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OLLAS

Latino Businesses in Nebraska
a
A Preliminary Look

by Lissette Aliaga Linares, Ph.D.
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Executive Summary
     This report is intended to draw attention to the contributions of Latino businesses in the state of Nebraska. Based on an analysis of the U.S. Census Bureau’s 2007 Survey of Business Owners Public Use Microdata Sample (SBO-PUMS) released in 20121, this report presents an updated profile of Latino-owned businesses and the socio-demographic characteristics of Latino business owners in Nebraska. It also examines the evolution of Latino-owned start-ups through an analysis of the U.S. Census Bureau’s Business Information Tracking System (BITS) 2002 to 2006 and other special tabulations. Additionally, this report makes use of a Latino business database purchased and revised by OLLAS2 to identify the geographic distribution of Latino businesses in Nebraska cities. Our study highlights the entrepreneurial capacity of Latinos in the state and points out some key policy implications.

Major Findings
1. From 2002 to 2007, the number of Latino-owned businesses grew at a faster pace than white-owned, black-owned and Asian-owned businesses. The rate of growth in employment, annual sales and payroll outpaced the growth rate of all businesses in the state and all minority-owned businesses.

2. From 2002 to 2007, most of the Latino firm growth can be attributed to the proliferation of firms in the health care and social assistance industries (e.g., child care, elder care services and similar businesses). Administrative support, waste management and remediation services (e.g., cleaning, recycling and like businesses) as well as the construction industries also contributed significantly to the growth in Latino firms. Nonetheless, the growth in sales, employment and payroll was due to the expansion of Latino firms in the manufacturing, wholesale trade and construction industries. Retail trade was the only industry with losses in number of firms, sales, employment and payroll.

3. From 1997 to 2007, the proportion of Latino-owned employer firms, that is, those businesses with paid employees, decreased. This may suggest that more of the businesses opening in recent years have been less likely to hire employees.

4. Sixty-three percent of Latino establishments in operation in 2002 had survived up to 2006. In Nebraska, these survival rates for Latino establishments were lower than survival rates for any other minority-owned establishment. Also, in the period under study, Latino establishments were less likely to expand compared to other minority-owned businesses.  Nevertheless, the few Latino-owned establishments that expanded in Nebraska created enough jobs to significantly counteract job losses due to closings. Consequentially, Latino firms retained 95% of their initial employees, a higher rate than national estimates for all establishments and the estimates of neighboring states for Latino establishments.

5. The statistical profile of Latino businesses in 2007 shows important differences between immigrant-owned and non-immigrant-owned businesses as well as between female-owned and male-owned Latino businesses.

  • Immigrant-owned and Latina-owned businesses make up the largest share of recently established Latino firms.

  • Immigrant-owned and male-owned businesses are more concentrated in the construction sector. Latina-owned businesses are predominantly concentrated in the SBO industry labeled as “health care and social assistance.”

  • More than half of Latino businesses are home-based and one-third of Latino firms are either family or husband-and-wife businesses. Home-based businesses are more prevalent among Latina-owned businesses, and husband-and-wife businesses are more concentrated among immigrant Latino-owned businesses.

  • The use of English predominates in all Latino-owned business. However, half of Latino-owned businesses also use Spanish for business transactions. The use of Spanish is higher among immigrant-owned Latino firms.

  • Similar to the estimate for all firms in Nebraska, 18% of Latino-owned businesses have a website. The use of a website is more common in firms with U.S. born Latino owners, outpacing overall state rates.

  • Compared to Latino-owned businesses, Latina-owned businesses report less use of financial resources for start-ups and expansion.

  • Similar to figures for the state as a whole, most Latino-owned employer firms hire full-time or part-time employees to run their businesses. However, they are also more likely to hire workers in non-standard work arrangements, such as independent contractors, day laborers or “on call” workers through leasing agencies or contract companies. Moreover, half of Latino-owned employer firms do not offer benefits to their employees.

6. Latino business owners are more likely to be male (58%) and relatively young (60% are between the ages of 25 and 54). They are almost equally likely to be immigrants or U.S. born.  Almost half have either completed or have less than a high school education.  Thirty-four percent of Latino owners studied beyond high school, a smaller share than non-Hispanic whites, black and Asian owners.

7. Most of Latino business owners have founded their own businesses yet have never been self-employed before. They are also more likely than business owners of other ethnicities to provide direct services to customers in their own businesses. Almost half of Latino business owners depend on their business as a primary source of income and spend longer hours working in their business than non-Hispanic white and black business owners.

8. There is some evidence that Latino businesses are becoming, or already are, spatially concentrated in cities such as Omaha and Grand Island, suggesting that ethnic enclaves3 may be present or forming in those cities.

 

Read the full report in PDF...

Report Materials

Complete Report (PDF)

Resumen Ejecutivo en Español (PDF)

Press Release (web)