The research upon which this paper is based was supported by two Burruss Local History Grants (Historical Research Grants in Shenandoah Valley History), A Program of the Special Collections Unit, Carrier Library, James Madison University. Copyright is owned by JMU. Researchers wishing to quote from or publish part or all of this paper must complete and submit the “Application to Quote or Publish,” available on the Spec. Coll. website (/special/).
From Workers to Owners:
Hispanic Entrepreneurs in the Shenandoah Valley
Laura H. Zarrugh, Ph.D.
Department of Sociology and Anthropology
James Madison University
During the 1990s the rural South, traditionally an area that has attracted little in-migration, became a new destination for Hispanic immigrants drawn by jobs in agro- industries. By 2002, 36% of all Hispanic workers in the United States were concentrated in the South (Kochhar 2003:27).1 As a result of this dramatic influx of immigrants, many small towns and cities, are experiencing social changes usually associated with much larger metropolitan areas. Although the Commonwealth of Virginia has not experienced growth as large or as rapid as states further south, such as Georgia and North Carolina, it now has the sixteenth largest Hispanic population in the country. Within Virginia, one of the areas that has experienced the greatest growth in the last decade is the Central Shenandoah Valley and particularly the city of Harrisonburg (population 40,468 in 2000).2 According to U.S. Census figures, Harrisonburg’s Hispanic population, which represented about two percent of the total population in 1990 grew to almost nine percent in 2000, although many local residents feel that the Hispanic population is much larger than is reflected in the Census figures. During the same period, the Latino population in Rockingham County, of which Harrisonburg is the county seat, increased 309 percent, while the total county population (67,725 in 2000) increased only 17.8 percent (Wright 2004:4). The growth of the immigrant population has been accompanied by a rapid rise in the number of Hispanic-owned businesses, which increased in the past decade from one to over 40.3 Given that Hispanic immigrants, except Cubans, have generally been perceived as having low rates of entrepreneurship, and that population and economic censuses support this perception,4 Harrisonburg presents an interesting case study, raising questions about how structural conditions and other factors in these new locations may affect entrepreneurship. Specifically, this paper seeks to answer some basic questions about Hispanic entrepreneurship in a rural setting. For example, why have Hispanics come to the Central Shenandoah Valley, a rural agricultural area that has historically had a very low immigration rate? Who are the Hispanic entrepreneurs and why have they come to the area? What are their reasons for starting businesses in the local area rather than in a larger urban area with a greater concentration of co-ethnics? What forms of human and social capital do entrepreneurs bring with them? How do they learn how to start and operate a business in a setting that lacks the concentration of ethnic and social resources found in larger cities? The paper will examine some major factors associated with Hispanic entrepreneurship in a rural setting.
Theoretical Background: Research on Hispanic Entrepreneurship
While some states, such as North Carolina and Georgia have experienced over a hundred percent (110 percent and 102 percent respectively) increases in their Latino populations in less than a decade, all southern states have witnessed a rapidly-growing Hispanic presence. Research is just beginning to record and analyze the implications of these massive demographic changes for the people and communities involved (e.g. Atiles and Bohon 2002, Fink and Dunn 2003, Gozdziak and Bump 2004, Hernandez-Leon and Zuniga 2000, Kandel and Cromartie 2004, Kandel and Parrado 2004, Mohl 2002, Murphy, Blanchard and Hill 2001). As in the rural Midwest, another area that has seen a significant increase in Hispanic population in the last decade, immigrants have been drawn to the rural South primarily by the availability of jobs requiring few skills and little knowledge of English. In the Midwest a major source of jobs is meatpacking; in the South, it is poultry processing. Whatever their destination, immigrants’ consignment to economic niches consisting of low-paying, low-skill jobs has been well-documented and has led academics to regard Hispanic and particularly Mexican immigrants as labor migrants with little propensity for entrepreneurship. As a result, little attention has been paid to the entrepreneurial activities that are associated with these populations, despite the fact that dozens of newspaper accounts of new immigrant destinations consistently highlight the proliferation of Hispanic-owned small businesses as one of the most visible signs of the new immigrants’ presence in a community. What is even more surprising is that there has been so little interest in understanding the low rates of entrepreneurship among Hispanic immigrants given that these rates differ so dramatically from rates in immigrants’ home countries. For example, Mexico, which is the largest source of Hispanic migration to the U.S., is also, according to Fairlie and Woodruff,
“one of the most entrepreneurial countries in the world. Self-employment or entrepreneurship rate estimates from the OECD (2000) rank Mexico at the top of its list of 28 member countries, the Global Entrepreneurship Monitor (2003) rank Mexico 4th in its listing of 41 countries and the ILO rank Mexico in the 70th percentile of its list of 74 countries. Estimates from these sources and from the Mexico Census indicate that roughly one fourth of Mexico’s workforce is a self-employed business owner. (Fairlie and Woodruff 2004:1)
In comparison, in the United States, Mexican immigrants’ rate of entrepreneurship is six percent compared to the national average of 11 percent. This is particularly interesting since the rate of entrepreneurship among all immigrant groups has tended to be higher than that of the native-born for most of the last century. One answer to low entrepreneurship among Mexican immigrants may be that, at least in the past, Mexicans were more likely to return home than immigrants from other countries and therefore were also more likely to start a business in Mexico upon their return, using earnings from their sojourn, rather than remaining in the United States to engage in entrepreneurial activities.
Return migrants’ small business development has been documented by Lapati and Martinez Castellanos (1991) for Mexico, as well as by Lopez and Seligson (1991) for El Salvador and by Portes and Guarnizo (1991) for the Dominican Republic.
Although research on immigrant and ethnic entrepreneurship has grown substantially over the last 30 years, it has tended to focus on groups that have been identified as having high rates of entrepreneurship, such as Koreans, Chinese and Cubans. At the same time, a few theoretical models— the ethnic enclave economy (Wilson and Portes 1980, Portes and Bach 1985) and middleman minorities ( Bonacich 1973)—which were formulated to explain conditions perhaps unique to the specific groups to which they have been applied (Cubans and Koreans respectively), until recently have dominated discussions of causality. Over the past decade as more research has accumulated on different groups within varying contexts, the “classic” explanations and approaches have been critically challenged (e.g. Cobas 1988, Mavratsas 1997). With increasing attention focused on Hispanic entrepreneurship since 1990(e.g. Alvarez 1990, Chapa and Cardenas 1991, Chinchilla and Hamilton 1989, Garcia 1995, Guarnizo1997, Levitt 1995, Pessar 1995, Raijman 2001, Raijman and Tienda 1999, Spener and Bean 1999, Torres 1988,Valdez 1989, Valenzuela 2001, Villar 1994, and Zlolinski 1994,) there appears to be a growing consensus that “middleman theory” and the “ethnic enclave economy” model do not apply to most Hispanic groups, with the exception of Cubans who have established an “enclave economy” in Miami (Portes and Bach 1985). Even Alvarez (1990), who attempts to apply the “enclave economy” model to “chileros” (chili wholesalers) in Los Angeles, admits that it is an imperfect fit since it applies to only one small occupational niche. Other authors (Chinchilla and Hamilton 1989 and Light and Gold 2000) emphasize the importance of maintaining clear distinctions among related, but distinct concepts, such as ethnic enclaves, ethnic neighborhoods, ethnic occupational niches and ethnic economies. Portes, for example, makes a clear distinction between ethnic enclaves and ethnic niches. As exemplified by Chinatown in New York, Koreatown in Los Angeles and “Little Havana” in Miami, ethnic enclaves have a “distinct physical presence in urban space” as well as “dense concentrations of immigrant or ethnic firms that employ a significant proportion of their co-ethnic labor force.” (Portes 1988:13) In contrast, ethnic niches involve the colonization of “a particular sector of employment in such a way that members have privileged access to new job openings, while restricting that of outsiders.” (Portes1998:13). This distinction is especially important in considering new immigrant destinations that are associated with particular industries, such as food-processing. While ethnic niches can be created wherever jobs become a monopoly of a particular group, ethnic enclaves, which are a function of population density, appear to be more strictly associated with large metropolitan centers.
Moving beyond the ethnic enclave and middleman minority models, most recent scholarship has shifted away from attempting to postulate one theory to account for all instances of immigrant entrepreneurship toward a focus on factors that foster or impede immigrant or ethnic entrepreneurship. These factors have been variously identified as “supply side” vs. “demand side” or structural opportunities vs. social and cultural resources. Among supply side variables are cultural attributes or resources of immigrant and ethnic groups (e.g. predispositions toward business, social networks and social solidarity) and further refinements that distinguish ethnic resources and class resources (Light 1984) or social capital and human capital. In the case of Hispanic immigrants, low entrepreneurship is often attributed to a lack of human capital, and particularly low educational levels. Comparing businesses owned by Hispanics (primarily Mexicans), Koreans, Arabs and South Asians in “La Villita,” a predominately Mexican neighborhood, in Chicago, Raijman and Tienda (1999) found that owners from each group differed in human capital (education, knowledge of English and prior business experience) and their motives for becoming self-employed. In particular, Mexicans tended to have less education (average nine years) than the other groups (which averaged at least two years of college) and less fluency in English, but Mexicans were more willing to take risks with their assets to start a business. Compared to Koreans who almost universally gained prior experience working in a co-ethnic’s business, Hispanics were also more likely to have gained experience in the informal economy (e.g. working from home or a flea market) and were motivated less by the opportunity to earn more money than by the chance to work for themselves and to be able pass on the business to their children.
Less scholarly attention has been given to the structural characteristics of Hispanic, and particularly Mexican immigration, that act as impediments to entrepreneurship in the U.S. Perhaps the most obvious impediments are historical patterns of sojourning or cyclical migration and undocumented legal status which work against establishing and operating a business in the formal economy, as does the common practice of sending remittances home which makes the accumulation of start-up capital more difficult.
Some of the recent research on Latino entrepreneurs has called into question earlier assumptions about the role of social and cultural resources in entrepreneurship. For example, several authors (Chinchilla and Hamilton 1989, Guarnizo1997, Pessar 1995 and Villar 1994) point to a lack of solidarity among co-ethnic business owners. Related to the issue of “bounded solidarity” is the problematic use of categories such as “Hispanic” or “Central American” in the literature that obscures the diversity of peoples, subsumed under such general terms. Several authors note the lack of homogeneity within these groupings with respect to nationality (Chinchilla and Hamilton 1989, Pessar 1995), class and education (Guarnizo 1997 and Villar 1994) and legal status (Villar 1994). Guarnizo also suggests that “internal ethnicity” or regional differences in immigrants’ home countries influences solidarity. Mexicans, in particular, are noted for their allegiance to the “la patria chica” (local areas). Guarnizo found that, due to the effect of migration networks, 70 percent of the Mexican entrepreneurs he surveyed in Los Angeles were from just three states (Jalisco, Michoacan and Zacatecas) and Mexico City and that many smaller immigrant-owned establishments were oriented toward serving “paisanos” (individuals from the same community or state in Mexico). He also noted a similar regionalism among Dominican business owners in New York. Pessar suggests that researchers often take social solidarity among co-ethnics for granted, rather than substantiating its existence. Her research demonstrates that “affinity among ethnic firms does not emerge simply because such firms exist” (Pessar 1995:389) and she concludes that social, cultural, historical and situational factors (e.g. an expanding local economy) may either facilitate or impede the development of social solidarity within immigrant groups.
While a great deal of research has focused on supply side variables, much less attention has been given to the demand side of entrepreneurship or the context within which it develops. Demand side variables, also referred to as “opportunity structures,” include environmental or structural factors, such as ethnic and immigrant “protected” markets, employment opportunities, government policies, and discrimination. Among others, Kloosterman and Rath (2001) suggest that the study of opportunity structures has been relatively neglected. Following Waldinger, Aldrich and Ward’s (1990) suggestion for an interactive approach that considers both the supply and demand sides of entrepreneurship, Kloosterman and Rath propose that researchers examine more carefully the less-studied demand side of entrepreneurship and distinguish immigrant entrepreneurs’ concrete embeddedness in social networks and more abstract embeddedness in socioeconomic and political institutional environments, an approach they refer to as “mixed embeddedness.” Applying this approach to her study of Puerto Rican and Dominican small businesses in Boston, Levitt (1995) argues that the groups’ low rates of entrepreneurship are due to a combination of an unfavorable opportunity structure and group characteristics, principally a lack of skills and resources.
Kloosterman and Rath also make the point that opportunity structures differ over time and by place, although their emphasis is on differences encountered by country, region or city rather than rural-urban differences. Bohon and Baker (2004), using census materials, compared rates of Hispanic immigrant entrepreneurship in four metropolitan areas and, although they focused on predictors of self-employment rather than specifically on differing contexts, they concluded that their findings support Waldinger, Aldrich and Ward’s suggestion that ethnic entrepreneurship involves the interaction of ethnic resources and opportunity structures. One significant aspect of opportunity structure is immigrant residential concentration, which is usually associated with urban areas. Evans (1989), for example, demonstrates that the probability of immigrant entrepreneurship is related to the size of the immigrant population, since group size determines the potential ethnic market, as does lack of fluency in the language of the host country. Given that virtually all of the current research on immigrant entrepreneurship, including that on Latinos, has been conducted in large metropolitan areas (e.g. Los Angeles, New York, Miami, Boston, San Jose, Chicago) with sizeable immigrant populations, it would be easy to assume that immigrant entrepreneurship is essentially an urban phenomenon. However, immigrant history suggests otherwise.
Historic studies (e.g. Morawska 1996 on Jewish entrepreneurs in Johnstown, Pennsylvania and Loewen 1988 on Chinese grocery store owners in Mississippi), have demonstrated that immigrant settlement and entrepreneurship extend beyond large metropolitan centers. For example, from the nineteenth century until after WW II, many towns and small cities across the South had one or more Jewish merchants who often specialized in dry goods and apparel (see Suberman 2001). Yet there is virtually no current literature that considers immigrant entrepreneurs in smaller cities and towns in rural areas. One exception is the work of Rochin and associates (1998) on Chicano/a entrepreneurs in rural California. Using data from the Census of Population and Economic Businesses 1970-1990, they looked at how changing structural conditions and demographics affect entrepreneurial activity among Chicano/as and Whites in communities with populations under 20,000, mostly in California’s Central Valley. They found that self-employment rates correlated closely with structural conditions within “colonias,” which are rural communities that have majority Chicano or Mexican populations and leadership. Specifically, they found that the higher proportion of Chicanos in a community, the higher their rate of self-employment. However, they emphasize that this is not necessarily a positive development since communities with a higher proportion of Chicanos also tend to offer fewer economic opportunities due to higher unemployment, more agricultural employment, lower education levels and poorer customers. Thus, in rural “colonias,” self-employment (involving primarily agricultural services) constitutes a survival strategy rather than an avenue of mobility. The authors also report on the findings of an earlier report that analyzed 1982 Census data on local businesses in 12 communities, which showed that the communities averaged 1.3 Chicano/a owned businesses, almost all of which were in retail trade. Regarding the 1998 study, they concluded that “the findings are insufficient for conclusive proof that the structuralist model best explains the situation of Chicano entrepreneurs.” They recommend “more research at the local level, questioning different groups of self-employed, to understand the motivations and needs of Chicano entrepreneurs”(Rochin et al 1998:17). One of the limitations of their methodology, which Rochin et al freely admit, is the lack of information about self-employment within the informal or underground economy since this is often underreported in Census data.
Self-employment in the informal economy is emerging as an important feature of Hispanic entrepreneurial proclivities and also one that, because it has tended to be ignored in past research, has made rates of Hispanic entrepreneurship appear to be lower than they actually are when engagement in the informal economy is taken into consideration (Tienda and Raijman 2000). Several recent studies have focused on different aspects of Hispanic immigrant self-employment in the informal sector. Mahler (1995), for example, devotes several chapters of her book, American Dreaming, to an examination of how Salvadoran immigrants in Long Island, New York “make money off the margins.” Similarly, Adler (2002) reports on how Yucatecan “ethnic entrepreneurs” in Dallas use ethnic symbols to sell goods and services to newly arrived compatriots, as well as gaining power and prestige in the process. She uses the term “ ethnic entrepreneur” primarily in a political sense to refer to patronage and brokering relationships, although the relationships also appear to involve an economic dimension. Valenzuela (2001) also challenges and modifies what he calls current “elitist” definitions of entrepreneurship to include Hispanic day laborers in Los Angeles who he calls “survivalist entrepreneurs.” Similarly, Zlolniski (1994) examines the relationship between economic restructuring of the janitorial industry (and other industries) in the Santa Clara Valley (“Silicon Valley”) and the development of formal and informal subcontracting arrangements involving Mexican immigrants. He argues that restructuring of the janitorial industry has led to lowered wages and spurred the growth of auxiliary self-employment, mostly as street or home vendors (but in one case, even dentistry) in the informal economy as a way to supplement incomes. He concludes that the growth of the informal economy is both a cause of poverty and a means for coping with it. In a study of informal self-employment among Mexican immigrants in Chicago, Raijman (2001) distinguishes self-employment as a main activity and as an auxiliary activity used to supplement insufficient earnings from wage employment. She says that individuals often turn to full-time self-employment in the informal economy when they lose their job. While both Zlolniski and Raijman suggest that informal activities can be analyzed from both the demand side as a response to economic restructuring and from the supply side as a survival mechanism, others show additional linkages between the informal and formal economies. For example, Valdez (1984) describes how informal (and illicit) activities serve as an adaptive mechanism used by some Chicano entrepreneurs, who are marginalized in the used car business, in order to keep their formal businesses afloat. Raijman and Tienda (2000) also examine informal activities as an entry point for Hispanic entrepreneurs into the formal economy. This research, as well as research on the informal economy in Latin America (see Portes et al 1989), suggests that understanding Hispanic entrepreneurship in the U.S. would benefit from examining the informal economy and its linkages to the formal economy.
This paper, which focuses on Latino immigrant entrepreneurs in a non-traditional destination, was part of a broader project that was intended to document the changing character of local small business ownership and involved identifying and interviewing immigrants of many different nationalities who own businesses in Harrisonburg and Rockingham County. The research, which was conducted from January 2003 to September 2004, was supported by a Burruss local history grant from James Madison University. The first year of the project was devoted to identifying and compiling a list of all immigrant-owned businesses in Harrisonburg and Rockingham County. This presented a challenge since the sources of such information usually available to researchers in larger urban centers were unavailable locally. In Harrisonburg, there were no ethnic business organizations or directories available at the time of the research and the city registrar’s office, which issues business licenses, was unable to supply information on local businesses because such information is not part of the public record. (The county does not require a license to operate a business.) Ultimately, city and business directories were used to help identify immigrant-owned businesses through owners’ names. Although this is not an infallible method for identifying immigrants, it provided a good tentative list that could be refined through personal knowledge of and contacts within the community. For Hispanic-owned businesses, advertisements in the local Spanish-language newspaper provided additional leads. Through these methods, approximately 170 immigrant-owned businesses were identified. For logistical reasons, no attempt was made to uncover businesses operating within the informal economy. The 170 businesses reflect the growing diversity of the community in general, with over two- dozen nationalities represented among the owners. Similarly, the Hispanic business owners discussed in this paper represent eight different nationalities.
During the second phase of the research, approximately 70 immigrant business owners from 26 different countries were interviewed about their employment and migration histories and details of their business operation. This paper focuses on interviews conducted with 41 Hispanic business owners, 23 men and 18 women. They represent most of the 48 Latino-owned businesses that were in operation in 2004. In general, owners were quite willing to talk about their businesses and only one person declined to participate. Interviews typically lasted 1-2 hours, and at least one interview was conducted with each owner or in three cases, a close relative who helps operate the business. All but four of the interviews were conducted in Spanish, most in the owner’s place of business and during regular business hours. In addition, the paper draws upon 10 years of participant observation in the community, as well as numerous interviews and informal conversations with other members of the community, including individuals who have previously owned businesses and those hoping to start businesses. In order to protect people’s privacy, pseudonyms are used for individuals referred to or quoted in the paper.
