[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
HARNESSING THE POWER OF IMMIGRANT-OWNED
BUSINESSES TO BUILD BACK BETTER
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HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
APRIL 28, 2021
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 117-009
Available via the GPO Website: www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
44-562 WASHINGTON : 2021
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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
JARED GOLDEN, Maine
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
MARIE NEWMAN, Illinois
CAROLYN BOURDEAUX, Georgia
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANDY KIM, New Jersey
ANGIE CRAIG, Minnesota
BLAINE LUETKEMEYER, Missouri, Ranking Member
ROGER WILLIAMS, Texas
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
CLAUDIA TENNEY, New York
ANDREW GARBARINO, New York
YOUNG KIM, California
BETH VAN DUYNE, Texas
BYRON DONALDS, Florida
MARIA SALAZAR, Florida
SCOTT FITZGERALD, Wisconsin
Melissa Jung, Majority Staff Director
Ellen Harrington, Majority Deputy Staff Director
David Planning, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Nydia Velazquez............................................. 1
Hon. Blaine Luetkemeyer.......................................... 3
WITNESSES
Mr. David Dyssegaard Kallick, Director of Immigration Research
Initiative, Fiscal Policy Institute, Latham, NY................ 5
Mr. Daniel Fitzgerald, Acting Regional Director, San Diego &
Imperial Small Business Development Center (SBDC) Network,
Southwestern Community College, National City, CA.............. 7
Ms. Jaja Chen, Co-Owner & Chief of Strategic Initiatives &
Business Partnerships, Waco Cha, LLC, Waco, TX................. 9
Mr. Jose Ponce, President, Re/Max Gold, Fenton, MO............... 11
APPENDIX
Prepared Statements:
Mr. David Dyssegaard Kallick, Director of Immigration
Research Initiative, Fiscal Policy Institute, Latham, NY... 35
Mr. Daniel Fitzgerald, Acting Regional Director, San Diego &
Imperial Small Business Development Center (SBDC) Network,
Southwestern Community College, National City, CA.......... 38
Ms. Jaja Chen, Co-Owner & Chief of Strategic Initiatives &
Business Partnerships, Waco Cha, LLC, Waco, TX............. 41
Mr. Jose Ponce, President, Re/Max Gold, Fenton, MO........... 44
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
Boundless Immigration Inc.................................... 46
FWD.US Immigrant Competitive Advantage Report................ 48
Latino Landscape Network (LLN)............................... 61
National Venture Capital Asociation (NVCA)................... 63
Sayuri Tsuchitani Statement.................................. 71
HARNESSING THE POWER OF IMMIGRANT-OWNED BUSINESSES TO BUILD BACK BETTER
----------
WEDNESDAY, APRIL 28, 2021
House of Representatives,
Committee on Small Business,
Washington, DC.
The committee met, pursuant to call, at 12:15 p.m., via
teleconference. Hon. Nydia Velazquez [chairwoman of the
Committee] presiding.
Present: Representatives Velazquez, Crow, Mfume, Phillips,
Newman, Bourdeaux, Chu, Evans, Delgado, Houlahan, Mr. Kim of
New Jersey, Craig, Schneider, Luetkemeyer, Williams, Hagedorn,
Stauber, Ms. Young Kim of California, Van Duyne, Salazar, and
Fitzgerald.
Chairwoman VELAZQUEZ. Good afternoon. I call this hearing
to order.
Without objection, the Chair is authorized to declare a
recess at any time.
I want to thank everyone, especially our witnesses for
joining us today for our Committee's remote hearing. I want to
make sure to note some important requirements.
Let me begin by saying that standing House and Committee
rules and practice will continue to apply during remote
proceedings. All Members are reminded that they are expected to
adhere to these standing rules including decorum when they are
participating in any remote event.
With that said, the technology we are utilizing today
requires us to make some small modifications to ensure that
Members can fully participate in these proceedings. House
regulations require Members to be visible through a video
connection throughout the proceeding, so please keep your
cameras on. If you participate in another proceeding, please
exit and log back in later.
In the event a Member encounters technical issues that
prevent them from being recognized for their questioning, I
will move to the next available Member of the same party and I
will recognize that Member at the next appropriate time slot
provided they have returned to the proceeding.
