersides of curation. Low tech, low wage businesses, and the service industries, as well as warehousing and logistics industries. Okay.So operation operating out of the IU region presents additional challenges including difficulty recruiting employees, fewer regional markets, limited access to social networking events and retraining programs, as well as a likeable much worse and exhaustion rule model in underserved communities. So we've faced these challenges in our region. This is the disadvantage that our small business owners, especially Latino owned business owners, haven't told us. But office meeting these challenges is a sizable government. Employment space institutions of higher education and a growing number of increasingly educated and wealthy residents that are joined by our low cost of housing. So the reliability growth non-white population has created as to economic and an unmet market opportunities as well. In recent years, the number of regional businesses, especially those owned by people of color and women, have grown rapidly. Okay. So in fact, I usually do that, which is also the riverside metropolitan area, which ranks among the top 50 nationally for the total number of Latino owned businesses. Now who are fostering an inclusive entrepreneurship ecosystem and equitable growth is a common thing nationwide. Okay? But you might view our region has both challenges and opportunities. Opportunities to cite a model or our nation. I think that way. 

   

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  Kevin Karami: Thank you. And I think those are really great ways of breaking it down. And that's a really interesting point. I knew that I didn't know what. I don't think most people know that our region at the same time has a lot of unique challenges, but also has more opportunities that other places don't have. That's a really interesting way of looking at it. And I didn't know that. I think most people can also agree that it is also important to recognize that there are definitely unique aspects to this region that don't exist anywhere else in the country. And I think you've done an amazing job of explaining the issues in terms of discrimination too. Businesses and female businesses. So we've talked a lot about the impacts of COVID and the policy and economic barriers that exist. So I kind of want to end on a more positive note. In terms of policy, economic, or social developments. What kind of specific ones would you like to see in the coming years to solve all the issues that we've spoken about. 

   

  Dr. Wang: Thank you, Kevin. I think that there's a great question in many cases that is beyond our researcher's row, but we want to advocate for this. Absolutely.I want to say for both the short and long-term needs, we need more efforts and the best efforts come from multiple sections. Okay, so for most small businesses, it is extremely important to keep themselves informed as fast as possible. It means that they need to keep connected with peer business owners, banks, professional organizations, and local government agencies. They need to integrate new business strategies through technology called innovation. It is also important for financial planning and financial cooperation and to reinvent the new norm, we always talk about the new norm. So to achieve this goes continuous education on business and management, planning an attack Nicole, literacy and assistance, algebra. Two. Professional organizations and government agencies are essential, very important. I also want to make sure that actually UCR, we have a team who has been working with not only your CR campus, UCR faculty and students may also, we're working with locals. Communities, broken small businesses hoping to provide the technology, polyadenylation and ASAM. Very fundamental in education for small businesses. So this is a business, a small business apartment. Well government to part. It is fundamental for them to keep people in full by providing, I can erase timely and consistent information and the guidance, this is very, very important. Under COVID-19, we see so many things related to this uncertainty and sometimes even fear, confusion, you know, all because we don't have timely and accurate information. Okay. Okay. And also the government agencies that they need to reach out to batter for local pizza on the phone. Local people are facially traditionally hard to reach communities. And I didn't at the same time we find under this pandemic disruption, the services from non-profit organizations crew to be more critical. Under this disastrous event, they need to either Kate and promote themselves in local communities and budget for marketing themselves. And it consistently communicates with the local communities. Well, underserved with the community is like Latino owned businesses. These organizations need to provide services in Spanish. Reduce this trust. Fighters motive major Latino owned businesses to outreach, education and the networking and collaborating with other community-based organizations. The example of the faith-based institutions, we see a lot of this mismatch between the businesses that need the resources and services, the organizations who provided the services, but they couldn't meet the underserved communities. So there needs to be a biter alignment between these two sizes. But my point is this is going to be an effort from multiple sectors. We need to work together, okay, So our region, awesome, nice to diversify its economic base. Continue to invest in adaptation, promote higher-paid job opportunities, attract more big corporations who are willing to work with small businesses to foster a, draw, a very small business ecosystem. So this again to be, I still say that the collaboration from the multiple sectors and different much more dimensions. We have been seeing efforts in this. We have a non-profit organization who are looking into the department that issues, also tackling some issues, social issues as well. And UCR is doing more, increasingly more work with the local community is trying to help him this side. Like the National, let you know, Wayman business association in the IEEE region, which I had been working with for a long time. They also see the challenge, the opportunity, and they also make efforts trying to work with, uh, with the University of work with small businesses, local government agencies. So we've seen more and more efforts in this app aspect and we will do better.

   

  Kevin Karami: I think that's a great way to end. Obviously it's really important to do that research, discuss the impacts and challenges that businesses face, but I also think it's important to talk about how we can solve these issues. That's the ultimate goal that we have. And it's just great to hear that there is a path that we can follow to potentially get to a place where these businesses don't have to face these challenges that are very discriminatory to them. And I think you did a really great job of highlighting just how important the issue is. And you know, one of my favorite points you made was how the government needs to be really avid about providing accurate and timely information. That's something that COVID really revealed that we aren’t great at. And it's important not just for these businesses, but for the population in general. So Dr. Wang, Thank you for joining us on this episode of policy chats . This was an amazing discussion. And like I said, it's an issue that really, really needs to be highlighted more often. 

   

  Dr. Wang: Thank you Kevin, thank you very much. 

  
  Outro: This Podcast is a production of the UC Riverside School of Public Policy. Our theme music was produced by C Codaine. I'm Kevin Karami, until next time.