Two other notes on terminology are also in order. Following common usage in the literature, the term “entrepreneur” is used here to refer to business-owners without reference to those individuals who display special innovative behaviors. Likewise, the term “Hispanic,” is used interchangeably with the term “Latino.” Although local people use both terms, there appears to be some preference for the term “Hispano” or Hispanic, perhaps reflecting a wider regional (East Coast versus West Coast) preference. It is also important to recognize that the term “Hispanic, which has gained widespread usage after being adopted by the U.S. Census, obscures many important differences among the groups of people it lumps together. As Torres, who uses the terms “Hispanic” and “Latino” synonymously, explains,
“Technically, Latinos represent people from various racial backgrounds that trace their ancestry to Spain or Latin America. While Hispanics share a cultural heritage from a Spanish-speaking country, differences in nationality, politics, religion, level of education, skills and language use exist among the Hispanic subgroups such as Mexican American, Mexican, Salvadoran, Nicaraguan, Cuban, Dominican and Puerto Rican. These intraethnic group differences are further exacerbated by their respective group experiences in the United States and make the collapse of different groups into one Hispanic community for policy development purposes unacceptable. Still, the monolithic Hispanic identity marker continues to plague Hispanics and most, if not all, of the differences remain invisible or irrelevant to non-Latinos.” (Torres 2000:1)
The Setting and Structure of Opportunity
Located “in the heart of the Shenandoah Valley,” the city of Harrisonburg, which was founded in 1737, has long been the county seat and hub of commercial activities for the surrounding agricultural area, extending as far as West Virginia. For much of its history, the Central Shenandoah Valley, bounded by mountains that impeded travel, attracted few in-migrants. Unlike much of the lower South, the economy of the Valley was never dependent on plantation agriculture, but rather on small farms that produced so bountifully that the area became known as “the breadbasket of the Confederacy,” during the Civil War. Rockingham County today remains the leading agricultural county in the state of Virginia. With strong German and Mennonite roots and relatively few African Americans, the population mix of the Central Shenandoah Valley was also different from the eastern part of the state and the rest of the South. But like the rest of the South, during the period from the1880s to the 1920s, when southern and eastern European immigrants filled the large urban centers of the Northeast, the foreign-born constituted less than one percent of the local population and that number dropped to less than one half percent shortly after World War II (Directory Company 1946-7:25). In 1960, a local publication described Harrisonburg’s population as “99.1 percent native-born and 93.7 percent white” (Hill Directory Company 1960:25). By 1990, the foreign-born population had grown to 2.4 percent (U.S. Census 1990), but it has been only within the last 14 years that immigrants have attained significant numbers in the local area, constituting 9.2 percent of the city’s population in 2000 (U.S. Census 2000). Over 70 percent of the foreign-born in the local area have come to the United States since 1990 (Memorandum to CPAC 3-10-03:12) and among them, Hispanics represent the largest and most rapidly growing group. A survey conducted among local Hispanic residents in 2001 revealed that 44 percent had lived in the United States for five years or less and 64 percent had lived in Harrisonburg for the same period (Healthy Community Council 2001). 5 According to the 2000 Census, Hispanics, most of whom are immigrants, officially constitute 8.8 percent of the city’s population, up from 1.6 percent in 1990, although local estimates suggest that the real figures may be double or triple the official numbers. In the county, Hispanics represented 3.3 percent of the population in 2000. In both the city and county, Latinos outnumber African Americans (who make up 5.9 percent of the city and 1.4 percent of the county population). Despite the fact that immigrants did not become a prominent feature of the local population until recently, the foreign-born have formed a significant part of the city’s small merchant class for many years. Since at least early in the last century, local business owners have included Austrian Jewish dry goods merchants (since 1868), Greek restauranteurs and at least one Lebanese green grocer and a Chinese laundryman. Until the early 1960s, the small African American community also supported a number of black-owned businesses, but they were swept away along with much of the established African American neighborhood in an ill-conceived urban renewal project (McKinney 2000). Currently, only 3.8 percent of Harrisonburg’s population is self-employed (U.S. Census 2000), although small businesses remain part of an idealized image of a rapidly fading small town past.
Recent immigrants have come to Harrisonburg from over 50 countries. Of these groups, the largest are Spanish-speakers, referred to collectively as Hispanics, but mainly from Mexico (63 percent), and secondarily from El Salvador (10 percent), Honduras (eight percent) and at least nine additional countries in Latin America, who have been attracted to the local area by the relative abundance of jobs. Other immigrants have come, particularly from the former Soviet Union (especially from Ukraine and Belarus), northern Iraq (Kurds) and Cuba (six percent of Hispanics), as refugees under the auspices of the federally sponsored and locally administered refugee resettlement program. The low unemployment rate, which has hovered around two percent for most of the last decade, and availability of jobs, ranging from highly technical and professional to those requiring few skills and little knowledge of English, as well as the lower cost of living in this rural region of the state, have made Harrisonburg an attractive destination for both refugees and immigrants. The resulting cultural diversity, which one usually associates with much larger cities, is reflected in the city school system where ESL (English as a Second Language) students, representing 39 languages and 53 countries (including the U.S.), comprised 34% of the total enrollment in Fall, 2004 (Harrisonburg City Public Schools. 2004).
Although owing much to agriculture, the local economy is well diversified, since the city of Harrisonburg serves as a governmental, commercial, industrial and educational center for the region. At a time when the national economy was experiencing little job growth, an article in the local newspaper, carrying the headline “Recession? What Recession,” (Wright, Dan, DNR 7-6-04:9,11), named Harrisonburg and Rockingham County among the top three areas of Virginia in job growth, with a job growth rate (2.5%) in 2003 that was about twice the national average. In August 2004, the director of the local office of the Virginia Employment Commission commented, “We are experiencing a low number of people filing for claims and large numbers of job openings.” (Norris 2004:11). Among the largest employers in the area are three colleges (with a combined workforce of 3,475), the city and county school systems (that together have 2,350 employees) and a community hospital (that employs 1,800), which offer highly paid jobs for their largely professional workforces. Although education and health care play important roles in the local economy, the largest sectors of the economy are wholesale and retail trade, which encompass 23 percent of local employment and 16 percent of gross wages, and manufacturing, the largest segment of the economy, which represents 28 percent of employment and 33 percent of gross wages (Central Shenandoah Planning District Commission 2000). While much has been written about post-industrial transformation and particularly the contraction of manufacturing in the United States, in the Shenandoah Valley, manufacturing remains a vital part of the economy (in spite of plant closures in neighboring counties that have eliminated the once-thriving textile industry in the area). Among the varied manufacturing operations in the Harrisonburg area, the largest is poultry processing (which is considered a form of non-durable goods). Five of the largest poultry-processing companies in the United States operate facilities in the city and county and employ a combined workforce of 5,450, making them the largest source of employment in the area, as well as the primary source of employment for immigrants.
It would not be an overstatement to say that the history of Latinos in Harrisonburg is tied directly to the poultry industry. Although the Hispanic population did not become sizeable until the 1990s, the first Latinos, all of Mexican background, who settled more or less permanently in the area, arrived in the early 1970s. For example, Carlos, who believes that he was the first arrival, came to Harrisonburg with his brother on his first trip to the U.S. in 1971, having been told about the area by his brother-in-law who had worked in the apple orchards in the Valley. Carlos and his brother sought work at Wampler and were hired. One of the plant employees, who spoke a little Spanish because he had lived in Panama, was especially helpful, finding them a place to live, signing for their purchase of food and loaning them money. In the following year, Leopoldo arrived in Harrisonburg along with 25 other individuals who were recruited by Marval Turkey Company, another locally owned poultry plant, through a “want ad” in an employment agency in El Paso, Texas. According to Leopoldo, the company hoped to recruit 35 couples—“they thought if they brought couples, they would stay”– but got only 25 people to agree to come to Virginia and of those, only four or five stayed. The others got homesick and left. For example, Leopoldo’s sister so missed chilies, which weren’t available anywhere locally, that she had them sent to her from Texas. Leopoldo came with his sister and brother-in-law by Greyhound bus and they were given $20 each for their expenses. When they arrived, they were “treated like royalty;” the company send their “best cars” to pick them up and arranged for their housing. They were paid $35/week plus lodging and three meals. The single people were lodged in a rooming house and the couples were given apartments for which they paid $8/week. After that recruiting experiment, the same company started bringing Mexican immigrant workers, reputedly without documents, from Colorado, while other workers came on their own from Florida, having either previously worked in the Valley as apple-pickers or having heard about jobs in the poultry plants by word of mouth. Leopoldo commented, “Eventually they started showing up, three or four at the door of the plant on any morning and Marval and Wampler had all of the help they needed.” “Poultry was the main employer since the apple orchards only provided work seasonally.” After three years in the Valley, Leopoldo went back to Texas and did not return to Harrisonburg until 1992.
In the intervening years, there were many local changes. During the 1980s poultry production expanded due to increased consumer demand for alternatives to red meat and the development of new products, causing a rise in production jobs in the labor-intensive industry (Hetrick 1994). Salvadorans began arriving in the local area in noticeable numbers in the early 1990s, having earlier fled the civil war and its aftermath in El Salvador. In the 1990s, Cubans also arrived in the area, mostly through the Refugee Resettlement program, but some after initial resettlement in Miami. Hondurans are the most recent arrivals, with most having arrived since 1998, the year Hurricane Mitch, one of the strongest hurricanes in history, caused widespread destruction in Honduras. For Mexicans, whose history stretches back to at least 1970 in the Valley, the “amnesty” law of 1986 (IRCA) permitted many previously undocumented immigrants to become permanent residents and facilitated their movement from seasonal agricultural jobs to more permanent and better-paid types of employment (see Cornelius 1992 and Griffith 1990). Locally, the previously small numbers of immigrant poultry plant workers increased dramatically because, as one poultry plant worker remarked, “people preferred to work in the poultry processing plants instead of tobacco fields or apple orchards.” As another worker pointed out, “No matter how slow you work, you still get paid by the hour (instead of by the piece).” At the same time, jobs were plentiful and easy to obtain in the poultry plants due to expanding production. In the late 1980s, local unemployment was about four percent and “probably no more than 5.0 percent of the hourly workers” were immigrants (RER Economic Consultants 2000:16), but the poultry industry’s dependence on immigrants increased during “the rapid expansion of the industry in the mid-1990’s as unemployment dropped below 3.0 percent” and “the outflow of young Shenandoah Valley natives continued.” (RER Consultants 2000:16). By 2003, an estimated 50-75 percent of the workforce in most of the poultry plants was Hispanic. While turnover was as high as 130 percent in the past, as immigrants rotated from one plant to another in search of hourly wages that might be a few cents higher, in recent years turnover has been lower. In some plants it runs as low as 30-40 percent. That Hispanic immigrants have created an employment niche in the local poultry industry is indicated not only by the percentage of workforce they now represent in the processing plants, but also by the fact that about 80-85 percent of new applicants at most plants are Hispanic. Commenting on the poultry industry’s increasing reliance on immigrant labor, the former president of WLR Foods (a locally-owned company purchased by Pilgrim’s Pride in 2001), remarked that the labor shortage is “the number one problem facing the poultry industry in the Shenandoah Valley” (Bauhan 2000:4). However, the growing availability of Hispanic workers, mostly through word of mouth, has ameliorated the problem. As a human resources manager for another poultry company said, “We don’t have a staffing problem. People usually have a brother or cousin who needs a job.” Although admitting that it is difficult and disagreeable work, another human resources manager said, “It’s good pay for someone with no English, skills or education.” Starting pay for entry-level production work in the plants in 2004 ranged from $8.35 to $9.40/hr. (live hanging pays up to $10.15/hr.), depending on the company and shift, plus full-benefits after 90 days (e.g. health and dental insurance, retirement and 401K plans). 6
Job opportunities and economic mobility for many Hispanic immigrants at the local as well the national level are constrained by lack of education. Data from the Hispanic Health survey of 213 Spanish-speaking residents of the city and county (Healthy CommUnity Council 2001), mirror national statistics showing that the educational level particularly of Mexican and Central American immigrants tends to be low. Fifty three percent of local survey respondents reported that they had either no education (10 percent) or less than six years of school (42.9 percent), compared to the area’s general population over 25 years old, 77 percent of whom have completed high school and 31 percent of whom have graduated from college (U.S. Census 2000), enabling them to secure better-paying, more highly skilled jobs. Despite the educational handicap suffered by many Hispanics in the local job market, their responses to other job-related questions showed that more than 80 percent were able to secure full-time jobs at which they worked 40 hours or more a week, with eight percent reporting that they worked more than one job and only two-tenths of a percent saying that they worked less than 20 hours a week. Additionally, 63 percent had an employed spouse and seven percent had children that help support the family. Seventy one percent of the respondents reported earning $8-10/hr. The responses suggest a very high level of labor force participation at wage levels, which, though relatively low, when multiplied by two or more workers within families, should create a modest level of consumer power. However, other responses to the Hispanic Health Survey suggest that many Latinos have little discretionary income.7 Asked about problems they have faced while living in the local community, 77 percent of respondents said that affordable housing was a problem; 64 percent said that they did not have enough money for food and clothing and 55 percent said that they did not have enough money to pay medical bills. Additionally, 64 percent reported that they send money home to relatives in their home country on a regular basis. Antonio, who sends money home to the Dominican Republic pointed out that “people don’t realize how hard immigrants work especially to be able to send money home to feed their families, sometimes doing without here to help them there.” There are no data on local Hispanics’ remittances, but, according to an estimate for Hampton Roads, another Virginia city, “Hispanics send about one third of their earnings to their home countries, while they “return about two thirds of the money they earn to the U.S. communities they live in” (Snider 2004).
Despite low wages, jobs in the poultry industry are considered by many immigrants to be a step up from migratory agricultural labor because they offer the security of year-round employment. As employers and employees agree, IRCA (1986) helped create the conditions conducive to bringing about change in the pattern of migration to the local area over the past decade from temporary or cyclical to more permanent settlement. Prior to the “amnesty” that granted those who were eligible their “green cards,” men typically would leave their families in Mexico and return home periodically. Many returned to Mexico yearly at Christmas for one to three months. After adjusting their legal status, it became easier to get more permanent jobs in the poultry plants and this induced the men, who were now able to sponsor their relatives, to bring their wives and children to the local area. These changes are reflected in the growth of the city school system’s ESL (English as a Second Language) program, which was formally instituted in 1983. The program has grown from six (Vietnamese) students in 1986 to 1,422 (of 4,151 total students) in Fall, 2004, 72 percent of whom speak Spanish as their first language and 46 percent of whom were born in the United States (Harrisonburg City Public Schools 2004). The Hispanic Health Survey also showed that 81 percent of the households surveyed had one to three children under 18 living in the home (Healthy CommUnity Council Survey 2001).
Another indicator of more permanent settlement, as well as a growing Hispanic consumer market, is home-ownership. Responses from the 2001 Hispanic Health survey indicated that over 26 percent of respondents owned the place where they live. For some of the respondents, owning their own home means owning a mobile home parked on a rented lot in a trailer park, but for a small, but growing number it means a townhouse or detached house, in the $100,000-200,000 range, in the city or the county.8 From records of real estate transactions during a 10-month period in 2003 (in the city and county), it appears (from Spanish names) that Hispanics purchased about four percent of the homes or land worth over $100,000.
In order to understand more fully the structure of opportunity for immigrant entrepreneurship, it is important to understand not only the opportunities provided by a growing Hispanic market, but also the alternate avenues of mobility available to Hispanic immigrants that may divert potential entrepreneurs from starting their own businesses. Whether in the poultry plants or other sectors of the local economy, job mobility generally requires fluency in English, literacy and numeracy. Even highly trained immigrants (and especially refugees) often find themselves working in the poultry plants for at least some period of time because they do not speak English. For example, although Felipe’s sister-in-law completed a medical degree in Nicaragua, she is working in a poultry plant (while she studies so that she can practice here), because she speaks little English. Similarly, Ricardo’s brother-in-law studied engineering in Mexico, but he also works on the production line. Since many Hispanic immigrants do not have such technical training, much less English language skills, their prospects for job mobility within the mainstream economy are limited. However, they do create special employment opportunities for individuals who have bilingual skills. Given its rural setting, Harrisonburg may be unique in its access to such individuals through a variety of sources. One such source is over 200 local churches, many of which have very active missionary programs in Spanish-speaking countries, and thus, create a pool of bilingual individuals locally who have either learned Spanish abroad or who are native speakers of Spanish drawn to the area by church affiliations and marriage to locals. The colleges are another important source of interpreters and translators for the community, attracting native Spanish-speakers as students, faculty and staff and offering training in Spanish to non-native speakers. Among the students are a small number of children of immigrants who have completed public school in the local area and gone on to college. Another source of individuals with bilingual skills is the poultry industry itself, as well as other national and international companies, that have facilities in the area and recruit employees for professional and technical positions, (e.g. avian veterinarians, USDA inspectors, chemists, engineers). Some of these professional positions are held by college-educated immigrants whose bilingual spouses and children are able to capitalize on their language skills. Bilingualism (and biculturalism) has become an advantage in the local job market since the need to communicate across the language barrier is being felt in every corner of the community. Early on, the poultry plants realized the necessity of hiring bilinguals for supervisory and human resources positions. For example, Manuel, who is bilingual and worked previously in human resources at one of the poultry plants said, “At the beginning it was rough for the people and for management because of the communication problem.” However, the company he worked for had already had some experience in dealing with Hispanic workers because they had a large Spanish-speaking workforce in plants that they purchased from a competitor in Pennsylvania in the 1980s. “They had success with them (Hispanic workers) because the HR people were bilingual.” When he first came to Harrisonburg, Anthony, who now owns his own business, took a job in a poultry plant and worked his way up from production worker to supervisor largely because of his ability to speak English. “The key was that I could speak English because 90 percent of the workers were Spanish-speaking. I could talk with them and that was a big advantage. I could work with whites, blacks and Hispanics and I didn’t need an interpreter.” Eventually the local school system and health and human services also began hiring bilinguals for a variety of positions, either to provide direct services to monolingual Spanish speakers or to provide interpretation and cultural brokering between English-speaking service providers and Spanish-speaking clients.
As the Hispanic population has continued to grow, local businesses have also begun to realize the purchasing power of Hispanics. Although there are no local figures available, Hispanic purchasing power is estimated to be $630 billion nationally (Levine and Marcus 2003: 1) and over $8 million in Virginia (Humphreys 2004:19). Many local businesses have made a concerted effort to lure Hispanic customers by offering ethnically-oriented products, providing advertising and signage in Spanish and hiring bilingual employees.9 For example, Food Lion, a supermarket chain that operates throughout the South, offers an in-store advertising paper in Spanish that features weekly specials on ethnic-label food products, while the two Super Wal-Mart stores, one each in the city and county, offer everything from specialty cuts of meat and condiments to face creams and votive candles imported from Mexico. They also stock Spanish language music, movies, magazines and greeting cards. An assistant manager at one of the local Wal-Mart stores estimated that Hispanics constitute 25 percent of the store’s customers during the week and 40-50 percent on Sundays. In order to lure Hispanic customers, a variety of other non-Hispanic owned businesses, including real estate, auto sales and repair, banks, mortgage companies, furniture rental, cellular phone and satellite dish sales, chiropractors, doctors and lawyers, place ads in the local Spanish-language newspapers, highlighting the fact that they have Spanish speaking personnel, whose names and photographs are often included in the ads. With regularly appearing ads in the Spanish language newspaper, the Puerto Rican-born associate agent of a locally owned insurance agency estimates that 65-70 percent of the company’s 3,500 customers are Hispanic. (Wright 2004:4). In addition to being able to communicate with clients in their own language, she also finds herself educating them about the legal requirements for and purposes of insurance. Similarly, Gertrudis brought in enough Spanish-speaking clients during the two years that she worked as an interpreter for a local realtor that the company recently offered to pay for her training to become a real estate agent. Anthony also believes being bilingual was one of the reasons that he was hired by the local outlet of a national chain store to sell auto parts. Although he concedes that the pay was good, he eventually quit because “the job became too tough” due to the excessive demands customers made of him because of his language skills. “There was always a long line of customers and people were always hanging around because they had lots of things they needed to do.” Anthony’s experiences are common since the language needs of the community are so great that persons in a position to offer help are often overwhelmed. However, by offering services in Spanish and catering to Hispanic consumer tastes, mainstream businesses not only create job opportunities for qualified Hispanics that may make self-employment seem less necessary or appealing, but they also create a very competitive market for would-be immigrant entrepreneurs’ products and services.