Should a Member's time be interrupted by technical issues,
I will recognize that Member at the next appropriate spot for
the remainder of their time once their issues have been
resolved. In the event a witness loses connectivity during
testimony or questioning, I will reserve their time as staff
address the technical issue. I may need to recess the
proceedings to provide time for the witness to reconnect.
Finally, remember to remain muted until you are recognized
to minimize background noise like right now.
In accordance with the rules established under H.R. 965,
staff have been advised to mute participants on the event there
is inadvertent background noise. Should a Member wish to be
recognized, they must unmute themselves and seek recognition at
the appropriate time.
Today's hearing serves as a reminder that the immigrant
story is the American story. For centuries, the United States
has welcomed immigrants from all around the world. These
migrants often risk their safety and well-being to get here.
They cross vast deserts, tumultuous oceans, and rough terrain,
all in the pursuit of a better life and the American dream.
In turn, these immigrants have made our country better. For
generations, they have fueled American small businesses and
embodied the entrepreneurial spirit that helps make our country
great. Immigrant entrepreneurs are a dynamic group, starting
businesses at a higher rate than the general population and
accounting for 28 percent of main street business owners. These
immigrant business owners run many of the institutions that
serve as the pillar of local communities. They own over 50
percent of businesses that supply necessities, like gas
stations, drycleaners, laundromats, and grocery stores.
These entrepreneurs are force multipliers in local
economies. They buy local products, create local jobs, and make
communities more attractive places to live. Immigrants also
have an outside impact in the world of big business. Immigrants
founded 44 percent of 2020 Fortune 500 companies, employing
more than 13.7 million people worldwide.
Despite the great success that immigrant entrepreneurs have
enjoyed, 2020 presented monumental setbacks and obstacles. The
pandemic closed immigrant-owned businesses at disproportionate
rates. At its lowest point in April 2020, COVID has lowered the
number of active immigrant business owners by approximately 36
percent. In other words, we lost over a million immigrant
business owners between February and April. The pandemic
created new challenges for immigrant entrepreneurs, but it also
exacerbated familiar obstacles that have haunted them for a
long time.
When it comes to foundational areas like business
mentorship and accessing capital, immigrants are at a
disadvantage. Immigrants often lack the professional networks
used by many entrepreneurs for guidance and support. They also
struggle to access the capital needed to start and run a
business. Whether due to poor credit history, limited financial
literacy, or a lack of access to mainstream financial services,
immigrant-owned firms have a harder time obtaining the funding
needed to be successful.
The SBA offers resources for immigrant entrepreneurs to
combat this obstacle. SBA resource partners, like SBDCs, WBCs,
and SCORE, counsel and advise immigrant businesses so they can
overcome these barriers. Community development financial
institutions offer lending and microlending to service low- to
moderate-income borrowers from diverse backgrounds. These
organizations do vital work. But the road to recovery is long
and we must do more to support immigrant businesses. If our
economy is to recover, we need immigrant businesses operating
at full strength.
As was the case in the aftermath of the Great Recession,
the businesses that suffered the most during COVID will play a
significant role in our recovery, as inncreased vaccination
diminished the severity of the public health crisis and aided
the return to normalcy. New businesses started by immigrants
will drive local economic growth.
Our witnesses today are a testament to what is possible
when immigrant business owners receive adequate support. I look
forward to hearing your testimony and discussing how we can
harness the power of immigrant entrepreneurs to help rebuild
our economy.
I would now like to yield to the Ranking Member, Mr.
Luetkemeyer, for his opening statement.
Mr. LUETKEMEYER. Thank you, Madam Chair, and thank you for
holding this hearing, especially to discuss the unique issues
immigrant-owned small businesses face.
Each of us have immigrant-owned small businesses in our
districts that are highly integral to our communities. The
ability to start anew, pull yourself up by your bootstraps, and
own a small business are all key aspects of the American dream
that many immigrants are seeking in the United States.
However, immigrant small businesses face the same difficult
tasks as all small businesses face--how to survive the pandemic
and having to deal with the daunting deliverable tax policies
and over regulatory policies looming over their heads. This is
not good for any small firm.
