Coming off the heels of the grueling fiscal cliff debacle, it's beginning to be an exhausting endeavor just to follow with all these economic skirmishes in Washington. One last minute band aid-like fix comes after the other. First we witnessed the 2011 debt ceiling fight and the faulty agreement that followed all hashed out just days before the U.S. was set to fall into sovereign default.
Then we all saw Congress in session during the early hours of the new calendar year voting on legislation that, while protecting most Americans from higher tax rates, failed to address the underlying issue of national debt and deficit spending. These eleventh hour deals coming from a polarized Washington have done nothing for the economic well-being of Americans, and especially for a particular demographic: Latinos. As of November 2012, the unemployment rate among Latinos stood just above 10.0%, while the Latino poverty rate was a sobering 28%.
From January 2009 to September 2011, the median income for Latino households fell 2.3% from $38,667 to $37,759. These disheartening statistics have been worse for Latinos when compared to the general population in recent years and raise a valid question: What about the 2009 $1.2 trillion stimulus package and all the other left-wing economic policies through the years that were supposed to alleviate economic hardship among Latino communities? Any analysis of the economic state of inner-city Latino neighborhoods would provide ample evidence that expansion of social welfare programs and the government pumping money into various sectors at will, both of which are key pillars of the Democratic Party's economic platform, are not viable solutions to the financial challenges that Latinos across the United States face.
For too long, the elected officials who were supposed to serve Latino communities have taken the wrong approach. Rather than handing out money and wealth to Latinos, government at all levels should be focused on empowering Latinos to be able to act as rational actors carving their own economic path in this world. The key to this objective would be to encourage one thing: entrepreneurial behavior. Just like small business is the driving force that could bring about a robust economic recovery on a national level, a similar approach could bring similarly positive results to Latino communities all across America. Examining differing examples supplement this assertion. In California, the fastest growing group of residents opening small businesses is by far, Hispanic women.
However, there has yet to be any sign of economic improvement among California Latinos, undoubtedly due to the atrocious business climate in the Golden State. The incredibly burdensome tax system, an overwhelming regulatory code, and outdated labor union laws effectively inhibit entrepreneurship and innovation from taking root in California, therefore preventing Latinos in the state from being able to escape the dangerous cycle of being dependent on government handouts.
In contrast, Puerto Rico under Republican Governor Luis Fortuño and a center-right legislature passed a bevy of reforms to champion small business and innovation. After cutting taxes considerably both for individuals and businesses, deeply reducing the deficit by curtailing public spending and revoking excessive regulations, small businesses were given the opportunity to thrive.
The results were nothing less of extraordinary. Puerto Rico's unemployment rate was significantly reduced, Puerto Rican bonds reached a point at which they were outperforming bonds from every state in the Union, and the World Economic Forum determined that Puerto Rico's economy made a meteoric rise to become the second-most competitive economy out of all the Ibero-American countries, surpassed only by Chile, a country notorious for its preference for free markets.
Aside from achieving economic freedom solely through government action, entire communities can benefit if entrepreneurial behavior is encouraged and widespread enough. The Cuban community in South Florida quite possibly has the strongest culture of entrepreneurship among all Latino groups in the country, and subsequently, Cuban Americans have the highest median income out of all Hispanic groups, standing at $36,671 per household.
Furthermore, U.S.-born Cuban Americans have an average median income of roughly $50,000 a figure that surpasses even that of non-Hispanic whites. Encouraging entrepreneurship and championing small business are essential to ensuring that Latinos are empowered en masse to improve their economic standing. Only after tapping into brain-power and innovative potential of many Hispanics can we expect to see significant economic progress among Latino Americans.
© El Republicanos 2013
Randall Ramos is currently a sophomore attending California State University, Northridge, pursuing a Bachelor’s degree in Political Science as well as a teaching certificate in ESL. Mr. Ramos interned at the Republican Party of Los Angeles County and worked on Todd Zink’s campaign for California State Senate. Other activities include serving as acting President of the newly formed CSUN chapter of the Puerto Rico Statehood Students Association.