As more national chain stores move into the local area, the market continues to become increasingly competitive for all small businesses. Wal-Mart, which is the largest retailer in the world, has been a principal focus of local activists protesting the demise of locally-owned businesses in the face of competition from the mammoth retailers, but there is little reason to think that the trend will stop. In 2003, the city and county together were designated as a Metropolitan Statistical Area (MSA) because of their combined population of 108,193. Because this designation is attractive to national retailers looking for new markets, including the growing Hispanic market, local officials feel that the local area will experience accelerated commercial growth. In less than a year after the MSA designation, a new shopping center, featuring two “big box” stores, as well as other national chain stores and restaurants, have opened and city sales revenues increased 5.4 percent in one year from $36.9 million in 2002 to $38.9 million in 2003. With over 200 establishments selling prepared food, Harrisonburg’s restaurant sector alone generated over $89 million in taxable sales (state tax is 4.5 percent), while the city’s six percent meals tax contributed about $6 million to city coffers in 2003. Although there are no data available on how much Hispanics spend locally, an idea of their spending power can be gleaned from the fact that Hispanics spent an estimated $250 million on consumer goods and services in the Hampton Roads region of Virginia in 2003-4 (Snider 2004).
In addition to the fact that the low unemployment rate means that more local residents have discretionary income to spend, tourists’ and college students’ spending also contribute substantially to the economic stability of the local area, albeit with some seasonal fluctuations. Because college students represent approximately one-third of the city’s population, school breaks affect many businesses. For example, sales at the Food Lion grocery store located near campus double during the school year. (Wright 2004:9,11). It is not clear how significant the effect of seasonal movements of migrants has been on the local economy, but they do appear to create some seasonal fluctuations in sales for Hispanic businesses. For example, the owner of a tortilleria (tortilla factory) reported that he has a “slow season,” during December and January, when many Mexicans go home for the holidays and religious festivals. His busiest season is August through October, which is when apples are harvested in the Valley, bringing migrant agricultural workers into the area. Many other businesses are affected by seasonal fluctuations in different sectors of the consumer market.
Despite these seasonal fluctuations, business owners regard Harrisonburg as a good town for business. As one business owner commented, “(City Council) has an eye for growth and JMU almost makes the city recession-proof.” (Wright 2004:4) Likewise, Hispanic business owners believe that the local Hispanic population has grown sufficiently large to support their businesses. For example, Manuel feels that “in 1995 there weren’t enough Spanish here to keep a store.” “Now an electronics store, a store with the same mix I had in Miami, can work.” However, it would involve the “sacrifice of having to be there 24 hours a day.” He thinks he could compete with the big box store competitors by offering “customer service, personalized service.” According to Manuel, the important thing is to spend time chatting with customers. “He will be happy and I will be happy and that is how the business grows because he will tell a friend. If I take this attitude to the store, people will come.”
Other business owners share Manuel’s feeling that Hispanics in the local area represent a consumer market waiting to be tapped. According to Sergio, who owns his own business, “Hispanics are big consumers because they want all the things they were not able to buy in their own countries. Here everyone wants to buy houses and cars. In my own country, I didn’t own a car. I didn’t even own a bicycle.” Similarly, Jesus, who is a salesperson, observed that when Mexicans come here, they want the best they can buy because they have never been able to afford anything previously. “In Mexico, to have a cell phone and a car, you have got to be rich. People work just to survive. They can’t even afford to buy clothes. They feel lucky if they can buy clothes on their birthday. Here they go for the highest price and top of the line because of pride. They like to get something they never could afford. They are in a place where they can afford things, so they go for the highest priced things. This goes for everything. They have the opportunity to do so, so they go for expensive cars, audio systems…They want to have the best.” Felipe, another business owner, made a similar observation. “They want to live well. In their own country they can’t buy things and there isn’t much available. Here Hispanics will buy a big screen television, while ‘Americans’ will buy a smaller television. Americans are more “calculador” (calculating).” Likewise, Graciela observed, “To the Hispano, what he pays for a product, five dollars, ten dollars, or whatever it costs, isn’t important. He doesn’t put a price on it, especially on things from his own country.”
Explaining how Hispanics contribute to the local economy, Sergio added that “they do their transactions in cash instead of credit cards, so you (businesses) don’t have to wait to get their money.” Though many immigrants have never had a bank account or written a check and maintain the custom of paying for all of their purchases in cash, others discover that in the U.S. almost any one can get a credit card and purchase things on credit that they could barely dream of owning before coming to this country. Voicing the commonly held sentiment that Mexicans come to the U.S. “for a better life, a better way of living,” Aron, who is self-employed in construction, explained what that means to him. “Here you can own your own car and there everything has to be paid for in cash. There are no opportunities to buy anything on credit.” Tomas, who is one of the most successful businessmen in the community, summarized these characterizations of the Hispanic consumer perhaps most succinctly when he said, “Latinos are 100 percent consumers. We buy things we don’t need.”
In addition to perceiving opportunities in the local Hispanic market, some Hispanic business owners expressed the opinion that the U.S. offers a better environment than their home countries for conducting business. For example, Graciela and her husband opened a small grocery store in their hometown in Mexico with money they had earned in the U.S, but closed the store after two years and returned to the U.S. because “the economic situation in Mexico was very bad in 1992.” Other business owners talked about the negative effects of corruption in their home countries. Lucrecia, who also owned a business in Mexico before coming to the U.S., said, “In Mexico, corruption affects people’s ability to run their businesses. There are payoffs for things. For example, in Mexico, if a person wants an alcohol permit, all they need to do is pay the right people. Here they check on you. We are happy for the hard time. Here the health department really inspects unlike in Mexico where you can get away with a payoff.” Other business owners also raised the problem of corruption in their home countries. For example, Jaime, who previously owned his own business in the Valley, stated that in his opinion, “one of the things that keeps Hispanic businesses behind” is that they are used to operating within systems in their home countries where rules and laws are often circumvented. He also cited the “mordida” (bite) taken by corrupt officials in order to get anything done, as well as the fact that outside of main cities, taxes are often not collected. In contrast, Marco, remarked that he believes “very much in following the rules as they are conceived in this country.” “In Uruguay there is a lot of corruption. People pay bribes. It’s the same in Argentina and Brazil. But if you do things correctly, you will never have problems here.” He is also very impressed by the “order, the correctness and cleanliness” in the U.S in contrast to Uruguay where “order in all senses of the word doesn’t exist.” Asked what he has learned from his experience in business, he concluded, “To do things well with sincerity, education and respect. I learned this here.”
The development of Hispanic-owned and oriented businesses has increased largely in tandem with the growth of the settled population over the last decade. Since the first Hispanic-owned business in Harrisonburg opened in 1989, about 80 Latino businesses have operated within the city, some for less than a month, a few for over 10 years, but 25 of 40 existing businesses have opened since 2000. Many business owners expressed the opinion that it is the right time to start a business in Harrisonburg because there are now enough Hispanics in the area. For example, in 1992, when Felipe came to Harrisonburg for the first time, he worked in one of the poultry plants where “the workers were 80 percent ‘Americans.’” Three years later, when he returned to Harrisonburg and the plant, “the workers were 80 percent Hispanics.” Similarly, when Manuel came to Harrisonburg from Miami in 1995 “there weren’t enough Hispanics here to keep a store” and Anthony feels that his first business in Harrisonburg did not succeed because the Hispanic population was not sufficiently large in 2000. While almost half of the 80 businesses have closed or changed ownership over the last decade, among those that have survived, about a half dozen have thrived, expanding to multiple locations or operations (i.e. three retailers have expanded to wholesale) and several owners have more than one business. The total number of businesses that have opened over the last decade suggests a much greater propensity among Hispanics to start their own business than would have been captured by a shorter time frame or by just considering businesses that have survived for a given period. It is also clear that many more Hispanics would like to start their own business than are actually able to do so. As Sergio commented, “Most Hispanics in the poultry plants want to have their own business, but they don’t know how.” Many people would agree. In conversations, people frequently brought up their dreams and plans for opening their own business, although they were stymied by a lack of capital, English proficiency or knowledge of “how the system works” in a new, foreign environment. For example, Gregorio wanted to start his own business offering computer courses in Spanish and prepared a slide show as a marketing tool. He approached the managers at his place of work with the idea and when they said they were not interested, he felt very frustrated. After other attempts to launch his business failed, he returned to Mexico. The dynamic nature of the local Hispanic business scene, with constant openings and closings, suggests that in determining the propensity for entrepreneurship among Hispanics a distinction should be made between the capacity to start a business and the capacity to sustain one. Clearly, more attention needs to be paid to this aspect of ethnic entrepreneurship since national statistics show that about a quarter of all small businesses, regardless of the ethnicity of the owner, fail within two years and over 60% fail within six years (Phillips and Kirchhoff 1989).
Another view of local Hispanic businesses is provided by data contained in a Virginia business-to-business directory. Of the twenty-four Hispanic-owned businesses listed in the 2002-3 directory (American Business Directories 2002-3), five were in existence for over 10 years (although two had different owners), while 12 existed for only two years (and the remaining businesses were in existence for three to 10 years). By 2004, eight of the 11 newest businesses no longer existed, but all of the oldest businesses were still in operation. All of the defunct businesses were in the directory’s lowest category in terms of sales, with less than $500,000 in sales/output. However, it should be noted that twenty of the twenty-four businesses were in the same category, while three businesses had $500,000 to $1 million in sales and only one had estimated sales of $2.5 to 5 million. Credit ratings ranged from “excellent” for 1 business and “very good” for seven to “good” for seven and “unknown” for nine. All of the eight businesses that failed had either a “good” or “unknown” credit rating. Half of the 24 businesses had only one to four employees; five had five to nine employees and seven had 10-19 employees. No business had 20 or more employees (at one location) and all but one of the businesses with 10 or more employees were restaurants.
The types of businesses owned and operated by immigrants are central to understanding why such businesses exist at all. One of the main features that make immigrant-owned businesses distinct from mainstream businesses is that they tend to be directed toward a co-ethnic clientele’s demand for special goods and services and often are concentrated in a narrow range of businesses (e.g. restaurants and retail sales). When the concentration of co-ethnics and capital is large enough (e.g. Little Miami or Chinatowns), the range of goods and services provided may be sufficiently large to parallel or duplicate, though not completely, the mainstream economy (thus, the notion of the “ethnic enclave economy”). However, not all immigrant-owned businesses operate exclusively within the ethnic community. Some immigrants operate within the mainstream economy or as “middlemen minorities, providing goods and services to other minorities, such as African Americans, in inner cities (see Light and Bonacich 1988 on Koreans in Los Angeles and David 2000 on Chaldeans in Detroit). 10
In Harrisonburg, only Hispanics (and possibly Russian-speakers though they have developed fewer businesses), among the immigrants of two-dozen nationalities who own businesses, have a sufficiently large ethnic community to permit targeting solely or primarily a co-ethnic clientele. In fact, the Hispanic community is now sufficiently large, so that two Asian-owned businesses are also oriented primarily toward a Hispanic clientele. The types of businesses owned locally by Hispanics represent a narrow spectrum, albeit typical of immigrant-owned businesses generally. One common characteristic of these immigrant-owned businesses is that they tend to involve low start-up costs and relatively easy entry. In Harrisonburg, restaurants comprise the largest category of Hispanic-owned businesses and the only category that aims to attract mainstream “American” customers in addition to or instead of Hispanics. The owners of the most successful restaurants estimate that 90-95 percent of their customers are “Americans.” Over the past 10 years, about 25 Hispanic-owned restaurants have operated for some period of time, but 10 eventually closed, reflecting the high failure rate for local restaurants generally, possibly because of an oversupply, since there are 212 establishments (according to the Harrisonburg Commissioner of Revenue’s office) that sell prepared food and beverages in the city alone. At the time of the research, there were 15 Hispanic owned (including two couples of mixed ethnicity) restaurants in operation, offering Mexican, Salvadoran, Caribbean or Italian food. Although a few of the larger restaurants cater primarily to an “American clientele,” the smaller restaurants tend to be oriented to Hispanics, since the menus and limited English speaking staff discourage non-ethnic patronage. In the smaller restaurants, owners report that their customers are over 80 percent Hispanic.11 Whether or not they specifically target a Hispanic clientele, restaurant owners may feel that they have a captive audience in Hispanic immigrants since, as one previous owner explained, “Hispanics don’t go to ‘American’ restaurants because they don’t know what they have and American restaurants aren’t going to have a menu in Spanish.” In addition to familiar food, several of the local restaurants also hold dances with live bands, either imported or locally based, on a regular basis. By providing entertainment in addition to food, they create spaces for Hispanics to come together in an area where there are few such opportunities.
The second most common type of Hispanic-owned business involves retail sales of ethnic food (e.g. a tortilleria and a panaderia) and/or other products (e.g. clothing and music). Among these businesses is a type of store that is often referred to as a “tienda hispana” or “tienda latina.” There are currently eight “tiendas hispanas” in Harrisonburg, as well as an additional “tienda,” that is Asian-owned. The latter store opened originally as an Asian grocery store, but the Asian population has remained relatively small while the Hispanic population’s growth has accelerated in the last few years. Over time, the owners have incorporated more Hispanic products, advertise in the Spanish-language paper as a “tienda hispana” and currently have more Hispanic than Asian customers. The owner has also learned some Spanish in order to communicate with customers, as have the owners of several Asian restaurants in town. Asked to describe the meaning of “tienda hispana,” one owner explained that it is means that “most of the products are from Hispanic countries, like Mexico, Colombia and El Salvador, and that you can’t find anywhere else,” while another said that it is a place where a Spanish-speaking customer can go and know that they will be able to communicate in their own language. In terms of the merchandise that it offers, a “tienda hispana” is similar to the kind of “general store” that was once common in the rural U.S, though now supplanted by Super Wal-Marts, and that is still common in rural areas of Latin America. The “tienda hispana” offers, in addition to ethnically-oriented groceries, a varying mix of merchandise that can include clothing, music, patent medicine, cookware, knickknacks, toys, greeting cards and religious materials. Telephone cards are a ubiquitous feature of all of these stores, capitalizing on immigrants’ desire to stay in touch with family left behind in their home country. In one ‘tienda’ that stocks a huge display of 72 kinds of cards with enticing names like “El Picante,” (the spicy one) the owner estimated that she sells about $1000 worth of cards a week. Most of cards, which are designated for calls to specific countries, are purchased by individuals to call Mexico, Honduras, El Salvador and Guatemala. Some “tiendas” also offer additional services, such as Spanish-language video rentals, money orders, “envios” (remittance service) and tickets for private “first class autobuses” that service the South and a variety of destinations in Mexico. In addition to offering imported goods from home and services geared to the specific needs of immigrants, what makes these stores distinct is that business is conducted primarily or exclusively in Spanish and 90 percent or more of the customers are Hispanic. The major attraction that such stores hold for nostalgic immigrants is that when they enter a “tienda hispana,” it sounds like and feels like home. A Mexican woman who had been in the U.S. for six months remarked that she feels “asustada” (shocked) whenever she goes into a mainstream store because she can not speak English. She believes that most immigrants shop in a Hispanic-owned store, even if the items cost more, because they feel more comfortable being able to communicate in their own language. Even if they are able to speak English, immigrants often prefer to do business in Spanish. As Manuel explained about a just completed business transaction, “many customers prefer to do business in Spanish because it gives them a sense of security to use their first language. Even if we speak English, since we didn’t attend college here, we don’t have all of the vocabulary of a native-speaker.” By creating ethnic spaces, Harrisonburg’s Hispanic businesses thus serve the symbolic as well as material needs of the community (Wood 1997).
A third area of concentration of Hispanic-owned businesses is in the service sector. These businesses offer a variety of services, catering to the special needs of non-English speaking clients. For example, several beauty salons cater to the hairstyle preferences of the community and offer the additional advantage that customers can communicate their preferences in their own language. The comfortable, “just-like-home” atmosphere of the stores is also created through regional and Latin pop music, that replaces the mainstream “musak” of national chain stores, and the ever-present television showing satellite-delivered Spanish language “telenovelas” or talk shows, perhaps as much for the entertainment of the owner as potential customers. Shortly after installing a television in her business, Susana explained that she did so “so that people will feel a little bit of their own country, so they will feel comfortable.” Other service-oriented businesses include a “travel/multiservice” agency, and a taxicab company, as well as two Spanish-language newspapers that serve as major sources of information and advertising for the Spanish-speaking community. A separate business publishes a business directory that has as one of its purposes, acting as a bridge between the Hispanic and ‘American’ communities.
Nine businesses are associated with the sale, repair or care of automobiles. Harrisonburg is a regional hub for automobile sales and has almost 100 dealerships in the city and county, 78 of which sell used cars (according to the 2004 Yellow Pages), but within this business sector, Hispanic dealers specialize in selling used cars to an almost exclusively Hispanic customer base. Owners of repair businesses also focus on serving a Spanish-speaking clientele, offering an array of services, ranging from mechanical repairs to bodywork and from detailing to sound system installation. There is a very large market for used cars locally, due partly to the presence of a regional auto auction in Harrisonburg, but more importantly due to the limited public transportation system. Subsidized by the college and geared primarily to the needs of students, the public bus system is impossible for Hispanics to use to get to work. None of the bus routes extend to the poultry plants, most of which are located in the county rather than the city, and using the bus for other purposes, such as medical appointments, involves long waits and inconvenient routes and schedules. Not surprisingly, one of the purchases immigrants most urgently aspire to make is a car or truck.
In addition to specializing in a narrow range of goods and services, immigrant businesses also tend to differ from mainstream businesses in terms of location. While location is an important consideration for anyone starting a business, for immigrant entrepreneurs, the most advantageous location is usually within an immigrant neighborhood or enclave, close to their customer base. For example, in Huntington Park, a suburb of Los Angeles, where 96 percent of the residents are Hispanic, a one-mile stretch of a major thoroughfare contains 580 stores, most of them immigrant-owned, as well as numerous street vendors that cater to the area’s Spanish-speaking customers (Guarnizo 1997:15). In contrast, in Harrisonburg, despite a few emerging immigrant neighborhoods (including older apartment complexes abandoned by students), the largest number of immigrants live in several trailer parks that ring the city and none of these residential areas has given rise to a concentrated development of Hispanic businesses because no suitable or affordable commercial property is available close by. One exception is a cluster of four adjacent storefronts downtown, which in recent years has housed an ever-changing array of Hispanic-owned businesses. However, a downtown revitalization project has recently put the future of those locations in jeopardy. Apart from this cluster, the majority of Hispanic-owned businesses are scattered across the city, often in out-of -the -way locations. Despite the fact that rents and other operating expenses are presumably lower in the county, very few Hispanic businesses have located outside of the city. This is probably because far fewer Hispanics live in the county than in the city. Although most of the poultry plants are located in the county, most of the rental housing and trailer parks are located in the city or just outside the city limits. One of the few Hispanic businesses located outside of the city is advantageously located in close proximity to a poultry processing plant with many Hispanic workers.