No matter how you slice it, higher taxes are a burden for
small businesses, both the owners and their employees. A
mandatory higher minimum wage and excessive, unnecessary
regulations are a burden for small businesses, small business
owners, and their customers. The continuance of stringent
COVID-19 mandates is burdensome to small business owners and
their employees and their customers. If I sound like a broken
record, that is intentional. The list of liberal policies that
this administration and this majority want to enact that will
have adverse effect on small businesses goes on and on and on.
While no one can deny that the pandemic's emergency period
is unparalleled, what we can cling to is the knowledge that
prior to COVID-19, small businesses were operating at historic
levels. We know that because of the previous administration's
policies, and specifically the Tax Cuts and Jobs Act, small
businesses' optimism reached record heights and the
unemployment rate to an impressive 3.5 percent. When small
businesses have this optimism, coupled with lower taxes and
fewer regulations, they are more comfortable taking risks and
our communities receive new innovations that make the world a
better place and a safer place. These are the characteristics
that drive our economy forward and keep Main Street afloat.
To get back to our pre-COVID-19 small business environment,
we must reject these new liberal policies and continue the
previous administration's pro-growth policies focused on tax
reform and targeted, smart regulation. These are commonsense
principles that allow small businesses to invest their hard-
earned dollars as they see fit. Unfortunately, the Biden
administration and the left's economic policies, along with the
COVID-19 protective measures that continue to hold small
businesses back, cause this group to face unprecedented
challenges. Once busy Main Streets remain dormant in locations
that continue these harsh measures instituted by state and
local governments.
However, state and local governments that have lifted
mandates have seen small businesses begin to fight their way
back to the busy Main Streets of the pre-pandemic days. As the
initial emergency period wore on, we know Congress worked
diligently as a bicameral, bipartisan nature to begin the PPP
and EIDL programs. In addition, Congress extended the Debt
Relief program for new and existing 7(a), 504, and microloans.
Bipartisan congressional efforts also created the Shuttered
Venue Operators Grant Program for venues, theaters, and
museums. These programs have aided small businesses in every
congressional district. They have helped all business owners of
all backgrounds without limiting access to specific groups.
While these grant and loan opportunities have been vital in
keeping small businesses afloat during the emergency period,
these programs do require diligent oversight. The December
COVID relief bill alone delivered $325 billion to the Nation's
smallest and hardest-hit businesses and industries. But
realize, when billions of taxpayer dollars are being used, we
must insist that they are used prudently. As I have said
before, this Committee must ensure that American taxpayer
dollars are safeguarded and protected.
I look forward to the testimony of our witnesses today and
thank them for joining us. It is my hope that with your voices,
we can take the American dream, put it back into play, and
return to a pro-growth economy, rather than the destructive
pro-regulation path we are on now. Advancing all small business
interests must continue to be a priority of this Committee.
Madam Chair, with that I yield back.
Chairwoman VELAZQUEZ. Thank you, Mr. Luetkemeyer. The
gentleman yields back.
I would like to take a moment to explain how this hearing
will proceed. Each witness will have 5 minutes to provide a
statement, and each Committee Member will have 5 minutes for
questions. Please ensure that your microphone is on when you
begin speaking and that you return to mute when finished.
With that, I would now like to introduce our witnesses.
Our first witness is Mr. David Kallick, Deputy Director of
the Fiscal Policy Institute and Director of the institute's
immigration research. He is the author of numerous studies of
the economic and fiscal aspect of immigration at the national,
state, and local level. In addition to his work at the Fiscal
Policy Institute, he is a Visiting Assistant Professor at the
Pratt Institute's Graduate School for City and Regional
Planning.
Welcome, Mr. Kallick.
Our second witness is Mr. Daniel Fitzgerald, who works for
Southwestern Community College as the Acting Regional Director
for the San Diego Imperial SBDC Regional Network. He also
oversees the San Diego and Imperial Women's Business Center and
is the Fiscal Agent for the California Women's Business Center
Network. For over 20 years, Daniel has been a prominent fixture
in the small business communities of San Diego County and
Imperial County. His leadership has made a significant impact
on thousands of businesses and multiple industries throughout
the state of California. Welcome.
