A characteristic among Latinos in the U.S. has been their propensity to open businesses faster than all other demographics in the country, with a recent report by The Wall Street Journal showing that Latin American immigrants are starting businesses at more than twice the rate of the U.S. population as a whole.
The jump in Latino entrepreneurship levels has driven up the overall share of new businesses owned by immigrants, who accounted for 36% of launches last year compared with 25% in 2019, the report showed. By comparison, new business creation by white and native-born Americans has slowed in the past two years, following a broad surge early in the pandemic.
But despite this increased pace, Latino owners still represent 7% of the entire spectrum, according to the Pew Research Center.
Food in particular has been an attractive choice for many immigrant entrepreneurs as it requires minimal capital investment or proficiency in English and offers flexible hours. Fellow immigrants are also often eager for foods that remind them of home, the Journal noted.
In some cases, entrepreneurship is an outstanding option for immigrants, particularly undocumented ones, since it doesn't require work authorization or a Social Security number. For others, it's a matter of necessity, as limited proficiency in English and lack of American credentials can make it increasingly difficult to find a job.
The survey, which draws figures from the 2021 Census Bureau's Annual Business Survey, showed that most of these had majority-White ownership (85%).
Asian-Americans, who represent a lower proportion of all residents, had 11% of all small businesses, while Blacks were also underrepresented in this category, comprising only 3% of the category.
Overall there are roughly 6 million small businesses in the country, with almost half (49%) having between one and four workers. "About a quarter (27%) have between five and 19 employees; 8% have 20 to 99; and just 1% have 100 to 499 workers," said the Pew Research Center, which added that "the remaining 14% had paid employees at some point during the year, but not during the March 12 pay period, which the ABS uses to determine employment size."
As for longevity, almost six in ten (59%) had been operational for at least six year, with 15% being so for more than 25 years. "On the other end of the spectrum, about a third of small businesses (35%) had been running for five years or fewer in 2021, including 9% that had launched in the last year," Pew added, saying that it couldn't determine the age of some 6% of firms.
The survey also focused on how the amount of businesses opened increased substantially during the pandemic, and showed that places with larger populations were at the epicenter of this.
"Florida (225,809) topped the list, followed by California (221,571), Texas (151,888), New York (131,206) and Georgia (80,403)," said Pew, adding that "Missouri, Wyoming, Delaware, Florida and Colorado had the most applications per capita that year."
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