The lack of clustering of Hispanic businesses in the city is due largely to the availability of affordable commercial space, which is, in turn, the result of the way commercial areas developed in the city. As businesses began to outgrow the original downtown area, they moved out along a few commercial corridors and more recently to strip malls with adjacent parking. As new locations continue to open, these older commercial areas, including the downtown area, have been abandoned, leaving behind vacancies that are considered to be less desirable because they see little consumer traffic. In contrast, the newest locations, usually owned by corporations located outside of the local area, are highly desirable because they are “heavily trafficked” and command higher rent, typically $18/sq. ft. According to a realtor who specializes in commercial properties, the rent for older, but still “good locations, though not prime” runs about $10-11/sq. ft. while older, smaller properties in “off locations that are not heavily trafficked” are usually locally owned and open to more negotiation between tenant and landlord. Some owners will accept lower rent in order to fill their space. They may also be willing to accept a one to two year lease instead of the more common three-year commitment. These inexpensive, but low visibility locations, scattered throughout the city, are the ones that most Hispanic business owners seek out. In addition to paying rent on storefront space, renters may also have to pay rent on a “ground lease,” since it is not unusual to have separate owners for the land and buildings on it, and a “common area maintenance fee” (CAM) which usually costs an additional $1-2/sq. ft. Who pays for renovations to the space varies. Usually the renter pays for fixtures and the installation of a kitchen for a restaurant, while the owner is more likely to pay if walls have to be added or removed.
All of the owners are first generation or “1.5 generation” (who were born abroad but came to the U.S. as children or adolescents). This may be partially due to the fact that the community has not been settled long enough to have many second-generation children reach adulthood and partially due to the fact that second generation children who have reached adulthood have not gone into business for themselves. It may be that self-employment is less appealing to them because they are bilingual (and often better-educated) and therefore have better employment opportunities than do their parents who often speak little or no English.
Most of the businesses are “mom and pop” operations run by married couples, often with the help of their children, siblings and other relatives. Eight businesses are owned by a single individual, including three owned by women, although all have family members “helping” in the operation. The remaining five businesses are described by the owners as “partnerships.” The partnerships involve mostly siblings, but two involve only unrelated individuals. Although most of the businesses are small and struggling, three or four businesses have been quite successful if success can be measured by multiple locations and larger numbers of employees. Vicente, for example, owns five restaurants and employs about 80 people, including all of his adult children. Tomas, who started his first business in Harrisonburg in 1996, rapidly expanded to two businesses in five locations within two years. There are also kinship connections among some business owners, with separate businesses owned by members of the same extended families. Among the Mexican-owned businesses, over a half dozen are owned by members of two of the oldest extended families in the area, but similar connections are also found in other nationality groups.
Another striking characteristic of at least some Hispanic business owners, who come from predominantly Catholic countries, is their membership in Protestant, and particularly evangelical or Pentecostal churches, which members refer to as “Christian churches.” Asked why she felt that Hispanic business owners belong to these churches, Graciela, who is herself a business owner and member of a “Christian church,” responded that it was because they come to this country with “a lot of spiritual need.” “God offers many promises and people who know “la voluntad de Dios” (God’s will) will prosper spiritually and in their businesses.”12 Concha, who belongs to a different church than Graciela, said that she and her family received a lot of help from “cristianos,” two of whom gave her places to stay when she first came to town. She also met her husband through the church and feels that God helped her when she started her business. Barbara said that one of the reasons she and her husband decided to start their business in Harrisonburg was because of her religion. Her church is located close to her store and she sells religious materials that appeal to evangelicals, as does Graciela. While there is one store that currently specializes in items used in Catholic religious ceremonies (e.g. baptisms, first communion and weddings) the owner of another store, now closed, explained that she did not carry such items because she is a Jehovah’s Witness. She said that since she did not believe in those things, she did not sell them. For the same reason she did not sell jewelry. In another case, a store closed because, according to rumor, the owner “mixed religion too much with business” and there was not a sufficiently large community of like-minded believers to support the store.
Although much of the research on immigrant entrepreneurs has focused on their individual and social (demographic) characteristics, comparisons of entrepreneurs with co-ethnics who have not started their own business are rare, but the Harrisonburg data permits comparisons on several points. Reflecting the diversity of the local Hispanic population, which includes people of at least a dozen nationalities, the Hispanic business owners are also quite diverse, representing eight countries: Mexico, El Salvador, Honduras, Dominican Republic, Cuba, Puerto Rico, Uruguay, and Argentina. Harrisonburg may be unique for a city of its size in having attracted immigrants from such a wide variety of countries in Latin America, since the majority of rural Hispanics nationally are of Mexican origin (Effland and Kassel 1998). On the other hand, Mexicans also constitute the largest Latino group locally (63 percent according to the Hispanic Health Survey), so it is not surprising that about half (20) of the business owners are from Mexico. While six owners are from the Mexican state of Jalisco, which has a long history of migration to the U.S., the rest of the Mexican business owners come from 11 different states–Aguascalientes, Coahuila, Guanajuato, Guerrero, Hidalgo, Mexico, Michoacan, Queretero, Tlaxcala, Veracruz and Zacatecas–, suggesting that immigrants are now coming to the U.S. from many more areas of Mexico than traditionally has been the case.
Responses to the Hispanic Survey (2000) showed that 66 percent Hispanics locally are in their prime working years, between the ages of 25 and 44, with 24 percent under 25 and only nine percent over 45. Similarly, of the 44 business owners and spouses for whom data was available, the majority (33) were 25-44 years old, while only four were under 25 and six over 45. Since all of the owners over 45 have been in business longer than younger owners, it appears that individuals tend to go into business for themselves during their prime working years.
On the Hispanic Survey, 62 percent of respondents reported that they were married and another eight percent said they were “living together,” while 18 percent were single, and seven percent were divorced. Similarly, the majority of business owners reported that they were married or, in three cases, living together; four said they were divorced or separated and only one owner, a man, was single. Although a direct comparison of family size is not possible because the Hispanic Health Survey reported only the number of children under 18 in a household rather than in a family, a more general comparison is possible. In the Survey, 88 percent of households contained one to three children under 18. Among the business owners, only one married couple had no children, while the majority had two children.
Educationally, the Hispanic Health Survey showed that more than half of the respondents had less than six years of school, including 10 percent who had no schooling at all. About 22 percent had some secondary school and another 22 percent completed high school or GED, while 13 percent had had at least some post-secondary school education (eight percent had some college, 1.7 percent were college graduates and 3.4 percent had a post graduate degree). The survey did not seek to distinguish between individuals who were educated in the U.S. and those educated in their home country. In the interviews with business owners, information on education was available for 38 individuals (24 men and 14 women). Of these 38 individuals, only two, a married couple (who have assumed responsibility for a business started by their son), reported having less than a primary school education (which consists of six years in almost all Latin American countries). One third (11 men and two women) completed secondary school in their home country, which actually means that they completed an additional 3-4 years beyond primary school –that is, eighth or ninth grade– since most Latin American countries distinguish lower (also called basic or general) secondary school and upper secondary school (called “Preparatoria” in Mexico) which consists of another 3 years and awards graduates a “bachillerato.” Six (three men and three women) completed upper secondary school and received some form of specialized training (e.g. nursing, teacher education), while eight individuals (four men and four women) attended and/or completed university in their home countries. An additional six individuals, all but one of whom are “1.5 generation,” completed high school or the GED in the U.S. and of these, two also attended college or completed graduate school in the U.S.
These statistics suggest that, at least in the local area, Hispanic entrepreneurs tend to be somewhat more educated than the general Hispanic population. They are also very aware of the financial advantages of being educated. Many spoke of their own aspirations for more education and being thwarted by a lack of money and family obligations. Carlos, for example, wanted to be an airline pilot, but his father died when he was in high school and he had to support himself and his mother. Because it was too expensive to study to become a pilot, he became an elementary school teacher instead. After becoming disenchanted by the interference of party politics in the government-run school system, Carlos left teaching and Mexico. Roberto left El Salvador after realizing that his secondary school certificate got him nowhere. After coming to the U.S., he came to understand that even in the land of opportunity, education makes a difference. While working in the poultry plants, he observed that the people, who did ‘the hard, low-level jobs, were paid very little, while those with the high level jobs, work less and earn more.” He therefore advised his “novia” (fiancé) to go to college and “study for a career so she can do what she wants for the future.” Finding it hard to understand ‘Americans’ who “graduate and don’t do anything,” Roberto regrets the opportunities he missed because he does not have a college education. As he explained, “If I had the opportunity to get an education, I could be a doctor or a lawyer, because there are always job openings for them. For teachers, engineers, administrators in large companies, there are always jobs.” Felipe also spoke of his regret about not being able to complete his education. He started business school in Mexico, but had to quit after one year, because he wanted to marry and did not think he could support his wife and succeed in his studies at the same time, since Mexican universities are “very competitive.” About the possibility of returning to school in the U.S., he said, “I’ve been here four years and I can’t go to school here to get ahead because I don’t have the money and I don’t have the time to go and in some schools, the classes are too basic.” Similarly, Antonio is 11 credits short of finishing his bachelor’s degree in business administration from an American college. He said he could not afford to go back to school to finish now that he has a wife and two children. Tomas also talked about how financial difficulties made it very difficult to even finish secondary school in Mexico. Working two jobs, one during the day and one at night, he finished high school by attending a program called “ensenanza abierta” (open study) which was an intensive course that he attended on Saturdays. “You have to have a lot of “ganas” (desire) to do this. I know lots of people who go on with this for years and don’t finish.” Susana also took an alternative course to finish high school. When her father brought her to the U.S. at age 16, she wanted to study to become a nurse, but her father wanted her to study cosmetology because it does not take as long to finish. According to the law, she should have been in high school, but at her father’s insistence, she took the cosmetology course instead. She later went back to school to earn a GED. Concha, who finished ninth grade in Mexico, confided that she would have liked to study to be a journalist, but did not have the chance. She said, “I had nothing in Mexico and there is no help, but here there is the advantage of having all sorts of help for people who want to work to get ahead. If I were to fail and return to Mexico, I would have nothing of my own there.” She added that she wants to succeed in her business for her daughter’s sake.
Owners are also very aware of the disadvantages they face in business and life in the U.S. because of their lack of fluency in English and most have tried to learn. For example, despite having a university degree in accounting, Graciela went to work on a poultry plant production line when she first arrived in Harrisonburg. Quickly deciding that she did not want to spend her life there, she knew that she needed to learn English in order to have a better future. She attended the local adult learning center and also worked with a tutor for a year in order to learn English. On the other hand, Tomas, who is acknowledged by the community to be one of the most successful business owners, admitted, “In my life I was always very poor and I was lucky to see the possibilities and to take advantage of them. My “fracaso” (failure) was not learning English. My 12-year-old daughter asks, “How many years have you been here?” I say,” Twenty.” “She says, “Why haven’t you learned English?” He realizes it has kept him back in business. “I have problems because I can’t understand how to read English. I have to guess at the meaning. It makes me dependent on others.” However, this disadvantage is balanced by the fact that 97 percent of his “tienda” customers are Hispanic, so that speaking English is not that important except in his restaurant where he has more ‘American’ customers, although even there, they are “at the margin” of his business. Vicente, who is also very successful in his enterprises, has also found that English was the biggest barrier for him in doing business in the U.S. Because 95 percent of the customers in his restaurants are ‘American,’ he knew when he started that if he “had to have American customers,” he would have to learn English. He has taken intensive English lessons and, by his own appraisal, “learned quite a bit.” Yet he finds it “too hard to do business in English” and therefore went back to Mexico to start his newest business. For Eduardo, who also owns a restaurant and whose customers are also “95 percent Americans,” “not speaking English well enough at first” was the hardest thing about starting his own business. Although he studied English in secondary school in Mexico, he only knew words and could not carry on a conversation. He learned English by just practicing with the customers in the restaurants where he worked and American friends. Similarly, Catarina and David studied English in El Salvador, but “didn’t learn anything.” Laughing at how wrong she was, Catarina commented that she did not pay attention in class because “I didn’t think I would ever use it.” They both learned English since coming to the U.S., mainly on their jobs, but they also studied English at the local adult learning center. Because Cristina’s customers are split between 75 percent “Americans” in one part of her business and 90 percent Hispanic in the other, she uses both languages and does so fluently. She learned to speak English in her early teens from her American co-workers in the poultry plants. She mentioned one woman in particular, who has since died. “She helped me very much. Without her, I wouldn’t know what to do. It was really hard at first. I would get in the cafeteria line and the workers were so mean. They would yell ‘what do you want’ and I couldn’t answer. I was so frustrated that I said ‘the hell with it.’ ” To avoid the hassle, she would either bring her lunch to work or if she did not have time to make a lunch, she would go without eating all day.
Like Cristina, Fernando, who said he has been a salesman all of his life, knew very little English when he arrived in Harrisonburg, but he did not let that deter him from taking a job selling cars for an American dealer. He had a friend, who is from his hometown, give him a quick lesson in basic English during lunch hour before he started his job and used ‘body language” to communicate when his very limited English failed. He tells his wife, who studied English for eight years before coming to the U.S., not to be afraid to speak on the telephone or make mistakes in English. He recounts with pride the fact that he sold four cars at a time when he hardly spoke a word of English, by getting someone else on the telephone to explain the necessary details in English to his customers. He added, “I don’t feel that it is right that some people make judgments about other people based on how well they speak the language, since their ability to speak the language says nothing about what they know or who they are underneath.” Roberto, who learned to speak but not to write English on the job, used a similar strategy when, as a new business owner, he was confronted with the need to write checks in English to pay delivery truck drivers, since they would not accept cash because they were afraid of being robbed. To deal with this challenge, he had his American girlfriend write a list of the English words for numbers that he hung on the office wall so that he could consult it whenever he had to write a check. Although he eventually memorized the list, he decided that he really wanted to learn to write English and is working with a college student who tutors him during slow hours in his business. Florencia would also like to learn English in order to be able to communicate better with her “American” vendors, one of whom is trying to learn some Spanish. A teacher at a local college has offered to tutor her in English, but she feels that she does not have time to study. She has the books at home, but when she opens them, she sees that “there are dirty dishes or other things to be done and it is hard to concentrate.”
Similar to the Hispanic population generally, most business owners have come to Harrisonburg within the last 10 years. Only three has been in the area more than 20 years and five for less than five years. With few exceptions, they did not come directly to Harrisonburg from their home country, but spent time in another place or several places in the United States before arriving in the Valley “invited” by relatives, friends or compatriots from their hometowns. Felipe commented that the Hispanic population has grown quickly because “each person brings many.” He noted that one of the oldest Hispanic families in Harrisonburg is from his hometown and they have invited “lots of people.” “Each person brings more people. Others come to find opportunities because there is a lot of work and good pay.” Although they come from many different places in the U.S., the most frequently mentioned places are all well-known immigrant gateways: Los Angeles and San Francisco in California, Miami in Florida and New York City and nearby cities in New Jersey. Their reasons for leaving earlier urban destinations, which focused on the high cost of living, crime, gangs, and poor schools, suggest that “urban flight” now involves immigrants as well as the native-born and that both groups are fleeing farther beyond the suburbs to more rural destinations where, as several people remarked, one can feel safe to walk the streets at night. For example, Antonio, who once drove a taxicab in New York City, said that in the year he decided to leave New York, 61 taxi drivers were murdered and he was afraid for his life. Similarly, Eduardo who drove a taxi at night for five years in New York while working a full-time job in construction, quit after being held up by a man who put a gun to his head. Although Sergio thought New York was “pretty,” he decided to move to Harrisonburg after a visit with a friend because “life is much faster there and it is dangerous. You constantly have to pay attention to your surroundings. That influenced me.” Alicia, who with her four children, lived briefly in Glendale, California and near Dallas, Texas before coming to Harrisonburg, felt that they were unsafe places to raise children. She likes the local area because “there are good schools and not many gangs, so it seemed like an appropriate environment to raise children.” Like Alicia, Barbara came to Harrisonburg from California because she was concerned about “drugs and many gangs” and afraid of her children “taking the wrong path.” She also wanted better schools for her children. “The teachers were good and tried to help, but there were kids sleeping in the street, drugs, guns and people getting killed.” Felipe had several reasons for moving to Harrisonburg rather than returning to California after he went home to Mexico to take over his father’s business. He said that California was too expensive and if he returned there, he would never be able to save enough money to start his own business. When he was in California, he earned $5/hr., which was minimum wage, working in a restaurant, but his brother was earning $8/hr. working in the poultry plant in Harrisonburg, which is also a more economical place to live. According to Felipe, Harrisonburg is also “prettier, quieter, and more tranquil,” as well as affording him the support of his siblings who live close by.
After coming to Harrisonburg, most owners did not become self-employed immediately. Rather, most resided in the local area for at least a few years before starting their businesses. Like many other immigrants locally, many Hispanic business owners, and particularly those from Mexico, have spent some period of time working in the local poultry-processing plants prior to going into business for themselves. The poultry plants figure prominently in the work histories of most of the business owners and/or their families. It is a widely accepted fact among both Hispanics and Valley natives that immigrants have been drawn to Harrisonburg specifically because of the availability of jobs in the “polleras”(poultry processing plants). Although both Sergio and Roberto are now owners of their own businesses, they came to Harrisonburg separately as a result of seeing job announcements in New York, advertising jobs in Virginia that offered paid transportation and housing. They were both brought to Harrisonburg by a temporary staffing agency to work in the poultry plants in 1998. About that experience, Roberto recounted being promised a job in human resources as a replacement for a Spanish-speaking woman who was supposed to be “moving up” in the company, but that is not what happened. Instead, the company put him to work “hanging turkeys.” Laughing, he recalled that he thought that it would be easy. “I didn’t know it would be so hard. It is the hardest job I have had in my life. Imagine lifting a 15-30 pound turkey. I stayed for only two weeks. My hands were swollen. The turkeys did all kinds of stuff on us.” Cristina, who opened her own business in 2001, came to Harrisonburg in 1985 with her mother and brothers, when she was 13 years old. She started working at Wampler the same year along with her mother, cutting chicken on the line. She added that her employer probably knew that she was underage, but “they didn’t care.” There were a lot of underage workers at the plant. She worked at Wampler for eight years, Rocco for three years and Perdue for a year, “always looking for better money, another chance and a better option.” “It was hard work, working with knives and lifting heavy stuff all day.” One of her first goals after opening her own business and, as she said, “one of the greatest things I have done in my life so far, was to get my mom off working in the poultry plants.” Her mother worked in the plants for 18 years. Porfirio and his wife have also worked in all of the local poultry plants. He and his adult son came to Harrisonburg in 1985, having previously worked picking strawberries in California. Since the work lasts only about six months a year, they went to the Employment Office to look for work and saw an announcement that said that the plants in Harrisonburg needed workers and would pay five cents a mile to get to there. Similarly, Teodoro and Ana worked as migrant farm workers, moving from place to place in Florida, Georgia and Tennessee, picking vegetables with the season, before coming to Harrisonburg in 1991. Both worked at Pilgrim’s Pride prior to opening their own business in 2000. Although she was a nurse in Mexico, Isabel, who has lived in Harrisonburg for eight years, worked in one of the poultry plants prior to starting her business in 2002. Her brother, who is her business partner, continues to work on a local farm gathering turkey eggs, while she runs the store. Similarly, Florencia and Raul worked for Perdue before purchasing a pre-existing business from the previous Hispanic owner. While Florencia runs the business on a daily basis, Raul continues to work as an egg gatherer on a local farm, collaborating with her by phone during the week and working in the business on the weekends.
Motives For Going into Business
One hypothesis about why immigrants (as well as women) go into business for themselves is that self-employment is undertaken as a solution to unemployment or employment problems, such as blocked mobility and discrimination. Alicia, who taught preschool in Mexico, would like to open nursery school or resume or career as a teacher here, but she is not interested in taking a job as a school aide, which is all she can do without being recredentialed, because the pay is too low. In the local area where employment for Hispanics is dominated by the poultry industry, the level of job discontent appears to be high, as indicated by responses to a survey question (Hispanic Health Survey 2000) that asked “to what extent have any of the following issues been a problem for you or anyone in your household while living in this community.” Thirty nine percent of the 213 respondents replied that they are working below their educational level. Unfortunately, what this means was left unexplored, but in many conversations about work in the poultry plants, most people, while admitting some positives, such as being able to work many hours and thus earn more money, spoke mainly about the negatives, such as the physically demanding nature of the work. Hired as a “live hanger,” Leopoldo talked about how hard it was to do that kind of work for 10 hours a day. “The first day, they gave me a canvas apron, gloves, a hair net and dust mask. I had to pick up the tom turkeys from the trucks and they were heavy. The first one I picked up shit in my face. One of the other new workers started to vomit. I asked myself, ‘How am I going to survive this torture?’ By the end of the day, my fingers were swollen to twice their normal size.” He demonstrated how he had to stir his coffee using the palm of his hand instead of his fingers because of the pain. He went on to say, “My Mexican pride wouldn’t let me give up. I learned that you shouldn’t look at the birds. It’s a matter of technique. You have to slap the bird against your lap to quiet them down. I survived on guts.”