Our third witness is Ms. Jaja Chen. Ms. Chen is Co-Owner
and Chief of Strategic Initiatives and Business Partnerships of
Waco Cha, LLC, a bubble tea company based in Waco, Texas. She
is also a licensed clinical social worker supervisor
specializing in trauma, burnout, and perinatal mental health
through her private practice. She received both her Bachelor's
and Master of Social Work through the Diana Garland School of
Social Work at Baylor University. Welcome.
Now I would like to yield to our Ranking Member to
introduce our final witness.
Mr. LUETKEMEYER. Thank you, Madam Chair.
It is indeed my pleasure to introduce one of my
constituents from Fenton, Missouri, Mr. Jose Ponce, a very
successful real estate agent with Re/Max St. Louis Gold Homes
for over 19 years. As a successful Hispanic entrepreneur, Jose
serves as a mentor to young real estate agents and offers his
assistance to the Hispanic community through his bilingual
services. He continues to advocate for the St. Louis community
and business owners everywhere. He has been named a 30 under 30
recipient from the St. Louis Business Journal and has been
featured in several St. Louis Business Journals. In December
2016, he began the new owner of Re/Max Gold and currently has
five offices, 22 satellite offices, 66 agents, and a referral
company, Gold Realty, in which he oversees as president.
Outside of his business, Jose was a professional boxer and
continues to work with local fighters and co-owns Sweat Gym in
Clayton, Missouri.
Mr. Ponce, thank you for being with us today. I look
forward to your testimony. And I know as a small business owner
you are taking that same fighting spirit from your younger days
to your own business and to this Committee today. Thank you
very much.
And Madam Chair, I yield back.
Chairwoman VELAZQUEZ. Thank you.
Mr. Kallick, you are recognized for 5 minutes.
STATEMENTS OF DAVID DYSSEGAARD KALLICK, DIRECTOR OF IMMIGRATION
RESEARCH INITIATIVE, FISCAL POLICY INSTITUTE; DANIEL
FITZGERALD, ACTING REGIONAL DIRECTOR, SAN DIEGO & IMPERIAL
SMALL BUSINESS DEVELOPMENT CENTER (SBDC), NETWORK, SOUTHWESTERN
COMMUNITY COLLEGE; JAJA CHEN, CO-OWNER & CHIEF OF STRATEGIC
INITIATIVES & BUSINESS PARTNERSHIPS, WACO CHA, LLC; JOSE PONCE,
PRESIDENT, RE/MAX GOLD
STATEMENT OF DAVID DYSSEGAARD KALLICK
Mr. KALLICK. Thank you for the introduction, and thanks for
inviting me.
There are plenty of issues that are controversial about
immigrants, but one thing we can say with a great deal of
certainty is that immigrants are highly entrepreneurial. I am
going to talk today about a particular nexus, the immigrant
entrepreneurship, and the rebuilding of the U.S. economy after
their COVID pandemic.
What will America's Main Streets look like as we return to
living our lives without fear of COVID-19? Hopefully soon.
It is not hard to imagine two rather different scenarios.
On the one hand, a Main Street-centered rebuilding could pick
up on some of the innovations we have seen during the COVID
period: outdoor restaurants, expanded pedestrian areas, bike
paths that have transformed many downtowns and urban centers in
very positive ways. This scenario would entail Main Streets as
vibrant places where people meet, walk around, and poke into
locally owned stores and restaurants.
On the other hand, is I would say an equally likely
scenario that is much more centered on online and outskirts
rebuilding and leaves Main Streets relatively empty. That
scenario is centered around Amazon and other online retailers
selling us most of what we buy, big box stores drawing
customers away from Main Streets and towards the outskirts of
town, and restaurants that are franchised and look much the
same everywhere. To put it a little differently, once we can go
to stores and restaurants, what small businesses will be there
for us to go to?
Here is where immigrants come in. Immigrants are, in
general, more likely to be business owners but they are far
more likely to be owners of independent Main Street businesses,
the shops and services that are the backbones of neighborhoods
around the country.
In a report that the Fiscal Policy Institute published
together with the American Society/Council of the Americas, we
found that immigrants make up 16 percent of the labor force, 18
percent of small business owners, and 28 percent of Main Street
business owners. So that is a number you also heard from
Representative Velazquez. Twenty-eight percent of all of the
Main Street businesses around the country are owned by
immigrants.
