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2011 Hispanic Heritage Month Events-Opening Plenary

CHCI Public Policy Conference Opening Plenary Panel

Keeping the Promise:  U.S. Economy and Changing Demographics

MODERATORRay Suarez, Senior Correspondent, The NewsHour

The Honorable Shaun Donovan, Secretary of Housing and Urban Development
Ronald Brownstein, Editorial Director, National Journal
Jose A. Berrios, President, Berrios Talent Group and Chair, SHRM
Nina Vaca, Chief Executive Officer, Pinnacle Technical Resources, Inc. and Board Chair, USHCC

Widely quoted throughout CHCI’s 2011 Public Policy Conference were the recent U.S. Census statistics and results of the Pew Hispanic Center’s study on Hispanic household wealth. These numbers quantify both the dramatic growth of the Hispanic population in the United States as well as its disproportionate economic losses during the prolonged recession.

CHCI Chair Rep. Charles A. Gonzalez noted in his opening remarks that the Hispanic population grew more than four times the U.S. population as a whole between 2000 and 2010. Most importantly, this growth not only occurred in border states—it happened all over the country. Hispanics were a majority of the growth in 21 states. However, not all the news for Latinos was so positive. The Pew Hispanic Center’s recent study showed that Hispanic household wealth fell by 66 percent from 2005 to 2009. Nearly one-third of Hispanic households had zero or negative net worth in 2009, compared with 15 percent of white households, a significant drop from just four years earlier. “Recent studies have reinforced what many of us already knew,” Gonzalez said. “The economic downturn has hit Latinos harder than anyone. Latinos have lost their jobs, their homes, and lost most of the little wealth and savings they had.”

CHCI CHair CHalres A. Gonzalez

Plummeting home values had the greatest effect on the wealth of all groups;  however, Hispanics were disproportionally affected because they derive nearly two-thirds of wealth from home equity. Additionally, a disproportionate share of Latinos lives in states that suffered the greatest declines in housing values. About a quarter of all Hispanic households in 2009 had no assets other than a vehicle, compared with just 6 percent of white households.

Ray Suarez Moderates CHCI Opening Plenary

Closer to Home
Moderator Ray Suarez, senior correspondent on the award-winning PBS NewsHour and host of Public Radio International’s program America Abroad
, brought these statistics closer to home. “It has been a perfect storm for Latinos in America,” he said. He noted that the loss of home equity means that Latinos now have much less wealth to leverage to help kids in college, to start a business, or to pass on to the next generation. Even more critical to daily life, he noted that unemployment shot up higher and faster for Latinos than for the country as a whole. He raised some important questions for the panel to ponder: “Will Hispanic youth get the education that will allow them to do well?  What does America have to do and what do Latinos have to do to get past a decade of losses?”

Housing—From Asset to Anchor
For many Latino families, the home they purchased in hope of building assets has now become a millstone around the family’s neck. Shaun Donovan, Secretary of Housing and Urban Development, said that it is important that we don’t take the wrong lesson away from this. He emphasized that it’s not that Latinos shouldn’t buy homes; it’s that they need to find the right home at the right price. Financial literacy is a critical part of the solution. On the positive side, he noted that two-thirds of the Latinos who bought homes last year did it through FHA loans. Additionally, he noted that the administration invested $15 billion in neighborhood stabilization last year in neighborhoods that were particularly hard hit. This program connects Americans looking for work in distressed communities with jobs needed to repair and repurpose residential and commercial properties. “It’s important to stabilize and increase values, rebuild wealth, and create local jobs,” Donovan said. He also cited the need for more progress in loan modifications.

Secretary Shaun Donovan Speaks at CHCI's Opening Plenary

While foreclosures are down 40 percent from a year ago, Secretary Donovan noted that the overhand of debt remains the single largest problem for the housing market, with California, Arizona, and Nevada being the hardest hit areas. Panelists agreed that it’s better for the economy and banking system to take the hit and reduce principals than trigger foreclosures. He said that HUD is working very closely with the attorneys general in all 50 states to move this process along.

Jose Berrios of SHRM Addresses Employment

The Mismatch of Jobs and Labor Force
Jose A. Berrios, president of Berrios Talent Group and chair of the Society for Human Resources Management
(SHRM), presented another perspective on the unemployment statistics. He noted that while unemployment remains stubbornly above 9 percent, the latest data shows that there are 3 million jobs available. Unfortunately, human resources professionals are having difficulty finding people with the right education or skills to fill these openings. Fixing the education and skills gap will have a big impact on the unemployment rate.

Education + Inspiration
Nina Vaca, chief executive officer of Pinnacle Technical Resources
, said the solution is two-fold—education and inspiration. She said that she grew up in a family with five kids and didn’t know if she could stay in college, but she did. She said that there is a need for entrepreneurs serving as role models. “When you see someone who looks like you and sounds like you, it gives inspiration and hope.”  She noted that accountability is two-fold. “As Hispanics we can’t be Hispanic for a living; we have to be the best we can be. You have to hold yourself accountable to be part of the solution.”

One concern raised by panel members is the disappointment of people who scrimp and save for their children to attend college and then their children wind up with debt and no degree. Millions of Latino kids borrow money and get some college but they don’t finish and earn their degrees. They wind up paying debt but getting none of the acceleration a degree would provide. Another challenge for education today is that it needs to produce more results for the dollars it gets.

CEO Nina Vaca Says Latinos Need Education and Inspiration
National Journal's Editor Ron Brownstein Cites Optimistic Factors

Cause for Optimism
Ron Brownstein, editorial director for the National Journal, pointed to a cause for optimism: With Latino youth being such a large percentage of the next generation, access to opportunity for these youth is now a matter of national competitiveness. “We are more interdependent than we realize,” he said. “This minority population is the generation that will have to pay into Social Security and Medicare for the aging white population.” On a positive note, the number of Hispanic kids in college spiked 24 percent from 2009 to 2010, resulting in an additional 349,000 Hispanic kids in college.

Suarez echoed this sentiment in the housing market. He noted that if these Hispanics kids don’t get educations and become successful, who will buy the homes currently owned by Baby Boomers who are getting ready to retire?

Another cause for optimism is Hispanic entrepreneurship. Hispanics are starting businesses at higher rate than any other demographic. Today there are 3.1 million Hispanic-owned businesses in the United States.

The Road Ahead
In closing, despite some of the severe challenges and setbacks that the recessed economy has had on Latinos, there are some positive outcomes as a result of the changing demographics.  Increased focus on financial literacy is helping more Latinos find the right home at the right price, and two-thirds of the Latinos who bought homes in 2010 financed them through FHA loans.  Neighborhood stabilization is part of the solution as well as well as banking reforms to put Americans, especially Latinos, on the path to stable employment and home ownership.

More Latinos are embracing the entrepreneurial spirit, charting their own destinies, and becoming role models for the next generation.  Also more Latino youth are enrolled in college, which will help bridge the gap between education, skills, and jobs and allow emerging Latino youth to take advantage of future employment opportunities and shape our country’s destiny.

The road ahead still holds many challenges for Latinos, but with the strength that comes in numbers, a brighter future is ahead.

View the Photo Gallery from CHCI's Public Policy Conference Opening Plenary.