Relating why they wanted to have their own business, both Antonio and Felipe separately revealed that they decided to go into business for themselves after bad experiences in their jobs in the poultry plants. In Felipe’s case, this happened twice in two different plants. In the first plant he worked on “the line” for one and a half years before he asked for and received a promotion to “mechanical operator.” Although it was not part of his job description, he had to do a lot of extra work and his bosses ignored his suggestions for eliminating waste and making the process more efficient. He said, “I wanted workers not to have to work so hard and for the production lines to work well, but they didn’t pay attention to me.” Finally, he told them that if they did not want to put on extra people, he wanted to return to the line because “there was no other option.” He returned to the line for one month, but started looking for another job. Having heard about a similar position, as “mechanical operator” in another poultry plant, he applied for the job, citing his prior work experience, but was put on the line for three months before he was able to apply for another opening for the same position and got it the second time. After remaining in that position for almost five years, he applied for a better position, as “general mechanic,” but did not get the job. He concluded, “There are some jobs that they give to Hispanics and some jobs they won’t give to Hispanics.” Asked why he thought that, he said it might be due to “distrust.” “They think that Hispanics can’t learn or lack adequate studies in “mecanica” in my own case. Many enter and they don’t have the studies, but they have the practice.” In his own case, Felipe’s supervisor recommended him for the position many times. “I don’t like to use the word discrimination because I can’t prove it, but they don’t want Hispanics to earn more, or many times, Hispanics give a lot on the job, so they eliminate jobs.” He drew a diagram on a paper napkin to illustrate his point. “If there are 10 ‘Americans’ working at one meat tank, they can replace them with five Hispanics who will do the same amount of work as the 10. In other words they have the Hispanics do two times the work. There are few mechanics’ jobs and they are mostly held by ‘Americans.’ If Hispanics were given these jobs, the company could eliminate more jobs. I don’t understand this as discrimination because ‘Americans’ feel they are paid by the hour and do what is required for an hour’s worth of pay. I understand this and feel it is justified. For me, discrimination is when we are made to work more because we are Hispanic, as we were made to do at Shady Brook, even though we were paid by the hour…It’s politics and politics is true everywhere. I decided I didn’t want to stay because I thought I can’t go any higher and if I can’t find another place, I will open my own business.”
Antonio’s work history revealed similar problems working in the poultry plants. Prior to opening his own business, Antonio worked for Perdue, starting on the line and advancing to “jack driver, “line lead” and finally supervisor. He attributed his movement up in the company to the fact that he could speak English. He also did many things to help his bosses, such as “innovating by using the computer to record information (such as attendance records and oven temperatures) rather than putting the information into regular old-fashioned files.” Eventually he felt compelled to leave his job, though he was doing well, as a result of another (“American”) supervisor’s jealousy. Accused of an ethical violation, Antonio felt that he “was stabbed in the back” by a rival because he was rising “too high and too fast.” After leaving, Antonio sued the company and won. Although he could have gotten his job back, he explained, “I didn’t want to go back because I would have had to watch my back.” Instead, he went to work “on the line” for Cargill, but quit after two days because “it was too messy and people had to work too close, standing very close to each other, while using knives. I felt very uncomfortable.” He then went to work for a third poultry plant “as a laborer” on the nightshift working from 10 p.m. to 7 a.m. After three months he moved up to “pushing the blast” and after another six months, he became an “inventory person” with a computer and a heated room. Part of the new position involved transporting jail trustees to and from the plant. With the additional responsibility, he was working 17 hours a day and clearing $800/wk after taxes. “They gave it to me because they felt they could trust me, but I feel that I was used more than trusted.” He missed not being able to spend any time with his children. Finally after becoming very sick with a sinus infection, he quit. However, it was not just the infection but exhaustion from having worked for two years without a vacation that caused his decision. As he explained, “I quit because they wouldn’t let me stop driving the bus.” After that, he decided to do his own business full-time. He commented, “People thought I was crazy for doing it because the business was so small, but I am optimistic and a very hard worker.”
For women who own their own businesses, an important motive is being able to resolve childcare problems, often occasioned by working in the poultry plants. That childcare is a significant problem in the local Hispanic community is also evident in responses to the Hispanic Health Survey which showed that 30 percent of respondents “were not able to get childcare” and 24 percent admitted that there were children in their household who were “at risk” or “not supervised.” Children who are left alone or in the care of slightly older siblings while parents are at work is a commonly acknowledged problem. At least some women have solved the childcare problem by becoming self-employed. For example, Concha worked at George’s Food (a poultry plant) for seven months, but had to leave because the “muchacha” who took care of Concha’s two children could no longer baby sit for her. She told Concha on a Saturday night, so Concha started looking for someone else right away, but missed work on Monday because she could not find anyone. The plant allows only three days off without permission before the worker is fired, so when Concha missed the three days, she had to leave. She, like many other immigrants, also mentioned other negative experiences associated with working in the poultry plants. “They make the Hispanics work faster while the Americans are allowed to rest. They treat us like we are dumb and work us like burros. We are capable of learning. We just haven’t had the chance.” Barbara’s path into business was similar to Concha’s. She also worked in a poultry plant for six months, but wanted her own business because of her children. As she explained, “The number one reason was for my children. I have three children, ages 14, 13 and 8, and they are a lot of work.” When she worked for others, Barbara worried that she did not have time for them, “to go to school, to check on how they are doing and to help them with their homework.” She spent eight hours a day working and “had no time to spend with them.” It was also difficult to get them to and from school and she did not like leaving them home alone. Since starting her own business, she takes them to school in the morning before opening the store and when school is over, she closes the store in order to pick them up at school and takes them home for something to eat and a little rest, before returning with them to the store. They do their homework in the office and the family leaves together for home when they close. She feels that it is “very ‘bonito’ (beautiful) to be together.” “It is very easy to forget the children when you are working, but then you have no communication with them. They grow up very fast. That is the principal reason for starting the business; it was to have time for my children.” Alicia, who has four children, also talked about the “flexibility” of having her own business. If one of her children gets sick, she simply closes the shop to stay home with them, but if she worked for someone else, she could not do that. She also likes that she can attend her children’s school events.
Whether or not childcare figured prominently in owners’ reasons for starting their own business, it is clear that being one’s own boss provides many parents with the flexibility to work and care for their children at the same time. One of the most striking features of Hispanic businesses in Harrisonburg is the way in which the presence of the owners’ children is an accepted part of doing business. Most of the women who operate a business and have young children take them along to work. Even some of the men combine childcare duties with conducting business. For example, until recently, Salvador and his sister operated adjoining businesses, sharing the childcare of their children, who moved easily back and forth between the two stores. However, Salvador, who is a single father, had to close his business because of the difficulty of running a business, caring for his child and continuing to work at a full-time job. For couples, bringing their children to work is not only a solution to the challenges of childcare, but also appears to be an extension of the way many couples handle childcare by working different shifts in the poultry plants. By working on different shifts, as people frequently pointed out, one parent can be home with the children while the other one is at work.
Childcare aside, other owners also said that their reason for wanting to own their own business was so that neither they nor their children would have to work in the poultry plants. As Cristina explained, “I wanted to be my own boss so I don’t get nobody in my ear hollering. When you work for someone, you wake up in the morning and don’t want to go to work. It’s different when you are doing something for yourself. In the poultry plant, you work 50 to 60 hours a week, and get a paycheck and pain in your hands and legs. Here I can learn how to communicate with different people. In the poultry plant, you can’t even talk. They expect you to work like robots. It is knowing I could do it. I could learn how to communicate with people. I learn from the ABC (state liquor licensing board) what’s legal. I learn from the Health Department to keep food at a certain temperature. There is a lot to learn if you want to learn. These are the rules and regulations of business.” Like Cristina, almost every other owner, when asked why they wanted to own their own business, replied the same way– for “betterment” (superacion) or “to better myself” (por superar) or in order “to be my own boss” or “ to work for myself or “for the chance to be somebody.” As Roberto said, “It is ‘bonito’ (beautiful) to be your own boss and not have any problems with other people. If you are your own boss, there is no one pressuring or mistreating you.”
Previous Business Experience
About two-thirds of the owners had not owned a formal business prior to their current one, while the other third had previously owned businesses either in their home country or in the U.S. Among those with previous business experience, Vicente stands out for the scope of his entrepreneurship. Having started nine businesses in the U.S., five of which he still owns, Vicente had extensive business experience in Mexico prior to coming to the U.S. specifically to start a business. He opened his first business, a tailor shop, at age 16 in Mexico. Because the Mexican government told him minors could not own a business, he had to have a friend, who was over 18, sign the papers for him. Vicente owned that business for 25 years. In addition to the tailor shop, he has owned four other businesses in Mexico and in 2004 was traveling to Mexico frequently as he prepared to launch another, new business there. Although she does not have Vicente’s years of business experience, Susana also started her first business while in her teens in El Salvador. She bought the business, a dry goods and shoe store, from her brother and sold it back to him when she decided to come to the U.S. to further her education. Although many business owners have one or two relatives who also own their own businesses, Susana comes from an unusually entrepreneurial family. Her father and an uncle own restaurants in New York, while one of her brothers and another uncle own truck and car dealerships and a second brother has recently opened his own business in partnership with Susana. Similarly, Alicia owned a beauty salon in Mexico as did her mother, and after coming to the U.S., she worked as a hairdresser for about a year before opening her own salon.
Others, who did not own their own business in their home country, nevertheless gained business experience working in their parents’ business before coming to the U.S. For example, Tomas worked in his parents’dry goods store (merceria) from the time he was four years old. When he was seven, he wanted to work in groceries, but his father did not want to carry them because they spoil. In Mexico, he explained, “children begin working when they are very young, especially if they are from a humble family.” Similarly, Roberto had his first job at age seven, helping his aunt package rice and beans. Although he was not paid for the work, she gave him food. When he was 13, she started paying him for his work and he used the money to pay for his food and school expenses. At 17, after finishing secondary school, he worked as a conductor on a bus and managed to buy a house. However, feeling that he would not be able to do anything in El Salvador with just a secondary school education, he accepted his father’s invitation to join him in the U.S and less than ten years later, at age 26, he owns two restaurants in the Harrisonburg area. Antonio, who owns an auto body and detailing business, began working after school in his father’s auto repair shop in the Dominican Republic when he was 11 years old. After his father sold his business, he continued doing the same work for someone else, along with his little brother, before coming to the U.S. when he was 15.
For those who came to the U.S. without the experience of having worked in a family business or having owned their own business, very few individuals started their business without gaining some related experience in the U.S. Carlos is one of only a couple of business owners who said they started their business with no prior experience. He said he had never owned or worked in a store before opening his own, but his ‘American’ girlfriend had worked in a convenience store and “had more ideas to start.” “She did a lot of the things and made decisions for the store.” More typically, budding entrepreneurs gained experience either by working as an employee in a similar business or by operating their own “micro enterprise” in the informal economy. Whichever strategy they employed (and some people used both), they often did so on a part-time basis while continuing to work a full-time job. Although Carlos had no experience running a store, he had previously operated a business in addition to working full-time in the poultry plant. In fact, Carlos’ “feather business” was probably the first Hispanic-owned business in Harrisonburg and provided employment for some of the earliest members of the community.
Recognized as one of the founding fathers of the community, Carlos arrived in Harrisonburg in 1971 and went to work for Wampler. After two years at the plant, he started his own business involving turkey and duck feathers. He had a contract to buy the feathers from the poultry processing plants, dry them in a warehouse and transport them weekly to Chicago and New York. There he sold them to middlemen who shipped the feathers overseas where they were dyed or otherwise processed for use as filling for pillows and jackets. Carlos learned the business from his brother and sister-in-law who operated the same kind of business in another state. He kept his job at the plant while operating the feather business because he needed the money to pay the company for the feathers, having started with $100 that he borrowed from an ‘American’ woman. As he noted, “At first the poultry plant didn’t trust me and wanted to be paid for the feathers every week.” By paying them on time every week, he established their trust and eventually they “didn’t want to be bothered with weekly payments anymore,” so he paid them monthly.
Other owners started on the path to business ownership by rejecting work in the poultry plants. When Sergio came to Harrisonburg, he worked in a poultry processing plant for three months before deciding that that he could earn as much “doing what I like to do as working in the poultry plants for the same amount of hours.” Like other men who have started businesses in some aspect of the auto industry, Sergio explained that he loves cars. After attending ESL classes to learn English, he got a job as a sales manager in an auto parts store. “Each day I gained more experience and relationships with people and this way I was able to start my own business.” He added that he learned the most about the business from an “American” used car dealer, who he met through his job. Because 65-70 percent of the man’s customers were Hispanic and he did not speak Spanish, Sergio began working with him on his days off and other free time. He did this for about two years before starting his own used car business. Antonio took a similar trajectory. While working in the poultry plant, he began a second job, part time, without pay in a fellow countryman’s car repair business. Since the owner did not speak English, Antonio purchased auto parts for him, did his accounts and translated for him. Eventually “the favor came back to me.” As he explained, the owner gave him $500 and offered him some space at his location for selling used cars. Antonio kept the business for about six months, but closed it because “there weren’t enough Hispanics in town at that time” so he had very little business. In a similar way, Eduardo learned about restaurants by working in them. Except for six months cutting strawberries in California, when he first came to the United States, Eduardo has spent most of his adult life working in restaurants. After working for six years in a series of Mexican restaurants in different cities in Virginia and the Carolinas, Eduardo came to Harrisonburg with the specific purpose of opening a restaurant, which he did in partnership with his brother over 12 years ago. They now own two restaurants in town. Similarly, Roberto, who at age 26 owns two restaurants, learned how to operate a restaurant by working in one. He began working in the restaurant he now owns after suffering a serious accident on the job in a poultry plant. He began working for the previous owner of one of his restaurants as a cook and quickly worked his way up to manager. He commented, “I’m not very intelligent, but it took me only two months to learn how to cook.” When his boss told him he wanted to sell the business, Roberto took on a second job to come up with the down payment. Working seven days a week in the restaurant, he worked at his second job five days a week for over a year and continued to work the second job even after buying the restaurant in order to pay off his debts.
While there may be some generic skills that are necessary to successfully manage any type of business, different types of business, each with their unique subculture, require different kinds of specialized skills and knowledge that are often acquired through some form of formal or informal apprenticeship. Restaurant and auto sales or repair are two types of business that people most often learn by working for someone else already in the business. In contrast, individuals who started other types of business, particularly in retail sales, often gained their initial experience by working for themselves, operating similar, but smaller-scale enterprises in the informal economy. For example, before opening her store, Concha sold clothes door to door. She started by going to New York to buy the clothes and although it was difficult at first and she did not sell anything, eventually she began to see that people liked the clothes and bought them. That is how she got the idea of opening a clothing store, though at first she did not have the money to open a store or even to buy clothing. When Teodoro decided that he wanted to go into business for himself, he took two weeks’ vacation from his job in the poultry plant to work in a relative’s bakery in Texas in order to learn how to bake. Back in Harrisonburg, he practiced the techniques he had learned and began to sell baked goods in the trailer parks and later through an established store where he split the rent with the owner before opening his own bakery. Having moved to Harrisonburg with the idea of getting a job in a poultry plant, Tomas found himself waiting for a position to open up and while he waited, he began bringing ethnic foods from New Jersey to sell in the Hispanic neighborhoods every week. His success in that venture eventually led him to open his first store. He has since expanded to several locations. Even a few restaurant owners have started in business through informal enterprises. Having operated a food stand on the weekends in Mexico before coming to the U.S., Florencia and Raul resumed a similar business after coming to Harrisonburg. While working in the poultry plants, they sold tacos and “elotes” (corn on the cob) at soccer games for two years, establishing a reputation and clientele, before opening their restaurant. In a similar way, Braulio and his wife operated an informal restaurant in a trailer park before moving their business to a rented storefront. The process of starting informally, as a way of testing the waters, before shifting into the formal economy, can also operate in reverse. After closing her store, Caridad returned to selling clothing door-to-door and through yard sales.
The Start Up
Once the decision to start a business was made, the type of business was often dictated by past experience working in a similar business. The type of business also determined, to some extent, the amount of capital invested. For example, stocking an inventory of automobiles is considerably more expensive than stocking an inventory of groceries or compact discs. However, whatever the basic requirements of doing business (e.g. purchasing a computer or special kitchen equipment), owners tended to scale the scope of their businesses up or down to fit the amount of money they had available to invest. Owners of restaurants, for example, reported that they invested as little as $8,000 or as much as a $100,000 to start, with most investing amounts between $35,000 and $70,000. Similarly, owners of retail stores, or “tiendas latinas” also invested widely varying amounts of start up capital, from a low of $2,000 to a high of $40,000. In contrast, owners of used car dealerships reported a much narrower range of investment, $30,000-60,000. This is probably due to a state requirement, as Diego explained, that licensed dealers invest a minimum of $30,000 (presumably for a security bond).
The sources of start up capital also varied. Only four people secured a bank or small business loan and almost no one else attempted to get one, since they felt that they would not qualify. Raul and Forencia were able to get a bank loan through the help of Raul’s boss who is ‘American.’ Similarly, Fermin had the help of a couple of ‘American’ realtors in getting his loan. In an unusual case, Vicente brought money with him from Mexico to invest after being invited to become partners with a friend in a new business. No one else mentioned either coming to the U.S. specifically to start a business or bringing money from his or her home country for that purpose. Many, in fact, commented that they came to the U.S. specifically in order to earn money. Felipe, for example, said that he came to the U.S. originally to earn money to help his father buy some land in Mexico and he made subsequent trips to earn money to go to school and to start his own business in Mexico. To start their businesses here, most owners used their own savings, usually as one of the principal sources, and in some cases, as their only source of capital. Many of these same owners also got loans from their parents or siblings or far less frequently, from friends to augment their savings. For example, Braulio and Marisa were loaned $8,000 by Marisa’s brother to open their restaurant. Two of the women who are sole proprietors said that they received gifts of money from their mothers. Another source of funding, used by several owners, was to go into partnership, usually with a sibling, which enabled them to divide the costs among two or more owners. Concha, who reported investing about $3,000 to open a clothing business, got most of the money from her savings and the rest came from an $850 loan from her brother. In lieu of repayment, Concha’s brother decided to become her partner. Some individuals also used credit cards to pay for some of their start up costs, while others raised capital by selling their house and/ or car. In about a half dozen cases involving the purchase of a pre-existing business, special financial arrangements were negotiated between the buyer and seller. The most common arrangement was for the seller to lend money to the buyer who then repaid it in installments. Roberto, for example, got a loan from the seller for $100,000. The terms were five years at 10 percent interest. Roberto said that the interest was high, but he could not get a bank loan because he had no credit history. In a variation on this arrangement, Leonardo bought into a pre-existing partnership in the restaurant in which he was employed, paying for his share through monthly payments to the other two owners. No one mentioned using a “rosca” or “tanda” (rotating credit association) to help finance their business venture, despite the fact that a few people mentioned that “tandas” are used in the local community for purposes of personal consumption. Although Asian immigrants have a history of using rotating credit associations for financing entrepreneurial ventures in the U.S. (Light 1972), they do not appear to be used by Hispanics for that purpose. Research by Kurtz and Showman (1978) and Velez-Ibanez (1983) has shown that “tandas” are an urban phenomenon, typically used in Mexico and by Mexicans in the U.S. to raise money to repay a debt or for large consumer purchases. Velez-Ibanez discovered that people often participate in “tandas” as a way of saving in order to open a savings account or to fulfill ritual obligations (i.e. to buy gifts for Christmas, baptisms, marriages and birthdays). Only seven percent of Velez-Ibanez’ informants said that they participate in “tandas” to invest in “income-producing activities” and small business start-ups were not even mentioned (Velez-Ibanez 1983:62).
