The Impact of COVID-19 on Hispanic Entrepreneurs in Houston
The COVID-19 pandemic is the greatest challenge faced by the United States since World War II. The virus and the government shutdown and stay at home mandates have had a powerful negative impact on the U.S economy. Houston's economy, often immune to national economic downturns, has not been spared by the devastating effects of the COVID-19 pandemic and government efforts to mitigate its impact. With this in mind, the Hobby School of Public Affairs is undertaking a series of surveys targeting vital local businesses in the wake of the pandemic.
In this report, our sixth in the series of studies on the Economic Impact of COVID-19, the Hobby School of Public Affairs partnered with the Houston Hispanic Chamber of Commerce (HHCC) to assess how Hispanic entrepreneurs have fared during the pandemic. The Houston Hispanic Chamber of Commerce represents professionals, entrepreneurs, and executives of small businesses and large firms operating in the Houston area. A sample of members of the association were were surveyed between June 16 and July 24, 2020 via an online survey sent to their e-mail address on file with HHCC.
Hispanics are the largest ethnic group in the Houston area, and account for roughly 25% of total spending in the region. Moreover, Hispanics entrepreneurs are the backbone of the regional economy: 38% of small business owners in Houston are Hispanic. The experience and needs of Hispanic business owners and professionals is of utmost importance for understanding the evolution and recovery of the Houston economy.
Our survey reveals that more than half of Hispanic business experienced sales losses since the pandemic took hold last spring. Over one-third of respondents reported that their businesses had furloughed or laid off more than 80% of their workforce. Many have reduced their payments to landlords, financial institutions and for other services, sending a ripple effect across the economy.
- 60% of respondents expect 2020 sales to be lower than in 2019; over half of those reporting that their 2020 sales would drop expect them to be 60% or less of their 2019 levels.
- 17% responded that their companies had furloughed employees, and 30% disclosed layoffs.
- 36% of those reporting furloughs and 42% of those who laid off employees, responded that those decisions affected over 80 percent of their firm's workforce.
- 14% said they closed their main office or another branch of their business.
- 11% reported they are no longer making rent payments for their businesses; an additional 14% said they are making partial rent payments. 13% are no longer paying for payroll services, and 15% are not servicing their loans.
- To alleviate the economic impact of COVID-19 on their businesses 25% enacted temporary salary reductions, 35% reduced work schedules, 50% consolidated programs to reduce costs, and 69% moved their businesses online or expanded their online presence.
- Over fifty percent of respondents are concerned about delays and cancellations of projects.
- More than half of respondents said they have or expect to apply for the federal government's Paycheck Protection Program relief plan.
Kirk Watson, Dean, Hobby School of Public Affairs
Pablo Pinto, Director, Director, Center for Public Policy; Associate Professor, Hobby School of Public Affairs
Sunny Wong, Professor, Hobby School of Public Affairs
Gail Buttorff, Co-Director, Survey Research Institute; Assistant Instructional Professor, Hobby School of Public Affairs
Francisco Cantu, Co-Director, Survey Research Institute; Associate Professor, Department of Political Science, University of Houston
Renée Cross, Senior Director & Researcher, Hobby School of Public Affairs
Mark P. Jones, Senior Research Fellow, Hobby School of Public Affairs; James A. Baker III Institute for Public Policy's Fellow in Political Science, Rice University
Jim Granato, Associate Dean & Professor, Hobby School of Public Affairs
Yewande Olapade, Post-Doctoral Fellow, Hobby School of Public Affairs
Savannah Sipole, Research Associate, Hobby School of Public Affairs
Agustín Vallejo, Post-Doctoral Fellow, Hobby School of Public Affairs
Houston Hispanic Chamber of Commerce