Immigrants also play a big role in the growth of Main
Street businesses. There are 31 major metro areas where
immigrant business owners represent all of the net growth in
Main Street business ownership between 2000 and 2013. Among
them are New York, Chicago, Houston, or Washington metro areas.
Maybe no big surprise there. But there are also areas where
immigrants make up a smaller share of the overall population,
yet still make up all of the net gain in the number of Main
Street business owners. For example, Baltimore, Detroit,
Milwaukee, Pittsburgh, Birmingham, and Buffalo metro areas.
So, to some extent, I can make a prediction. I can predict
that, as in the past, immigrants will play a central role in
this revitalization of America's Main Streets after COVID.
But policy will matter. Immigrants faced extraordinary
challenges over this past year. They were more exposed to COVID
than the population overall, and immigrants got sick and died
in disproportionate numbers. The Paycheck Protection Program
(PPP) was the most important support for small businesses in
the pandemic recession, but it well known that people of color
and immigrants were far less likely to benefit from the PPP
loans. Industries and geographic areas where immigrants are
prevalent are very often the same as those that were hardest
hit by the pandemic recession.
So, as we build back--``build back better'', if you like--
Congress should be thinking about how to correct that imbalance
and nurture the growth that immigrant businesses have always
been a part of.
To name just one example, will help for a small business
depend on a relationship to a big bank or will businesses that
do their banking with a Community Development Finance
Institution also get aid? Or businesses that may not have a
banking relationship at all?
I am not here today to propose a fully fleshed-out view of
how the rebuilding can happen. But I would like to underline
what seems to me an important fork in the road ahead. One path
leads to a rebuilding that is centered around Main Streets.
Another is dominated by online shopping, big box stores,
chains, and franchises. All of these kinds of businesses have
their place, but it would be a pity, to my mind, if the big
boxes wind up with a bigger share of our economy than they
would have if it had not been for COVID.
Thank you for having me.
Chairwoman VELAZQUEZ. Thank you.
Now we recognize Mr. Fitzgerald for 5 minutes.
STATEMENT OF DANIEL FITZGERALD
Mr. FITZGERALD. Thank you. It is an honor to speak today on
a topic that is so very important to me.
Living and working along the US-Mexican border and in a
city of immigrants in San Diego, I have seen many times over
the entrepreneurial energy in recent migrants to the U.S. The
passion, creativity, and work ethic needed for successful
entrepreneurs is so very common in people who have fought to
come to the U.S. My name is Daniel Fitzgerald and I serve as
the acting regional director for the San Diego and Imperial
Small Business Development Center (SBDC) Network, hosted by
Southwestern Community College District. As one of the 62 SBDC
networks funded by the U.S. Small Business Administration, our
work in the southernmost part of California is to assist small
business owners to grow and to help entrepreneurs to start
their business. Of course over the past 13 plus months our work
has been primarily focused on helping small business owners
retain their business by accessing Federal, state, and local
disaster assistance. Beyond the capital assistance, a lot of
work has been to help small business owners navigate the
changing public health rules and still be able to reach their
customers.
The variety of COVID capital assistance programs has been
critical to the survivability of small business. However,
access to the programs was varied. In our region, two of the
largest barriers faced were confusion over the different
programs and access to information in their own language. Our
SBDC Network has the capacity to serve in over 15 different
languages. A significant portion of our team is fluent in
Spanish, but the other common languages include Arabic,
Vietnamese, Swahili, Korean, Farsi, Tagalog, Mandarin, and
Somali. Since the onset of the pandemic, our network has
provided over 2,000 hours of one-on-one counseling in a
language other than English. We have also provided many
webinars for PPP, EIDL, and state and local capital programs in
Spanish, Arabic, and other languages. This has been critical to
help businessowners access capital.
When the first PPP deadline was approaching last June, an
owner of a nail salon was put in contact with us. She primarily
speaks Vietnamese. One of our advisors went to her business,
discovered her email inbox was full and she had not been
receiving emails for 2 months. He worked with her to put
together her financial records, worked with a local lender, and
she was able to get her PPP loan. This is one of many examples
of the hands-on, in-language assistance we at the SBDC provide
to recent migrants during the pandemic.