Instead of trying to accumulate large sums of money, Latinos in Harrisonburg with little initial capital to invest tended to use the alternate strategy of “starting small” and “growing slowly little by little.” One common way of “starting small” was to use only a portion of a rented space and to expand with increasing business. When Susana opened her beauty salon, she recalled that she did not even have a cash register. Starting with only two chairs, she now has five. When Candido opened his store, he closed off the entire back area and used only the front, which was quite small, because he did not have the money to buy enough merchandise or fixtures to fill the entire space. He then added features, like the refrigerator cases that cover the back wall, little by little. For others, “starting small,” has involved renting or sharing space with other businesses. For example, Roberto and his partner started their auto repair business in a small space that they rented within a large garage that housed another repair business. Unfortunately, in their case, they discovered, after paying $600/mo. for months to the other occupant of the garage, that he was just another tenant rather than the owner and they were nearly evicted when the real owner showed up one day, demanding back payment of rent.
Having an open credit line with suppliers is another way that owners deal with low cash flow, but new businesses are usually not able to purchase goods or supplies on credit. Speaking about the challenges of owning his own business, Sergio said that he was fortunate to have already established relationships from his previous work that allowed him to have an “open credit line” when he went into business for himself. Similarly, after eight years in business, Tomas has established good relationships with his suppliers. They will let him pay later if necessary, since he does not have a lot of capital and works “day to day” paying his bills. In contrast, Isabel, who owns a clothing store, explained that after a year in business, she still has to pay with a money order for merchandise that she receives by UPS since none of her suppliers have extended her credit.
Asked about the challenges of starting and running a business, Fernando, who is a business owner, expressed the opinion that “many Hispanic businesses fail because people have a skill like cooking or sewing, but don’t have any knowledge about running a business.” Since work histories suggest that most people have had some related business experience, it may be more accurate to say that they lack knowledge of “best practices” or the most successful business strategies that experts tend to advise, such as having a formal business plan. Only three owners, two of whom sought the assistance of the local small business development center, mentioned having a written business plan when they started. What owners most frequently mentioned as their greatest challenges were, in fact, lack of capital and lack of English. Taken together, these two problems account for most of the other problems people faced. A limited knowledge of English no doubt complicates the process of obtaining the various permits and licenses required to operate a business, but most people were able to negotiate the local system with minimal difficulty. A number of people even remarked that the process of obtaining permits from the city was easy and that the authorities and inspectors involved were helpful. Most owners also had help and advice from friends, family or fellow business owners who were more fluent in English and more familiar with the process. On the other hand, state licensing procedures tended to be much more difficult, involving written examinations in English, as well as other requirements depending on the license. For example, auto dealers have to post a security bond and cosmetologists (at least those moving from other states) are required to provide local character references. Obtaining a state liquor license in Virginia, a state with a long history of close regulation of alcohol sales, also involves a process that would be difficult to negotiate even for individuals fluent in English. When Roberto applied for a liquor license, which cost $250, he ended up paying the fee three times and spending three months trying to comply with the complicated procedure. It involved filing an application, having it notarized, obtaining a money order and placing an orange sign in the restaurant window and a notice in the newspaper all on the same day. The first two times he filed the application, he missed one of the other steps. Finally, one of his “American vendors” helped him get through the process.
The language barrier also complicates getting information and help. Roberto had so many problems when he first opened his business that he said, “After six months I didn’t want the restaurant anymore because it was a big headache.” He described how all of the coolers stopped working one after another in several days and he did not know who to call for repairs. Then the floor drain got plugged and he did not know how to get that repaired either. Other business owners, who are unfamiliar with bookkeeping and accounting procedures, also face language barriers in finding out “what is required by the laws, since there are no Spanish-speaking accountants in the local area. Gertrudis, who is self-employed as a notary and interpreter, finds herself helping people with all sorts of financial issues, including keeping accounts and preparing taxes. Because of her business, many people also bring her letters to read for them, which she does without charge. People show up at her door constantly, even at night, with a sheath of letters in hand. She admits that at times, they take her time away from clients who are paying her for her work, but she does not know how to put limits on the time she spends helping without charge since she realizes that the community has many needs. As previously mentioned, this is a common problem expressed by other people with bilingual skills. Individuals who are in any way involved in the provision of services, whether self-employed or employed by someone else, often find that they are overwhelmed by requests for other kinds of assistance, particularly associated with language.
Most other challenges reported by owners appear to be due to insufficient capitalization. For example, owners often had difficulty finding a location that they could afford. While rent for commercial space in the Valley may be less expensive than in larger metropolitan areas, it is nevertheless a significant obstacle as people are starting out. Renata and her husband were interested in a particular location until learning that the landlord wanted them to sign a “lease bond,” which, according to Renata, means that “if you don’t pay your rent, the insurance company comes after you.” Unable to afford a “good location,” some businesses seem almost doomed to fail. Concha recounted how her mother opened a restaurant that she was forced to close after four months, unable to finish the lease, because “people didn’t come.” She felt that a large part of the problem was the location, which had no parking nearby. Another Hispanic-owned restaurant in the same location failed for the same reason. Even in less trafficked areas, rental costs can be too great a barrier for some potential entrepreneurs. For example, Ernesto, who came to Harrisonburg with many years of experience in the grocery business in another state, considered opening a supermarket until he discovered that the rent on the 25,000 sq ft location he had in mind would cost him about $100,000/month (at $3.50/ sq. ft.). Reasoning that “this isn’t New York,” he felt a more realistic rent would have been “$1/sq. ft. at least to start.”
Lacking capital, many owners said that another related challenge was the expense, as well as the difficulties, associated with preparing their rented space for business. People typically did most of the work themselves in order to save money. For example, the space that Renata and her husband eventually leased, had never been a restaurant and did not have a kitchen, so much work was needed to get the space into shape. After being given a quote of $90,000 for the renovations, which was more than they could afford, they decided to act as their own general contractors and they also did a great deal of the work themselves, with the help of their in-laws. Similarly, the place that Cristina rented had been empty for seven years and “it was very dirty.” She commented about the cleanup, “Everything was a challenge. I had my husband and he was very supportive. He believed in me. My mother and brother helped me a lot. My husband’s brothers helped me a lot, too. We did most of the work ourselves. We got someone to do the floors and some of the painting. But we took down walls and put up walls and took out the old carpeting and replaced the kitchen equipment.” Catarina and David also talked about how what they thought “were small details, became such big details.” Before opening their restaurant, they also did most of the remodeling themselves, including electrical and plumbing work, but did not know that they needed to have permits and inspection of the work, so that cost them time and a great deal of money. It set the opening of the restaurant back by three months during which time they were paying $4,000/mo.in rent. They also had difficulty finding anyone who was willing to redo the work so that it would pass inspection. Likewise, one of the hardest things that Susana faced when she opened was that the landlord “didn’t provide anything but the four walls.” “I wish I had taken photos of the place so people could see what a deteriorated shape it was in.” She had no hot water or heat until her husband put in the necessary plumbing. Braulio and Marisa had a similar problem with their landlord who was very slow about installing gas for the kitchen in their restaurant. Only one person mentioned having a positive experience with his landlord. When Tomas decided to expand his business a few years ago, he did not have to invest any money in the process. His “American” landlord obtained the loan for the expansion, which tripled the space occupied by the store. He said that he actually would have liked to expand the store even more, but the owner told him that was as much as he was willing to do. Commenting “the owner treats me well,” Tomas concluded that he has been lucky in his dealings with people.
Once businesses were open, the greatest challenge owners said they faced was finding customers and meeting expenses. Like many other owners, Isabel said she did not know if any customers would come. She remarked, “It was difficult because people didn’t know us and didn’t know how to find the store. We have to pay for the merchandise and other expenses, like rent and electricity, whether or not we have customers.” Likewise, Alfredo was concerned about whether customers would come and if he would be able to gain their “confianza” (trust). Recalling that he felt very nervous about the opening, he said he had only $20 worth of sales the first day. Businesses that grew out of informal enterprises sometimes had the advantage of already having an established clientele. For example, Florencia felt sure that her restaurant would do well because people told her and her husband that they liked the food when they were selling food at the soccer games and asked when they would open a restaurant. Tomas also started his business “without really trying” by building his client base before he opened his first store. His clients knew him “from the street” when he was selling goods informally. He also expressed the opinion that “the most important thing, isn’t starting, it’s maintaining the business. It’s like sports. Getting there isn’t hard. It’s staying in the game that’s hard.” On the other hand, several owners mentioned businesses that they previously owned or knew of that had failed because they were unable to build a customer base. Aware of the value of advertising, most of the businesses have placed ads in the local Spanish language newspaper, which has been in existence since 2001, at one time or another and a few restaurants that aim to attract American customers advertise in the local English language newspaper, college newspaper or through advertising/coupon packets. But the expense of advertising limits its use. For example, Concha thought of putting an ad in the Spanish-language newspaper. Her husband even called the newspaper to ask the price, but because an ad cost $100 a week, they did not do it. “It wasn’t because we didn’t want to do it, but that it cost too much.” Some businesses use less expensive, but probably less effective means of advertising, such as distributing handbills and leaving stacks of business cards in other Hispanic-owned businesses, while still others simply hope to lure customers by word-of-mouth and use no other form of advertising.
Under capitalization not only makes it difficult to “grow” one’s business, but also leads to other problems. Susana said that a common mistake that she has observed among some local small businesses is that the owners use the money earned by their business for living expenses rather than to pay for business expenses, such as rent and utilities.“This is a mistake that people often make in starting a business. A couple might think that they can both stop working at their job and just run the business. But it is better for one of them to continue working to ensure an income.” She feels that not having that support would make it especially hard for a single mother to start her own business. In her own case, her husband, who works for a poultry plant, takes care of the household expenses, while the money she earns in the business is used to pay for business expenses. Susana’s strategy is one used by most other business owners. In some cases, one spouse operates the business while the other spouse continues to work elsewhere, while in other cases, siblings either do the same or continue working their regular jobs and take turns working in the store during their off hours. For example, Isabel and her brother are partners in their store, but Isabel and her sister-in-law operate the store while their husbands are employed elsewhere. In order to keep their store open 12 hours a day, seven days a week, Jaime, his sister and his fiancé split their hours, each taking a four-hour shift and arranging their turns to accommodate their schedules at their regular jobs. For married couples, these arrangements not only provide a guaranteed income to pay for living expenses while starting their business, but, as Susana pointed out, also assure that the family will have access to health insurance if they choose to take advantage of it, since all of the poultry plants offer health benefits.
In addition to the challenges posed by a lack of money and fluency in English, Hispanic-owned businesses face the additional challenge of competition from co-ethnic, other ethnic and mainstream businesses. In large metropolitan centers, competition is usually intraethnically focused since immigrant entrepreneurs tend to concentrate in a narrow range of businesses and locate in the same ethnic or inner city neighborhoods that are not serviced by mainstream chain stores (Yoon 1991). In Harrisonburg, Hispanic entrepreneurs also concentrate in a few lines of business, creating co-ethnic competition. At a meeting to consider starting a Hispanic Chamber of Commerce, one attendee suggested that instead of competing with each other, Hispanic business-owners should unite. He offered the opinion that all of the small grocery stores should get together and open a big supermarket together in which each would own shares. Graciela compared the situation in Harrisonburg to New Jersey where she lived previously. She observed that the Chinese in New Jersey “helped each other start businesses,” but here “Hispanics don’t help each other.” Instead, “they see the other person as an enemy, as competition, as a rival who will take their customers. They don’t ask others what they can do to help them.” One of the problems is that they all tend to carry the same products so that establishing a clientele becomes more difficult. However, Graciela did not believe that customers patronize particular stores based on loyalty to owners who are of the same religion or nationality.
In addition to intraethnic competition, local Hispanic business owners, and especially retailers, must also compete with national chain stores that may constitute a more serious competitive threat than other Hispanic businesses. Owners frequently complained about “big box,” stores, such as Wal-Mart and Costco that are able to offer very low prices because of high volume. Martin said that he was in one of the “tiendas hispanas” recently and noticed that some of the food items were priced very low. Having worked for Goya (a nationally-known Hispanic brand) for years, he is familiar with the prices and the store’s mark up was only eight percent. If he were selling these products, he said he would have a mark up of 35-40 percent. However, his observation does not take into consideration the competition that the local “tiendas” face. Speaking about pricing, Louisa, who “helps out” in her brother’s “tienda,” said that in working with vendors, she tries to get the best price on products so that she will not have to charge customers more. She is aware that if the prices are higher than other “tiendas,” customers “will shop where they can get the lower price.” Although selling goods at lower prices may result in better customer retention, it also results in lower profits. In order to make a profit, the “tiendas” usually have to price goods higher than large corporate competitors, but when they do so, customers complain about the higher prices and may not return. Tomas feels that the giant retailers like Wal-Mart and Costco are hurting small businesses like his since “we can’t compete with Wal-Mart.” He knows this because sometimes when he needs something at Wal-Mart, he sees his customers there. “They took away many of my customers given the size of my business.” He added that his customers compare prices and “go with the lower price, but what they don’t realize is that Wal-Mart marks one product very low as a “gancho” (hook) to draw people in and their other prices are not low. They are a big consortium and have resources that small businesses don’t have.” When he is in Mexico, he likes to visit the Wal-Mart and talk with the managers. In his opinion, Wal-Mart opened these stores in order to study the “Latin market” in order to be able to capture it in the U.S. For example, they studied what cuts of meat Latinos prefer and applied it in their stores in the U.S. Realizing that he has to find other ways to compete, he focuses on products that Wal-Mart does not carry.
Wal-Mart was also blamed for the failure of two clothing stores. In Susana’s opinion, the stores failed because “there was no market for their products.” Both sold merchandise that people could buy cheaper in places like Wal-Mart. Although Susana feels that Wal-Mart sells clothing of inferior quality compared to the two stores, potential customers “didn’t know or care about such differences, since they buy used clothes.” Concha also spoke of the competition she faces from large chain stores like J.C. Penny’s. Noting somewhat wistfully that even Penny’s must have begun small, Concha asked rhetorically, “How can I compete with Penny’s? Penny’s is so large and can afford to selling clothing on sale for prices that are almost like giving them away. There is no way I can afford to sell clothes for so little.” As a way of compensating for her higher prices, she has occasionally allowed customers to pay her later and, to date at least, no one has defaulted.
Given the large number of auto dealers in Harrisonburg, it is not surprising that auto sales is also a very competitive enterprise. Sergio, who opened his business in 2000 after working with a dealer for two years, commented that in order to succeed, “you have to know your competition.” He realized that “there was no service in Spanish and that was an advantage for me. Our community has the need to acquire vehicles, but they have trouble because they don’t have a credit plan to help them. I did an experiment with a friend. We went to many banks and tried to get credit and they all said ‘no.’ It is difficult to establish credit because they are immigrants and have just come and don’t have a permanent address, so the banks don’t feel that they are safe.” “And it has happened that people get credit and then leave and the money they owe is lost.” Sergio competes by offering customers his own financing and admits that he has lost some money by offering credit, but he shrugs this off by saying that “some come, some go.” He also believes that the problem is getting better. In the past people “didn’t understand how to use credit. “They would get a credit card and use it until it was burned up. But they are learning and becoming more conscientious and I have also learned that it is very important to be patient.” He has learned a lot about people and about making sure that they understand before he extends credit to them. “I always try to help and I want them to be 100 percent satisfied and to have them trust me, so I explain what is happening and it has worked. Some have bought cars from other dealers and had their cars repossessed and their credit cancelled, but here it ends well.”
Restaurant owners also spoke about the challenges of competition. When they bought their restaurant eight years ago, Lucrecia and her husband faced little competition, but that has changed as more and more restaurants continue to open. They are concerned about increasing competition and particularly what will happen if a popular, national chain offering the same type of food as their restaurant comes to town. They observed that several locally owned specialty stores have been put out of business by the recent opening of a new shopping center with national chain stores that offer similar merchandise. Given the competition from the national chains, they worry about the future of small businesses in general. On the other hand, Vicente spoke confidently about his ability to weather the competition from other Hispanic restaurants. Speaking of one of his competitors in the restaurant business, he said that he knew when he came to town with the intention of opening a restaurant, the other owner from the same state in Mexico “didn’t want another Mexican restaurant in town because he didn’t want any competition.” But his own attitude is that “competition is good and nothing to fear if you have something good to offer.” His motto, which hangs on his office wall, is “La competencia es buena, pero somos mejores” (Competition is good, but we are better). He went on to say that in business, “it is good to have patience and perseverance, especially perseverance. Success is mental. It is a positive attitude. Some people have a negative attitude. But why bother to start a business with such an attitude?”
Another challenge facing most owners who are parents is balancing the demands of running a business and raising a family, since they tend to work very long hours, yet say that family is the most important thing in their lives. Alicia points out that she works more hours working for herself than if she worked for someone else, and that there are “no vacations or time off or fixed hours.” Her business is open seven days a week and some Saturdays are so busy that she remains open from 10 in the morning until 1 a.m. She estimates that she regularly works 50 to 60 hours a week. Fermin and his wife work from 6 am to 7 p.m. seven days a week, but he feels that it is worth it to be his own boss even if it is very demanding. Although Marisa also feels that it is worth having her own business, she concedes that ‘it isn’t easy” because she has to be in the business all day from early in the morning until nighttime. She cannot leave and have a good time whenever she wants to because “if you aren’t present to take care of the business it will go down.” In addition, it is difficult having to keep her three year old cooped up inside the business with her and her husband all day. “We don’t have much time to take him places, although we try when we can.” Although his aunts wanted to take care of him, he wouldn’t go because he is very attached to them. Speaking about what it is like to own her own business, Susana, who has three children, said, “It is a lot of work and sacrifice. You have to think of the future. It is a lot of responsibility. It means some sacrifice to the family, to your children. I work 12 hours a day although my children need me and I have to sacrifice them. Imagine how hard it is to have to decide between your children’s needs and work. My son asks me why I have to work on Sunday. He says that since I am the owner, I should just lock up the shop on Sunday and stay home with them. I tell him that it is because I am the owner, I am responsible for keeping the shop open and there are lots of customers on Sunday. You have to take advantage of today because you don’t know what tomorrow will bring. I feel that it is a very big responsibility to be an owner. I feel bad when I have a lot of customers and they have to wait a long time for me to wait on them. Fortunately, my customers are patient and will wait a long time. Some men watch an entire soccer game while waiting, but I don’t like to make them wait that long.” While talking about the challenge of balancing family and business responsibilities, Susana had to excuse herself to call her sister-in-law to ask her if she would pick up her children from an after-school program. Cristina, who recently had a baby, said that she expected that it would be harder to balance family and her business with the new baby, but she worked long hours with her older son who is now five. She has tried to make time for him, by taking him to lunch for example, but adds, “I know I miss a lot. My kids and family are the most important thing, but if I don’t work hard now when I am young, I won’t be able to do what I want to do. I will enjoy my kids later. I have only eight years since I want to retire when I am 40.”
