News Column

Stimulus Package Helps

May 23, 2011

Broos Campbell, Staff Writer

The second birthday of the economic stimulus package came and went in February. No cake. No candles. No chorus of "Las Maņanitas." Whether the $787 billion American Recovery and Reinvestment Act of 2009 and its extensions helped Hispanics and Hispanic enterprises depends on who's talking and what yardstick they use to measure recovery.

According to Elizabeth Echols, the Small Business Administration's regional administrator for California, Nevada, Arizona, Hawaii and the Pacific territories, the stimulus package "helped to prevent a second Great Depression. Hispanic-owned small businesses helped create and save jobs in communities all across America." The act helped the SBA provide 4,223 loans to Hispanic-owned firms, amounting to $1.5 billion, according to Ms. Echols.

Unemployment peaked last year and has been drifting downward for several months, but at different rates for different demographics. The Department of Labor reported in April that the unemployment rate for Hispanics was 11.3 percent, down from a high of 13.2 percent in November 2010. That's compared to the peak rates of 9.4 percent in October 2009 for whites and 16.5 percent in March-April 2010 for blacks.

"Latinos are part of the recovery, they're driving the recovery, they're critical to recovery, but their grasp on economic and job security is tenuous," Catherine Singley, policy analyst at the National Council of La Raza (NCLR), told HispanicBusiness magazine.

For one thing, lower-income Hispanics are "heavily represented in temporary help," she said. Temporary workers "have no mobility and no hope of progressing upward. For many Hispanic workers, a temp job is not a temporary situation. It's a permanent workforce status."

Jobs and Infrastructure
The difficulty in measuring the results of the economic stimulus, as The Wall Street Journal pointed out in February, is that there's nothing to compare it to. There's no alternative universe handy in which the stimulus package wasn't passed.

"But," the paper reports, "programs to support low-income households were highly stimulative, as was spending on infrastructure projects."

Among other things, the Recovery Act scraped together $288 billion in tax incentives for individuals and businesses; $155 billion in health-care subsidies, including a temporary, 65 percent subsidy for COBRA coverage for displaced workers; $111 billion toward transportation, energy and information infrastructure; and $82 billion for retraining and unemployment benefits.

In March, Rep. Nydia M. Velazquez, D-N.Y., who co-sponsored the House version of the stimulus bill in 2009, spoke with reporters via conference call. "The American economy is increasingly centered on U.S. cities," she said, "particularly in the Latino community, where we have a lot of concentration in the construction workforce."

A quarter of the nation's construction workforce is Hispanic. The construction industry is improving across the country, though slowly. The sector added 33,000 jobs in February, following a decline in January, according to the Bureau of Labor Statistics.

Left , Right and Between
East of Los Angeles, the 43rd Congressional District stretches from Ontario to San Bernardino in the hard-hit Inland Empire, where the unemployment rate hovered at 14.2 percent -- the grimmest in the nation -- in January 2011. The region was riding high on new housing construction when the bottom fell out in 2008.

Democrat Rep. Joe Baca, who represents the district, endorses the stimulus package. "From a larger perspective, there is no question the Recovery Act has helped pull our economy back from the brink," he said in a prepared statement. "The bill also has had a positive impact on the over 2.3 million Hispanic-owned small businesses, spurring more than $21 billion in small-business investments nationwide."

Rep. Mario Diaz-Balart, R-Fla., disagrees. He calls the stimulus package "a total disaster" when he slips out of a meeting to talk with HispanicBusiness magazine by cell phone. "Unemployment is still above what they said it would never reach if we passed this magic potion," he said. "If spending government money was the solution, we'd be at 2 percent unemployment."

Of the "dozens upon dozens" of Hispanic and small-business people he's spoken to in his district, he says, "not one of them has benefited from the stimulus."

Alex Romero, president of the Albuquerque Hispano Chamber of Commerce, said he's seen only minimal effect in New Mexico. "Road construction projects that probably would not have been started," he told HispanicBusiness magazine. "Lots of construction jobs and that sort of thing. Probably some help for teachers who may have otherwise had to have been cut." But nothing highly visible, he said.

Entrepreneurial Spirit
"(It's important) to recognize the entrepreneurial spirit of the Latinos in this country," Rep. Velazquez said. Despite tightened credit standards, she said, "$11.8 billion in capital became available to 22,000 urban small fi rms. So we know the Hispanic community was able to benefit." But how do we know "the Hispanic community was able to benefit" is the question.

Ron Sims, deputy secretary of the Department of Housing and Urban Development, participated in the March conference call with Rep. Velazquez. The Recovery Act jump-started construction of 25,000 affordable housing units and 15,000 miles of urban highway improvements, he said, making the recession "more shallow than if we had not had this Recovery Act investment."

The key to recovery for many would be working people is jobs training, particularly in new industries. As then-presidential candidate Barack Obama said three years ago, "(green jobs) pay well and can't be outsourced."

"Some of the good news coming out of the stimulus," the NCLR's Ms. Singley said, "is that Hispanic workers who undertook training for green jobs have exited the programs "with certifications that are appealing to employers."

The stimulus package was a "monumental act both for the recovery of our cities as well as the recovery of an economy that was in a great deal of pain and sinking rapidly," said Mr. Sims. "We are reducing unemployment. The economy is beginning to grow again." But there are countless Americans who disagree.

Source: (c) 2011. All rights reserved.

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