Beyond the response and relief efforts the COVID-19
pandemic has necessitated, the San Diego and Imperial SBDC
Network has an ongoing commitment to supporting small
businessowners and entrepreneurs who are immigrants. For many
years, our programming has provided support, in particular for
small business owners from Latin America who primarily speak
Spanish.
Fernando Miramontes came to our SBDC in Imperial County, a
farming area that borders with Mexico. As a migrant from Mexico
and having been in trucking for many years, he wanted to start
his own transportation company. Working with our SBDC advisor
and Accion (now Accessity), a local non-profit lender, he was
able to complete his business plan, do the required legal
steps, and obtain capital to purchase a truck to start his
business. In 2018, thanks to additional funding from the State
of California and increased funding from the SBA, we were able
to expand our network of sub-awarded service centers from four
to eight. Two partners in particular were added to increase our
SBDC Network's reach into immigrant communities by awarding
service center contracts to both the Asian Business Association
of San Diego and the International Rescue Committee.
At the SBDC, we strive to provide both linguistically and
culturally correct training and counseling. Besides providing
assistance in the preferred language of the client, our SBDC
advisors also base assistance in knowledge and understanding of
the business environment and regulations in the country of
origin. For example, an SBDC advisor helping an entrepreneur
start, helps them understand and navigate the roles of
different governmental entities in the U.S., such as how the
county governs health codes, the state governs sales tax, and
the city will provide a business license.
Business owner Naw Say Phaw came to San Diego in 2014 as a
refugee from Malaysia. Upon resettling in San Diego, Naw Say
wanted to start her own business but had no previous experience
and was also unsure of the various licenses, permits and
regulations required on the local and state levels. IRC came to
the international rescue community SBDC for help, and after
receiving assistance, including a small loan, AYA Mini Market
was launched.
A major program at the San Diego and Imperial SBDC Network
is assisting entrepreneurs to start in-home childcare centers
and also to support childcare businesses to expand. The SBDC
provides extensive childcare startup training, helping
primarily women to navigate the state rules to open a childcare
center, then to work with local organizations who provide
vouchers for childcare for working people in obtaining clients.
These childcare providers support the community not just by
having a business but providing critical childcare for working
parents by someone who is from their own community, speaks
their native language, and follows their cultural norms.
Today, the SBDC programs also work to help the childcare
businesses expand, including a program with the San Diego and
Imperial Women's Business Center and Southwestern College's
Family Studies department. And the SBDC works to help the
businesses develop into larger childcare centers, including
Sarah and Rafat Illaian who worked with our North San Diego
SBDC to obtain a $250,000 SBA-backed loan.
From childcare, to restaurants, to the Internet of things,
the immigrant entrepreneur and small business owner is critical
to current and future of our small business ecosystem. As our
economy comes back from the COVID-19 pandemic, the passion,
hard work, and creativity of our immigrant communities can and
will play a critical part to helping our recovery to be
inclusive and even better. Thank you.
Chairwoman VELAZQUEZ. Thank you, Mr. Daniel Fitzgerald.
Now we recognize Ms. Chen for 5 minutes.
STATEMENT OF JAJA CHEN
Ms. CHEN. Good afternoon, Chairwoman Representative
Velazquez, Ranking Member Luetkemeyer, and distinguished
members of the Committee on Small Business. Thank you for the
honor providing testimony before the House Committee on Small
Business today.
My name is Jaja Chen and I am here today on behalf of my
small business, Waco Cha, representing the over 3.4 million
immigrant-owned businesses in the U.S., approximately 2 million
of which are owned by an Asian American Pacific Islander
(AAPI). I am a daughter of Taiwanese immigrants. My parents are
from a small farm town on the East Coast of Hualian. My parents
and ancestors are Hakka Chinese, HakkaYin, in which the literal
translation means guest families. I come from a line of Hakka
farmers, educators, and business owners that worked hard and
moved across lands as guest people to pave the pathway for what
we do today.
As a child, I remember going to Asian supermarkets in
Oklahoma City with my mom to help her find ingredients to
prepare Taiwanese dishes. I observed how to make boba tea,
dumplings, and other delicious food at home. At the age of 13,
I moved to China with my parents as they returned overseas to
work and I completed high school in Taiwan and eventually moved
to Waco, Texas for college. My husband Devin Li, an immigrant
first-generation from Guangzhou, China, and I met at Baylor
University. After I completed school, we got married and
settled in Waco due to job opportunities, I as a social worker
and Devin as an engineering high school teacher. Throughout our
time in Waco post-graduation, we enjoyed getting involved in
the downtown community by supporting local small businesses.