Other owners delay having additional children, or in one case, even their first child, because of the demands of running their business. Roberto, who pays his mother-in-law to take care of his baby, explains that he and his wife are “waiting to have more kids because it is hard to do something with babies.” Long hours also create conflict between spouses. In the one and a half years since Antonio started his auto business, it has grown to the point that he is short of help and has more work than he and his three employees can comfortably complete. He has so much work that he often has to work until one in the morning and on weekends to make sure that the work gets done on time. He says that he does not mind the long hours because he has always worked two jobs, but he is torn between wanting to satisfy his customers and spending time with his family. Although he feels that it is very important to make sure that he delivers the work on time at this early stage in his business, Antonio also worries that his business is “bringing down my family.” He explained that his wife is unhappy that he is working seven days a week and would like him to give up the business and go back to work in the poultry plants where she works, since that would mean that he would have a regular schedule and be able to spend more time with her and their children. He feels caught between his responsibility to his family and to his customers, noting how the latter often come in to check on the progress of work being done on their cars. He likes to be able to show them progress even if the work is not complete. In Antonio’s view, part of the problem is cultural because, as he commented, “Unlike ‘Americans,’ Hispanics are very tight with their families. We never send our old people away to a home and wives in my country don’t work outside the home. The husband goes to work and comes home and spends time with the family. I grew up here and my wife didn’t. She wants me to be like her.”
Plans for the Future
Despite the challenges, most owners expressed a sense of pride in what they have accomplished thus far, emphasizing that it requires a great deal of hard work and optimism, while rejecting what they feel is a common perception in the community that owning one’s own business automatically translates into wealth. In fact, only a few owners even mentioned money as a motive for going into business for themselves, all of them adding that it was not their only motivation. For example, Susana explained that although owning her own salon is “a way of making money, it is only part of the reason.” She said she likes making people look good and really enjoys the contact that she has with people. Being able to help the community was also a large part of her motivation. Before opening her own business, she worked at a salon in the mall that charged men $26 for a haircut and “ ‘hispanos’ have to work three hours to pay for a haircut.” Outside the mall, the cost would not have to be so high and she could charge half. She also observed that when she opened her business, there were no Hispanic-owned salons in Harrisonburg. About her business, Concha said, “People without money lots of times think when they see a business that the owner has a lot of money. I’m not from a very elevated level. They should know the effort that one makes, the “valor” (courage) you are trying to put into it. Some people study business in school, but I didn’t. But it is very ‘bonito’ (beautiful) to make the effort. To work for a goal is the most satisfying thing I can do or for people who were not born here to do, because of the language and for the stability. Some say it is not our country, but we can make it ours. Some people think we are less, but we are human. Like the song lyric says, ‘if I fall down, I will not stay down, but pick myself up’.”Felipe agrees that owning one’s own business is not easy and that “people think that because you have a business and aren’t working in the ‘plants,’ you have money.” Others referred to having their own business as the fulfillment of their American dream and the importance of believing in that dream. As Eduardo commented, “If I didn’t think it was going to work, I would never have done it. Similarly, Fernando, who started the first Spanish-language newspaper in the area, put it this way, “I always wanted to have my own business and that is what I have done all of my life, worked for myself. And the U.S. is the best place in the world to own your own business. If you can’t do it here, where in the world can you do it? Have you heard the expression ‘all that glitters is not gold’? I believe that all that glitters may be gold, so one needs to seize the opportunity.” Before starting his own business, Roberto told his co-workers,“If you want to be famous, to get somewhere, you have to work for it. I tell them my story. I had a bad life. But at least here you can get something to eat. If you work for something here, you can get it. There are more opportunities here, if you work for it.” “The first thing to understand (about having your own business) is that it’s the best experience you can have in your life to be your own boss. I wanted to have a new experience, to do something with my life. The reason I do this is that I don’t have the opportunity to do something else, like if I had school. I want to do better in my life. I want people to know nothing is impossible in this life. The little business I have, they can do it, too. Nothing is impossible.” Leonardo also expressed the classic immigrant sentiment that “in the United States one has the chance to be somebody. The U.S. gives us (immigrants) and our children all kinds of possibilities.” Asked what she would like people to understand about what it is like to own her own business, Cristina replied, “The most important thing is to keep your place open and running because you invest basically everything you have, everything you worked for, your effort, your desire, your money. And so many people help you because they believe in you. So for me not to make it and see places closed down is disappointing. It’s heartbreaking. That’s the main thing. It’s hard work because you work so many hours, but you know it’s for you. It’s something I desire to do. I love my business, seeing people dancing, enjoying themselves, seeing the place packed, seeing people in line to get in. It feeds my soul. Having people in the restaurant come up after eating and saying they enjoyed it. It makes you feel so good.”
Asked if they feel they have accomplished their goals, most say that at best they have done so only partially and that they still have additional goals both for themselves and their businesses. In terms of personal goals, the most common one was for their children to get an education so that they can go farther in life than they have. To do so, they realize that their children must attend college and the handful of owners with teenage children is actively searching for information about what the process involves. In 2004, three business owners had a child enrolled as freshmen in local colleges. In terms of goals for their businesses, most say that they have not yet reached all of their goals. For some the most immediate goal is paying off the debts incurred in the forming their business. But for others, the next goal is growing their business, expanding or initiating additional businesses and their ideas and plans are usually concrete and specific. For example, while Gertrudis and her husband build their new business, they already have plans for the next business they intend to open and have even bought equipment in preparation for it. Describing in detail his ideas, Eduardo confided, “I still have one dream, the only one I have left. I have so many years in the restaurant business that I always think I will do this. I would like to have some land and build a restaurant from the ground up, design it myself to my own taste, with arches, for example.” Jaime says he would also like to expand his “tienda latina” to include a meat and seafood area when he is able to afford the addition. When he first started, Tomas said his idea was to just establish his business in the local area, but now his “dream” is to establish a chain of convenience stores that focus on the Hispanic market. Felipe, who recently opened his own business, also has “a lot of ideas for other businesses.” One idea is to open a store here that features handmade goods from his hometown in Mexico. Similarly, Cristina explained, “There are lots of things I want to do in the business. My desire is to have one of the biggest nightclubs here in Harrisonburg. Four hundred fifty (her current capacity) is nothing. I want it to be huge, beautiful with lights. I would like to be able to have room for 2,000. My other major goal is to see my kids grow up.”
One of the advantages that immigrant businesses are often assumed to possess is “social capital,” which is usually construed as social networks of co-ethnics that are based on “bounded solidarity” and “enforceable trust” (Portes and Sensenbrenner 1993). Such networks can be resources for start-up capital, information and business tips, access to protected markets and a “pliant and disciplined workforce” (Portes 1998). However, the utility of such networks is no more advantageous than the quality and quantity of resources they contain. As Portes points out, “For new immigrants in working-class communities, the natural path is to follow the course of earlier arrivals” (Portes and Rumbaut 1996: 87) which means that people get channeled into the same jobs as their personal contacts, making mobility difficult if the established channels of job referrals lead to dead-end, low-paying jobs. In Harrisonburg, the employment histories of most business owners suggest that they came to the area at the “invitation” of friends and families who, in many cases, helped them find jobs in the poultry plants. However, their histories also show that they did not remain in the plants, but rather drew upon previous job experiences, as well resources contained in networks of relatives and friends, sometimes extending beyond the local community both ethnically and geographically, to start their own business. Given the emphasis that researchers place on the uses of intraethnic solidarity, it is important to note that local business owners’ networks often included individuals outside of their own ethnic group, either from other Spanish-speaking countries or “Americans” (Anglos) and a typical way to meet such individuals was in the workplace, including their own business. For example, Raul and Florencia, received both free housing and help in securing a loan to open their business from Raul’s “American” boss. They have also received information and advice on running the business from another Hispanic couple, who, though not co-nationals, own their own business and who they originally met while working together in the poultry plants. As previously noted, Roberto received assistance from one of his “American vendors” in securing a liquor license, while Tomas’s “American” landlord paid for the expansion of Tomas’s store. These and other similar examples suggest that social networks frequently cross ethnic boundaries and may confer greater advantages than networks that are strictly bounded by ethnicity since they contain more diverse resources (see Granovetter 1973 on the “strength of weak ties”). What appears to be crucial is not so much “bounded solidarity” as trust generally, whether it is enforceable by the ethnic community or not. “Confianza” or trust is a cultural issue that is continually raised in discussions of any dealings involving Hispanics. Local cultural brokers advise service providers that in order to work effectively with Hispanics, they must establish relationships of trust. “Confianza” is also an issue of primary importance in business (Levitt 1995) and financial relationships (Velez-Ibanez 1983). In their account of an elite entrepreneurial family in Mexico, Lomnitz and Perez-Lizaur, write that
“Confianza is thus a basic element of economic interaction in business. The entrepreneur requires a circle of persons, each connected to him through a relationship of trust. In the kind of enterprise described here, business and money matters are delicate and require the kind of trust and interpersonal loyalty one expects to find in relatives. The entrepreneur also sees himself as a provider of jobs for his relatives, and he is forever branching out into new ventures to create suitable openings for them. (Lominitz and Perez-Lizaur 1987:119)
Although co-ethnicity may raise individuals’ level of trust, since it is easier to establish a relationship with people with whom you can converse in your own language, it does not automatically create the kind of trust necessary for conducting business. For that, people tend to turn to family. In fact, very few businesses, apart from the larger restaurants, have more than two or three paid employees, so that, taken as a whole, local Hispanic businesses offer very limited opportunities for intraethnic employment or the development of an “enclave economy.” Among those owners who have employees, it is clear that relatives are favored for employment. For example, Tomas spoke about the problem of not having a relative with computer skills. Although he would like to employ someone to computerize his inventory, he explained, “It is hard to find the perfect person to do that, someone I can trust. I could probably find someone, but it would be difficult. I would worry about them stealing from me.” In Sergio’s case, his only employees are his four brothers, while Diego’s only employee is his brother-n-law. With 80 employees, Vicente has one of the largest businesses in the area, which includes multiple locations. Each of his sons manages one of the locations and his daughter and son-in-law also work in the business. Since most businesses are much smaller than Vicente’s, they are even more clearly family operations, employing only family members—usually spouses and/or siblings– whose labor may be paid, unpaid or only sporadically compensated. The significance of this reliance on family labor is evident in the fact that, whether they work on a regular or contingent basis, relatives are usually referred to as “helping out” or “helpers” rather than employees, suggesting that this is an arrangement that both parties regard as more of a family obligation than a strictly economic transaction. For example, Porfirio and Patricia’s 12 year old son “helps out on weekends,” while Wilfredo’s father, during his visits from the Dominican Republic, “helps, but isn’t an employee.” Similarly, when Benjamin and Doris went on vacation, Benjamin’s brother and his wife took charge of their business as a way of helping out, though they are not regular employees. “Helpers” may also include trusted friends who are treated like family. For example, Antonio worked for Ruben in his spare time without regular pay, taking care of accounting and interpreting tasks as a way of “helping him out.” Although ‘helpers” may be from the same place of origin, as in the case of Antonio and Ruben, they need not be. For example, Susana, who is Salvadoran, and Ines, who is Puerto Rican, have been best friends for many years. Ines often “helps out” in Susana’s shop on weekends. Similarly, Sonia, who is from Uruguay, said that she was “just helping out” Salvador, the owner who is from Mexico, when he was unable to be present in his shop to receive a delivery. In a few businesses, the workers include “Americans,” but in every case, they are individuals who have a personal or familial relationship with the owner. For example, Carlos’s “American” girlfriend works in his store. Similarly, the “American” woman who helps Candido manage his store, is his uncle’s girlfriend. Her bilingual skills are especially helpful since Candido’s English skills are limited. She helped him complete the paperwork required to open the store, as well handling suppliers. Eduardo and his brother are also partners in business with an “American” woman, who has been a family friend for many years.
Apart from “helpers,” paid employees, in businesses that have them, are virtually all Hispanic and immigrants, although not necessarily from the same country of origin as the owner. Unlike large metropolitan areas where immigrant business owners are able to tap into larger labor markets, Hispanic business owners locally do not confine their hiring solely to co-nationals, probably because the local labor pool is not sufficiently large to permit such ethnic specificity. David and Catarina, who are from El Salvador, have two Mexican employees. Alicia, who is Mexican, has employees who are from Puerto Rico and the Dominican Republic, while Susana, who is from El Salvador, has a Cuban employee; Florencia, who is from Mexico, has a Uruguayan employee; and Fernando, who is Uruguayan, has an employee from Venezuela. Although Hispanic business-owners may have privileged access to co-ethnic labor, it is clear that Hispanic workers who are looking for work outside of the poultry plants are not limited to employment within co-ethnic enterprises. In the last few years, Latino workers have begun to find jobs in many sectors of the local economy (e.g. construction, landscaping, hotels), and particularly in restaurants, many of which are owned by Asian and European immigrants.
Given that most Hispanics are newcomers to the community (if not the country), who have not yet accumulated locally relevant information, much less financial resources, (although they may have acquired social capital elsewhere in the U.S., as Hernandez-Leon and Zuniga 2002 demonstrate), the business-specific resources available to entrepreneurs within the local ethnic community are limited. Under these circumstances, it is advantageous for entrepreneurs to be able to reach across ethnic boundaries in order to obtain whatever resources may be available. In order to do this, they usually must be able to breach the language barrier (although there are many Spanish-speaking “Americans” in the area due primarily to missionary activities in Latin America). It would be hard to overestimate the significance of shared language in determining what resources an individual can access. It may be that language is a more important factor than nationality per se in determining how individuals obtain needed resources. Those individuals who have acquired some facility in English are obviously better able than monolinguals to tap into resources outside of their ethnic community, thus substituting the potentially larger pool of mainstream resources for those within the ethnic community (see Yoon 1991 and Pessar 1995 for discussions of the substitution of class resources for ethnic resources). This is particularly important if the accumulated store of relevant business experience and knowledge within the ethnic community is not well-developed.
Given the divisions among Hispanic immigrants that stem from nationality and nationalism, social class and education, religion and politics, time of arrival and immigration status in the U.S as well as dialect, it is not surprising that members of the community often decry the lack of unity among Hispanics. In Harrisonburg, the divisions become apparent in many different ways, such as church membership and soccer team composition. Even the dance floor of a local Hispanic-owned nightclub is divided between two separate rooms, each offering a different type of regional music and attracting dancers of different nationalities. At present, there are no institutions or issues that formally unite all of the various sectors of the community, although incidents that have threatened Hispanics locally (e.g. INS raids) have often resulted in temporary mobilization and more visible “reactive solidarity,” usually with the cooperation of local “American” activists. Even the term “Hispanic” does not appear to hold equal salience for everyone. For new arrivals, being perceived as and labeled “Hispanic” is in itself a new experience and identity that becomes meaningful primarily in relation to the mainstream “American” community, which fails to perceive intragroup distinctions among Hispanics. For many local “Americans,” “Hispanic and “Mexican” are, in fact, interchangeable terms.
Although Latinos often speak about discrimination particularly in employment, the resulting “reactive solidarity” (Pessar 1995) has resulted primarily in a “we versus them” mentality, but not a sustained and organized response. To date, there are no organizations that bring together co-ethnic business-owners, who often provide leadership in larger communities, nor are there any more broadly based organizations that draw participation from all segments of the Hispanic population. There are not even any hometown associations such as those that immigrants often form in larger cities. While the Catholic Church, brings together over 800 people of diverse origins every Sunday for Spanish Mass, there is a constantly changing array of evangelical and Pentecostal storefront churches that separate the community into multiple, small Spanish-speaking congregations. A number of mainstream Protestant Churches also contribute to the splintering of the community through the development of Hispanic outreach ministries that seek to attract new members. Even an Hispanic soccer league, which some Hispanic business owners were instrumental in forming and that has brought together as many as 20 teams of varying national and regional origin for short periods of time, has had difficulty sustaining unity. It is currently splintered into a couple of smaller leagues, albeit business owners continue to provide leadership in both leagues.
Integrating the Business Community
While it would probably be an overstatement to say that long-term residents have fully embraced the changes wrought by immigrant newcomers to the area, there are segments of the “American” community that are actively seeking to establish “bridges” with the Hispanic community. There are also members of the Hispanic community who continue to try to exert leadership and to organize Hispanics locally. Both groups have focused at least some of their effort on Hispanic business owners. It is worth examining one of these efforts, involving the Chamber of Commerce, in some detail, since it illustrates the challenges involved despite the business community’s current openness to drawing in Hispanic entrepreneurs.
In 2003, two local Latino activists, neither of whom is a business-owner, organized a meeting with a group of Latino business-owners to discuss the possibility of forming a Hispanic Chamber of Commerce. The director of the local Chamber of Commerce was invited to the meeting and with the agreement of the meeting organizers, the effort eventually became redirected toward recruiting Hispanic business owners to become members of the local Chamber of Commerce rather than establishing a separate group. This effort coincided with a Chamber initiative to recruit new members generally.
The Harrisonburg Rockingham County Chamber of Commerce, which was founded in 1916, has a membership of 775 (out of a total of about 2,000 area businesses and organizations), but until 2004, no Hispanic business owners and very few immigrant business owners of any nationality were members. In fact, when the director of the Harrisonburg Chamber met with Latino business owners, they asked why the local Chamber had not taken the initiative to reach out to Hispanic businesses previously. The response was that the Chamber “didn’t have access” to the Hispanic community. But new leadership probably played an additional role in the Chamber’s outreach effort. When the previous director retired in 2002, the new director began to examine new goals, including increasing membership. The new director emphasized that the Chamber is not just for big companies, especially since 80 percent of the businesses in the area employ 15 people or less. For its annual membership drive, the Chamber established the goal of contacting 1,000 of the 1,200 businesses that were not already members and adding at least 100 new members. According to the director, the benefits of membership were getting “exposure, marketing, networking and the ability to tap into people relocating to the area.” (Vanderhoek 2003:13). Additionally, members of the Chamber’s 2002-2003 Leadership Program also decided to research and identify strategies to increase participation by minority business owners, since, as noted in the Chamber’s Newsletter, “the overwhelming majority of participants in the Community Leadership Program came from similar ethnic backgrounds” (Harrisonburg-Rockingham Chamber of Commerce 2003:3).
At the same time that the Chamber decided to actively recruit Hispanic business owners, local Hispanic activists contemplated whether to form a separate Hispanic Chamber or affiliate with the local Chamber. Their decision to affiliate with the local Chamber was at least partially spurred by talks with a recently-formed Hispanic Chamber of Commerce in Richmond. In those discussions, local Hispanics were advised to affiliate with the Harrisonburg Chamber because the Richmond group did not have the resources to provide any assistance and the local group seemed to agree that it would be “beneficial to have everyone together and make it as inclusive as possible,” as the local Chamber director argued, adding that the Hispanic Chamber could be a committee within the larger Chamber. By personally contacting a number of business-owners, activists were able to convene a small group of about a half dozen Hispanic business-owners to discuss the benefits of joining the Chamber. Commenting on the small number of people who showed up, a couple of participants observed, “Hispanics don’t help each other as they should.” On the other hand, there was a great deal of enthusiasm for one participant’s suggestion to establish a commercial center for Hispanic businesses.
The more immediate problem, which was apparent from the start of the meeting, was the language barrier. The dialogue between the Chamber director and the rest of the group required constant interpretation and much detail was lost in the process of summarizing what had been said. Membership forms that were handed out were available only in English and although participants were told that they would have access to the Chamber’s library, none of the materials were available in Spanish. Asked if there would be interpreters available at the Chamber office in case a Spanish-speaker came in for help, the director responded that they would “work it out.” Not surprisingly, no Latino business owners showed up at the next scheduled meeting.
Recognizing the need for materials in Spanish, the Chamber engaged two international business students from the local college to work as interns with the city and county to translate their business regulatory publications. The hope was to develop materials to be used in courses for Spanish-speaking business owners. Additionally, as the Director wrote in the local business journal, “The aim is to help these (Hispanic) businesses grow and get started in the proper way. Our other goal is to cross-educate both the Spanish and English-speaking business people on how to connect and do business with one another—to turn to each other for goods and services. We can also facilitate how both can encourage speakers of the other language to patronize their stores, making each feel comfortable in a foreign environment by breaking down the language barrier and up the comfort level.” (Michaels 2003:20).
A committee organized by the Chamber together with the local college’s Small Business Development Center met for several months to plan for the first workshop for Spanish-speaking business owners. They contracted an experienced bilingual instructor from a Hispanic business-consulting firm in Washington, D.C. to offer two workshops entitled “Issues for Your Small Business” and “Steps to Grow Your Business.” The workshops were advertised in both the local Spanish and English language newspapers and an editorial in the Spanish language newspaper strongly urged people to attend. Flyers in Spanish were also distributed to Hispanic businesses and some of the larger churches. Despite the publicity, only one person registered for the workshops, which were therefore cancelled.
