The following column is the opinion and analysis of the writer:
A new report from the Census Bureau confirms what American Latinos already know: Hispanics have been among the biggest beneficiaries of the country’s strong economic performance in recent years. While the COVID-19 pandemic and associated fallout have temporarily reduced job opportunities for all Americans, the historic economy that preceded it set a strong foundation for the country to rebound.
According to the report, median household income in the U.S. grew by 6.8% in 2019, a record increase, to $68,700, a record level. That’s a faster one-year rise than during the entire period of 2009 through 2016. For Hispanics, things were even better: Real median household income grew by a record 7.1%, or $3,700, in 2019.
Before COVID-19 hit, the Hispanic unemployment rate was hovering near a record low of 4%. In Arizona, it reached a low of 5.5%.
Poverty rates declined dramatically in 2019 — by 1.3 percentage points, overall, to 10.5%, the lowest rate in 60 years. The drop for Hispanics was even greater at 1.8 percentage points, reaching the lowest level in history.
A primary reason for low poverty, low joblessness, and high earnings among Hispanics is a policy environment conducive to entrepreneurship. According to the Kauffman Foundation, Hispanics start businesses around 50% more often than the rest of the population. The light touch policy framework of the last few years rewards our work ethic.
I’ve seen these economic accomplishments firsthand as the owner of HT Metals in Tucson. Thanks to good policy and a strong economy, I gave my employees raises, increased their benefits packages and expanded my business before the pandemic hit. I’ve spoken to many other business owners in Tucson and statewide who have done the same, helping Hispanics — and Americans of all backgrounds — achieve the American dream.
At the end of 2017, President Trump and congressional Republicans passed the biggest small-business tax cut in history. This allowed entrepreneurs like me to write off 20% of our earnings and immediately expense all purchases. As a result, the cash flow of small businesses like mine has significantly increased, boosting investment and expansion opportunities.
Regulatory certainty has also been a welcome relief. No longer must entrepreneurs like me worry about a steady stream of new labor, environmental, and reporting regulation cutting into our operating income. Small business owners need this peace of mind to focus on their customers and employees’ needs — not the government’s.
Big businesses can almost always succeed no matter what the nation’s tax and regulatory framework. To the extent they make it harder for scrappy upstarts to compete, higher taxes and regulations can actually help entrenched interests reduce their competition. For instance, a $15 minimum wage won’t hurt Amazon.com, but it would damage some of its Main Street competitors.
New entrepreneurs, disproportionately Hispanic, often run the type of low-margin businesses whose profits would be swamped by the costs associated with new taxes and regulations. Thanks to falling tax and regulatory costs, small companies have protected their margins and succeeded. The new Census report offers just the latest proof.
COVID-19 has, of course, dealt a devastating blow to American entrepreneurs. A new Yelp report estimates that thousands of Arizona businesses have closed down in recent months, most of which will never reopen.
Yet this is just short-term pain. As long as the country prioritizes policies and political candidates that foster entrepreneurship, Hispanics and all Americans will continue their long-term gains.
Carlos Ruiz is the owner of HT Metals and a member of the Job Creators Network.
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