Devin's students at a local Waco ISD high school, the majority
of whom identify as Hispanic or Black, often voiced feelings of
not belonging and thoughts of not being able to see
representation of their cultures within downtown development.
As immigrants and children of Chinese and Taiwanese
immigrants, Devin and I both resonate with this experience. In
fact, we would often drive on weekends to Dallas or Austin to
stop by an Asian grocery store, similar to what I did as a
child with my mom, and we hoped for Waco to one day have an
authentic boba tea cafe. Well, rather than hoping for this to
one day happen, we were inspired to start a business that
celebrates diversity and cultures. We opened our Saturday
morning Waco Cha popup tent in summer of 2018. That first year
was filled with time spent educating our community about boba
and Taiwanese and Chinese culture. We even had one individual
come up to us yelling that we are not truly Texan and spit out
the samples that we offered them.
After 1 year of popups, we upgraded from the tent to our
mobile tea truck, and then we grew our first storefront this
past year in downtown Waco alongside an additional launch of
our Chinese dumpling food concept in the midst of the COVID-19
pandemic. In fact, the week that our boba tea shop was cleared
by the Health Department to open, was the week that Waco's
shelter-in-place order was enacted. During the early months of
the pandemic, we had to quickly pivot our business. We delayed
our new storefront opening for about 3 months and took
precautionary steps by shutting down our operations when some
team members had potential COVID-19 exposures.
We also had many challenges navigating the SBA PPP process,
but despite this, our community and guests showed up to support
us by pre-purchasing gift cards to help us stay afloat, and
many also came regularly to show support as we used our mobile
tea truck to offer drinks.
Our values are lived out both within our team through the
ways we strive to represent our culture through our shop and
products and the ways we seek to hire diverse team members. Our
culture values hospitality and that really leads us to find
deep joy in developing business partnerships. In fact, one of
my greatest joys this past year in our community work was
partnering with the NAACP to host nonpartisan voter
registration booths on-site at our boba tea shop.
As we continue growing in profit, we are also seeking to
give back to local nonprofits around us, and this has included
contributing portions of our profits recently to support
nonprofit funds that benefit the AAPI community, particularly
with the rise of anti-Asian hate crimes within our nation. We
now have 19 team members on staff and look forward to
continuing to grow our team as we open our second boba tea shop
in downtown Temple, Texas this upcoming year.
I am thankful to the House of Representatives and Committee
members as you continue to highlight the gift of immigration,
particularly as we recover from the COVID-19. Our lives in
America are enriched and our economy is stronger when we
celebrate the diverse and rich perspectives, stories, and
experiences of immigrants. Thank you.
Chairwoman VELAZQUEZ. Thank you, Ms. Chen.
Now we recognize Mr. Ponce for 5 minutes.
Mr. Ponce, you may need to unmute.
STATEMENT OF JOSE PONCE
Mr. PONCE. Thank you, Madam Chair.
My name is Jose Ponce, an entrepreneur from the St. Louis
region. I am honored to be before you and this Committee today
to speak about the challenges and opportunities in the Hispanic
entrepreneur community.
I have invested and owned various businesses in the last 20
years. I am proud to be an Hispanic entrepreneur. Hispanic
entrepreneurs business ownership has surged in the past decade,
outpacing any other ethnic group. According to the new study
from the Stanford Latino Entrepreneur Initiative in 2020, this
study shows that in the pat 10 years, Latino business owners
have grown 34 percent compared to 1 percent for all other
owners in the United States.
This is good news and bad news in these numbers. As a
culture, Hispanics gravitate toward starting businesses and
being their own boss, creating a legacy for their families. But
there are strong barriers for growth. One extreme barrier is
discrimination when it comes to banks and lending. The recent
study in 2020 that found that 20 percent of Latino-owned
businesses that applied to national banks for loans over
$100,000 received funding, compared with 50 percent of White-
owned businesses. The discrepancy was even larger when looking
at firms with annual revenues over $1 million who were
requesting similar-size loans. Twenty-nine percent of Latino-
owned businesses go the loans versus 76 percent of White-owned
businesses. Even after controlling for business performance
measures, the odds of loan approval from national banks were 60
percent lower for Latino-owned businesses.
