Labor shortage or an entrepreneurial boom?
Celebrating NAHREP familia, cultura, politics, and grassroots action
December 9, 2021
Qué onda mi gente?!
There’s been a lot of talk lately about the national labor shortages. Many have blamed the extended unemployment benefits and are quick to think that people might be “too lazy” to go back to work after receiving COVID-relief benefits. However, I challenge you to consider this:
An unprecedented amount of people, particularly young people, have started their own businesses over the past two years.
If you read our State of Hispanic Homeownership report or our State of Hispanic Wealth report, you’ll know that Latinos have been driving entrepreneurial growth over the past decade–especially Latinas. Small business ownership (or heck, BIG business ownership) is one of the main pillars of our Hispanic Wealth Project. Self-employed Latinos have a median net worth of $174,920, five times that of Latinos overall. Even further, self-employed Latinos with business equity (such as those who have business assets) have a net worth of $314,380, almost nine times the wealth of Latinos in general. It pays to own your own business!
Latinos Starting Businesses at Higher Rates During Pandemic
According to the most recent data from the Bureau of Labor Statistics, 4.4 million Americans, or about 3% of workers, voluntarily left their jobs this past September, resulting in the largest mass resignations the U.S. has seen in the last two decades.
We knew right away that the pandemic was going to change the world as we knew it, we just didn’t know how. We’re just starting to see the lasting impact of the pandemic now. Personally, I know the pandemic changed me profoundly. My priorities are different. I lost people during the pandemic. I don’t (and can’t) take my family for granted. I facetime my mom, my niece, and nephew practically every day. Seeing them as often as I can has become a bigger priority in my life today, than ever before, and that impacts my decisions.
The same thing happened with our labor force. It changed. Just like people came to value space by moving to bigger homes outside of the city center because of the pandemic, people have also come to value autonomy. People have opted for the autonomy that self-employment provides. For example, think of how many Latina-owned small businesses need flexibility to care for their children and families especially when there is also a labor shortage in the child care industry! The next time we are all frustrated by the national labor shortage, or are quick to blame the government, let’s also consider that the pandemic has actually increased the number of young Latinos dabbling into the magic of entrepreneurship, and that is a good thing.
At about 9.44 million workers, the overall number of unincorporated self-employed workers (not registered with the state) has increased by 500,000, or a 6% increase. At the same time, entrepreneurs applied to register 4.54 million new businesses from this past January through October, an increase of 56% from the same period in 2019, according to the Census.
With so many of these new businesses undoubtedly being started by young Latinos (especially Latinas), we also have to consider that most businesses fail within the first few years of opening them. Businesses that are offering services in high demand, with the right amount of ganas, innovation, and hard work will succeed. Others, not so much.
I challenge you all to consider that you are successful because someone helped you along the way, someone showed you the ropes, and someone inspired you. So, during this holiday season, we can give a special type of gift to our new crop of entrepreneurs. Here are some ways you can help:
- Mentor a young entrepreneur: Take a young entrepreneur out for coffee this month and show them what you’ve learned about businesses. What were the things you wished someone had told you when you first started? And don’t just talk, let them ask questions. Our efforts in growing wealth aren’t just about you. It’s about leaving a legacy and bringing others up with you.
- Buy gifts from a small business: We all have to buy a bunch of presents this month. Make it a point to buy at least 50% of your gifts from small businesses. If it’s from a Latino small business, you get bonus points, but if it’s from a young Latino/a small business owner, you get an A+!
- Spread the word: Promote these small businesses on your social media and share the story of the people behind those businesses. Our CEO, Gary Acosta, wrote a blog a few weeks ago called “Let Others Promote You.” Don’t just post about how great you are, post about how great other people in your community are. When we uplift each other, our community shines a little brighter. And, you might be able to give the boost that businesses just starting out so desperately need.
Happy holidays, corazones. Los quiero mucho.
About Noerena Limón
Noerena Limón is NAHREP’s Executive Vice President of Public Policy and Industry Relations. Noerena heads the organization’s policy and advocacy efforts on issues ranging from homeownership, housing inventory, credit access and immigration.
Prior to joining NAHREP, Noerena spent six years at the Consumer Financial Protection Bureau (CFPB) and served as a political appointee under President Obama in the White House Office of Political Affairs.