In a change of strategy, the Chamber organized a Hispanic Business Outreach Committee made up of staff and active members. Although they were invited, none of the original participants from the Hispanic community attended the first meeting at which a list of goals and objectives was distributed. One of the main goals was to invite Hispanic business owners to attend the Chamber’s monthly “Business After Hours” (BAH) as a way of showing them the advantages of membership. Spanish–speaking volunteers were supposed to be recruited from member businesses to act as “Ambassadors,” who would invite Hispanic business owners to the Business After Hours and interpret for them if necessary. The same question originally raised by Hispanics a year previously was raised by mainstream members of the Committee about whether Hispanic businesses would be integrated into the general activities or operate separately within the Chamber. The Director reiterated her opinion that “other than the course to be taught in Spanish, we’re trying to get this community networked into the larger group. They will be included in everything or we’ll wind up with a Hispanic Chamber.” Asked how Hispanics she spoke with felt about this, she replied, “There are special needs, but they didn’t want to be treated separately. They didn’t want to be isolated as a chapter.”
A list of Hispanic businesses was compiled and invitations were sent in Spanish to each business, with follow-up calls by an assigned Spanish-speaking committee member before each monthly Business After Hours. It was agreed that while some business owners speak English, they would feel more comfortable speaking Spanish and especially reading Spanish. After nine months’ effort, the results were mixed, as indicated by the debriefings after each BAH. Each month the report was virtually the same. Committee members reported that one to several Hispanic business owners or Hispanic employees of mainstream firms attended the event, but few did so more than once and, as of Fall 2004, only one Hispanic business had become a paid member of the Chamber of Commerce. All of the Hispanics who have become involved in the Outreach Committee are bilingual and relatively well educated. Two became involved in the Chamber after they approached the Chamber for assistance on their own initiative.
At each debriefing session of the Outreach Committee, the same questions were repeatedly discussed: “why don’t the Hispanic business owners attend the Business After Hours” (which usually average 130-150 attendees) and “why don’t they join the Chamber.” The Hispanic members of the committee were constantly asked to provide some explanation and they did. As one member explained, “Many (Hispanics) don’t know how to fit into the business group, especially for language and the first time. I think it’s (BAH) a good idea. Unfortunately, we have a very closed community with different cultures. Hispanics aren’t very unified among themselves.” On another occasion, he said, “Hispanic businesses don’t know what the Chamber of Commerce is about. It’s not easy to bring people from different countries and cultures together. Many people feel afraid. My first After Hours, I felt like that, but not too much because I knew some people. I wondered what am I doing here.” He also recounted that one of his guests told him after the BAH that, because no one talked to her, she “felt like nothing and would not go back.” Another committee member told the group, “The first Business After Hours I attended, I felt out of place” and a guest that she brought and tried to introduce to people, “looked afraid” and told her “I don’t know why I am here.” At another debriefing the committee was told, “Hispanics are afraid to speak with Americans because they don’t feel they speak English well. They feel they won’t use the right word.” On a third occasion, a Hispanic woman who attended one BAH told the group, “The time I was there, no one talked to me. The guy who was standing at my side, when he saw he couldn’t make business with me, he left…It’s like a party. If you have a party in your home, you have to welcome your guests.” Another Hispanic member of the committee suggested an additional problem. “Most Hispanics have just a basic business here and feel intimidated by Americans who have more established businesses.” At another meeting, someone reiterated the issue of intimidation. “The Chamber needs to assure the small business people that they belong in the BAH even though they are small compared to really big businesses.”
The idea eventually evolved to have a Business After Hours that would be sponsored by two Hispanic-owned businesses. One of the owners explained, “We can’t survive if we are apart. We don’t have enough power. We don’t have a leader. Sometimes a leader appears in the newspaper, but people don’t recognize him. We can’t make an After Hours by ourselves, but together we can sponsor one. We can host an After Hours and introduce ourselves.” Apart from the Hispanic-sponsored After Hours, no other solutions were offered for overcoming the language and cultural barriers that prevent newcomers from feeling welcome and comfortable. Other mainstream voluntary groups in town that have tried to recruit immigrants have also grappled with similar problems with little success.
At the same time, another Hispanic member of the Outreach committee asserted that the debriefings following the monthly BAH were unproductive and would keep Hispanic business owners from attending if they did not progress to other more substantive issues. Explaining again that Hispanics do not attend the Outreach committee meetings because they “are afraid to speak English and don’t understand what is going on when everyone is speaking English,” he suggested that a better approach would be to find a person who speaks English and Spanish who could explain to Hispanic business owners in their own separate meeting what the Chamber does first and later they could meet with the “Americans.” He added, “People know about the Chamber of Commerce in Mexico and they think it does nothing, just collect money. Many times they don’t know about the laws (here). The Chamber can help with this.”
This issue of having someone explain the purpose of the Chamber to potential members had been raised on a number of previous occasions. For example, at one meeting, a prospective member asked for clarification of the purpose of the Business After Hours and Chamber membership, noting that she did not feel the need to be a member because, as she explained, “I don’t need any help getting clients. My business is growing without any difficulty.” A Hispanic committee member responded, “The Hispanic community has some boundaries and we don’t know how to open the door to the American community. The Chamber helps educate us about what there is.” Another responded, “Being in the Chamber, I learn how to do business here. If I am not a member, I won’t be successful.” The prospective member then suggested that the most effective way to draw Hispanics into the Chamber is by word of mouth.“Personal testimonials about how the Chamber has helped will influence people more than anything else.” She, in fact, was attending the meeting because someone had told her how much help they had received from the Chamber and Small Business Development Center. She also admitted that she was “concerned about losing customers because many are ‘illegals’ who come here to work and then go home. “They don’t intend to stay, so if there are no jobs (alluding to recent layoffs at the poultry plants), they will leave and go somewhere else and that would hurt all of the Hispanic businesses that depend on them as customers.” Responding to her comments, another committee member said, “That’s why we have to integrate. If we bring our businesses to Americans, we will survive. Right now there are no Hispanic businesses in construction. None in insurance. No Hispanic retirement homes.” Taking up the theme, another member added, “We don’t have anything. We don’t even have a Spanish (radio) station.” Disagreeing vehemently, another committee member remarked, “We don’t need Spanish nothing. I don’t live in Spain or Latin America. I live in America. We need to integrate in this country. If you go to Latin America, you have to learn Spanish. Here you need to learn English.” The prospective member retorted, “I live here legally and plan to stay, but illegals don’t live here forever. They work and go home.” The discussion ended with the declaration that “If we don’t change our mentality, we won’t grow.”
Given that, as one member put it, “people don’t feel like participating if they don’t understand very well,” Hispanics on the committee continued to push for a separate workshop or group for Spanish-speakers that would at least explain the purpose of the Chamber of Commerce. While someone suggested that such a committee should be separate from the Outreach committee, the staff person conducting the meeting explained that he hoped that “as more Hispanic businesses join, the Outreach committee will morph into a Hispanic “business roundtable.” He noted that Hispanics who have attended have said, “they don’t want a separate Hispanic Chamber, just the opportunity to discuss common issues in Spanish, but they need a critical mass to show up for that to happen. Three people isn’t much, but with 10 people, they could do something.”
At a subsequent meeting, the idea of a Spanish-speaking roundtable group within the Chamber was raised again, as well as changing the name of the committee from Hispanic Outreach to simply Hispanic Business Committee. Before scheduling a meeting for the roundtable, someone suggested that the committee conduct a survey of Hispanic business owners in order to ascertain such information as when to hold the meetings, the topics to be addressed, if owners would attend, and which issues, such as cash flow, they find challenging and in which are they doing well. The survey would also ask if they would be interested in Chamber membership. Everyone agreed to the survey. One member remarked, “We invite, invite, invite and they say, what can you offer? Another said, “We err in thinking that if we offer it, they will come. Don’t assume there is a need. There needs to be a survey to test the market.”
As possible topics for a roundtable were discussed, someone suggested, “One interesting topic would be how to make the business grow by advertising. Once they see that the Chamber helps the business grow, they will come and they will bring someone with them. It will self-advertise.” Another person agreed that “marketing is always a topic of interest to small businesses and a third person suggested “taxes and human resources, everything about handling employees. People can learn this as they go, but it is hard because they don’t know anything about employees.” In an earlier meeting, someone suggested that “they don’t just need help getting more business, they also need help organizing their businesses, things like taxes. They don’t know where to go and there are businesses that take advantage of them because they tell them they know how to help.” Another person suggested that Hispanic businesses need information on loans and how to do business, as well as how they can do business with Americans. He added that local Hispanic business owners “may think they have their business and all they need to do is put the stuff on the shelf, but they are wrong and will be out of business in a few years.”
After months of discussion and the sponsor’s last minute concern that no Hispanic business owners would show up, the Hispanic Business After Hours was held, but not in the host’s place of business, as would be the case for the regular monthly Business After Hours. Because the sponsor did not have a business location, she arranged for the event to be held in a Protestant Church that has a very active Hispanic ministry. The turnout was good, but the vast majority of the approximately 40-50 attendees were Chamber members and staff who were not Hispanic. Although there were about a dozen Hispanics in attendance, none were business-owners, except for a couple of friends of the sponsor who was there to help her with the refreshments and the owner of a new (as of 2004) second Spanish-language newspaper who was covering the event for his publication. The rest of the Latino attendees were bilingual professionals employed in government institutions or mainstream businesses. Although the Hispanic Business Committee continues to meet, to date the goal of integrating Hispanic businesses into the Chamber of Commerce remains elusive.
Despite the recent growth of research on Hispanic entrepreneurship, virtually all of the studies to date have focused on entrepreneurship in large metropolitan areas and ignored the development of immigrant businesses that is occurring in tandem with the movement of Latino populations into rural areas of the Southeast and Midwest. At the same time, the growing literature that focuses on new geographic destinations of Hispanic migration tends to focus on how migration is linked to the demand for cheap labor in rural agriculturally-related industries, thus perpetuating a monolithic portrait of Hispanics as an undifferentiated mass of low-wage laborers. The case of Harrisonburg suggests that these newly emerging Hispanic communities contain considerably more social complexity and cultural diversity than is usually recognized. While it is true that many immigrants have been drawn to the Central Shenandoah Valley by the availability of jobs in the poultry-processing industry, the increasing size and concentration of the immigrant population have created myriad employment opportunities for other Latinos and non-Latinos who provide the community with goods and services. Hispanic entrepreneurship is one such outgrowth of this population increase. As this study has demonstrated, the number of Hispanic-owned businesses has increased dramatically as a concentrated settlement of Latinos has developed over the past decade. Like the local immigrant population in general, most entrepreneurs were originally drawn to the area by abundant jobs in the poultry processing industry, but they have since seized the opportunities presented by a growing immigrant community to move from working in the plants to working for themselves. In doing so, they have been able to draw upon differing combinations of personal and ethnic resources in order to take advantage of a nostalgic market for culturally-oriented products, as well as the demand for services offered unencumbered by the language barrier and facilitated by shared cultural understandings. It may well be that entrepreneurship represents the next step in a migration process that has evolved from sojourning to settlement (Cornelius1992) and one that has provided economic and social mobility to other immigrant groups in the past.
At the same time, Hispanic-owned businesses face many challenges, primary among which is competition from both intraethnic and mainstream sources. While in large metropolitan areas, inner city immigrant neighborhoods, often lacking access to goods and services in the mainstream economy, provide a protected niche for entrepreneurship, in Harrisonburg, Hispanic businesses face stiff competition from mainstream businesses that are increasingly willing to cater to the Hispanic consumer market by offering similar goods and services, often at a lower price.
Premised to a large extent on the existence of a “protected market,” the fate of most Hispanic-owned businesses depends very heavily on the economic fate of the local Hispanic population, as well as their sense of ethnic solidarity. If the poultry industry, which is no longer locally owned and thus less committed to the area, decides to abandon the Shenandoah Valley for areas further south that offer greater cost advantages in a very competitive market, it is unclear whether or not the local economy would be able to absorb the excess labor created. Nor is it clear how much of the Hispanic population might remain in the area rather than simply following the jobs out of state. It is always risky to try to predict the future, but some patterns are beginning to emerge. With the recent closure of several poultry plants and the downsizing of others, many people in the local area have begun to speak about the end of the local poultry-processing industry as though it is a certainty, with the only uncertainty attached to how much time it will take to occur. Hispanic business owners are also aware of this possibility and discuss the advisability of expanding their customer base given that they may lose co-ethnic customers who may choose to follow the jobs to other places. The experience of other places is instructive. When the construction market that attracted Hispanics to Raleigh, North Carolina in the 1990s slowed, many immigrants moved north to the Hampton Roads area of Virginia where they are quickly replacing local labor in construction (Snider 2004b). Because Harrisonburg’s economy is very diversified and the demand for low-wage labor continues to increase in other sectors of the economy (e.g. construction, landscaping, hotels and restaurants), immigrants in the local area are already finding jobs beyond the poultry plants. Assuming that this trend continues, the movement of Hispanics from workers to business-owners seems likely to continue as well.
- According to Torres, Texas, California and New York were the main areas of settlement of Hispanics prior to the 1980s. Latino population movements began to shift in the 1980s, with Hispanics moving from Texas to the Midwest. In the 1990s, the Southeast became a new destination, with some of the movement originating in Texas and Florida. The meatpacking and poultry-processing industries figure prominently in these population shifts. Torres reports that Hispanics represent about 20% of the workforce in South Carolina’s poultry processing industry and a third of the workers at the Louis Rich turkey processing plant in Newberry. Jobs in the poultry processing industry continue to attract Latinos to specific localities in South Carolina, Georgia and Kentucky. For example, the population of Siler City is now 40% Latino (Torres 2000:4). During the 1990s, the Delmarva region (an area that encompasses contiguous parts of Maryland, Delaware and Virginia), which is the sixth largest poultry processing region in the U.S., experienced a large influx of indigenous Guatemalans from the San Marcos area of Guatemala seeking jobs in the poultry plants (see Martin et al 1997). Similarly, Kandel and Parrado (2004) attribute the “new Latino migration” to rural areas outside the Southwest to job recruitment by the food-processing industry.
- The U.S. Census figure includes approximately 16,000 college students enrolled at James Madison University and Eastern Mennonite University in 2000. The large proportion of college students in Harrisonburg influences various aspects of the city’s demographic profile (e.g. age distribution and personal income level) as well as the consumer market.
- The rapid proliferation of Hispanic businesses in Virginia is illustrated by a Hampton Roads newspaper article in which the author shows how Mexican restaurants have multiplied in that area since the first restaurant opened in 1991. By 1997, there were five and by 2001, there were 26. The following year the number doubled to 52 restaurants with an estimated 780 Mexican employees and in 2004 the number of Mexican restaurants grew to 70, employing about 1,050 workers recruited from Mexico (Snider 2004a).
- According to 1997 data released by the U.S. Commerce Department’s Census Bureau, Hispanic-owned businesses represent about six percent of all non-farm businesses nationally, but rates differ substantially from state to state in accordance with length of settlement. For example, Hispanic businesses constitute a larger percentage of all businesses in states with large Hispanic populations and a long history of settlement, such as New Mexico where Hispanic-owned businesses represent 22 percent of all businesses, Texas where they represent16 percent of all businesses, Florida where they are 15 percent, and California where they are 13 percent. In contrast, in the southern states that are new destinations of Hispanic migration, Hispanic businesses are not as heavily represented. However, Virginia has the highest percentage of Hispanic-owned businesses of any of these new destination southern states. For example, Hispanic-owned enterprises represent three percent of all firms in Virginia compared to two percent in Georgia and one percent in North Carolina (U.S. Department of Commerce. 2001).
- The Hispanic Health survey involved telephone interviews conducted by native Spanish-speakers with 213 Spanish-speaking residents of Harrisonburg and Rockingham County who were identified from the local telephone book.
- In August 2004, average hourly earnings nationwide were $15.77. The unemployment rates nationally were 4.7 percent for whites, 6.9 percent for Latinos and 10.4 percent for blacks (Henderson and Joyce. 2004: E1, E3).
- Using 1990 Census data, Effland and Kassel (1998) show that a “substantial majority of rural Hispanics are of Mexican origin and that historically few Cubans and Puerto Ricans have settled in rural areas. They also show that poverty is a pervasive problem” for rural Hispanics and associate it with a number of factors: continuing new immigration, lack of English language proficiency, poor education, concentration in poorly-paying jobs especially in agriculture, low female labor force participation and high rates of childbearing which reduce the number of earners in relation to household size. Of all of these factors, they regard English language proficiency as the most important predictor of economic success.
- A 2004 report by the Pew Hispanic Center used Census Bureau data from 2002 to calculate the net worth of minority households nationally and found the median Hispanic household’s net worth was $7,932, while over a quarter of Hispanic households have no or negative net worth. In comparison, the median white household had assets of $88,000 while only13 percent had zero or negative net worth and the median black household had a net worth of $5,998 while a third had no or negative assets. (White and Henderson. 2004: A11).
- The growing consumer power of Hispanics in the U.S. has given rise to research focusing on Hispanic purchasing habits and conventions devoted to ethnic marketing strategies. For example, a survey of 1,600 Hispanic households, titled “El Mercado 2004: A Perspective on U.S. Hispanic Shopping Behavior,” conducted by ADVO and the Food Marketing Institute, found that Hispanics spend more on groceries ($128-131/wk.) than the rest of the U.S. population (which spends $91/wk). They tend to shop more often (26 times a month) than the rest of the population and shop in multiple establishments in order to find preferred food products. The study also found that Hispanics can be divided into two types of consumers: “loyals and impulsives,” representing 45% of the respondents, who base their purchases on quality and brand loyalty rather than price and “savers and investigators” representing 65% of the respondents, whose purchases are based on price, “hunting bargains” and using discount coupons. The survey author, Thomas Tseng, noted that third generation Hispanics closely resemble the general population in their food-buying habits (el Sentinel.com 2004).
- Zhou (1992) makes a similar distinction between Chinese businesses that operate within the ethnic enclave economy and those that she calls “the enclave export sector” that operate in the mainstream economy (e.g. the laundry business that historically served mainstream rather than co-ethnic customers).
- That food nostalgia sells well is illustrated by the opening of a “Pollo Campero” restaurant in 2003 in Falls Church, Virginia. The restaurant, which is owned by a Salvadoran immigrant, is a franchise of a famous Guatemalan fast-food chain. On the opening day, a crowd of people waited in line from 2 am. until 10 a.m. to buy the distinctive fried chicken, causing a massive traffic jam. The restaurant earned $60,000 in sales its opening weekend. (Williams 2004). Pollo Campero is one of a half dozen major Latin American restaurant chains that have opened in the U.S. since 2001, “looking to capitalize on the growing Hispanic population, with its estimated $600,000 in annual disposable income. (Gowen 2003). Similarly, banks, both mainstream and Hispanic-owned, are “chasing Hispanic dollars,” since Hispanics make up about 40 percent of the people in the U.S. who do not ‘have direct relationships with a mainstream financial institution” (Serafin 2004: 122).
- The theology and practices of evangelical churches appear to be supportive of economic mobility and entrepreneurship, as Weber (1904) postulated for Protestantism generally in The Protestant Ethic and the Spirit of Capitalism. In his research on a Hispanic evangelical/Pentecostal church in East Los Angeles, Leon writes that Catholics who convert to Pentecostalism are not asked to reject Catholic theology completely, but only sacramental mediation through priests, so that individual congregants become the agents of their own change and salvation. “Like true Protestants, however, each religious agent must be authorized individually, and success and election are proven through the ‘bearing (of) religious fruit,’ and, implicitly, through economic achievement” (Leon 1998:191).
I am grateful to Chris Bolgiano [Special Collections Librarian, Carrier Library, JMU] for her encouragement and support.
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