I have personally experienced this when I sought funding
from banks. For example, when I was purchasing my real estate
company, I had to personally fund $350,000 of the $500,000
purchase price. Even with my 20 years of experience, there has
been times that I was not able to acquire bigger opportunities
because of the barriers of bank funding.
I believe one problem may be the continued decline of
independent banks who many feel better understand the needs of
the local communities. The independent banks simply have a
better pulse on what is happening in their local community.
Loans from the bigger banks tend to be more concentrated on
high technology rather than traditional business. (That is on
Bates and Bradford, 2007.)
The Stanford study makes an especially important point. The
study states, ``Latinos are going to be one-third of the
population in the future and their success will have an
enormous impact on the future economic success of the United
States. If the Latino portion of the economy is not more
developed economically, the whole economy will suffer.''
So how do we harness the power of the immigrant? Maybe it
is a better awareness of how the government can assist this
community, such as the Small Business Administration as stated
earlier. Possibly, the Hispanic community could be educated on
how to leverage the existing Federal opportunity zones.
Additionally, I believe the large banks need to be better
educated on the benefits of investing with Hispanic
entrepreneurs and their busineses. Relationships between my
fellow Hispanic entrepreneurs and traditional banks need to be
strengthened. The old saying goes, ``People do business with
people they know and like.''
We have proven we are a community of hardworking
entrepreneurs. There are about 400,000 Latino-owned employer
businesses in the United States before the panic. They
generated nearly $500 billion in annual revenue and employed
3.4 million people. We want the same equal opportunity to grow
our businesses and have access to capital when we have shown we
have experience to take on bigger opportunities that will fuel
the U.S. economic engine. We have the ``can do'' American
spirit that historically built this country.
Madam Chair, it has been an honor to speak to this
Committee today. Thank you.
Chairwoman VELAZQUEZ. Thank you, Mr. Ponce.
Now I will begin by recognizing myself for 5 minutes. Thank
you so much to all the witnesses for your compelling stories
and sharing the important role that immigrants play in our
economy.
Mr. Kallick, I would like to address my first question to
you.
Immigrant-owned businesses were particularly important in
the recovery from the Great Recession, adding more than 200,000
jobs, thousands of small businesses between the period of 2007
to 2014, a period when the economy was shedding jobs. They may
not have fared as well given the nature of the COVID-19
pandemic. How do we ensure these businesses are fully utilized
for this recovery as well?
Mr. KALLICK. Thank you for the question.
Yeah, I mean, I think it is instructive to think about the
comparison to what happened after the Great Recession where I
would say I think it is right that the immigrant small
businesses played a big role in the revitalization after the
Great Recession. I think immigrants and people of color were
also devastated during that recession by home laws. And so I
think there is a real danger to my mind that the destruction of
capital gains and of people's wealth, people of color,
immigrants during the Great Recession, they lost their homes.
And during this recession they could be losing their
businesses. So I think we really need to pay a lot of attention
to I think, you know, not the question of whether there is some
special program but how do we make sure that people are not
excluded from the rebuilding process as they have been already
in various ways.
I think we heard a little bit of a thread going through
everything is the question of access to capital. And how do you
make sure that it is not just immigrants relying on big banks
where they may not have very good relationships to be able to
get business loans.
Chairwoman VELAZQUEZ. Thank you, Mr. Kallick.
Ms. Chen, I see you and I hear you. I have the honor of
representing two Chinatowns in my district out of three here in
New York City. It is no secret that the public rhetoric around
the COVID-19 pandemic and China have fueled anti-Asian American
hate incidents. Have you or anyone you know experienced this
firsthand? Has it made you fear for the safety of your business
or your customers?
Ms. CHEN. Thank you, Chairwoman Velazquez, for that
question. In fact, last night I was at a protest on campus at
Baylor University because just recently a student near campus
was physically assaulted and attacked and had racial slurs
spoken against them near campus. And so I was standing with the
AAPI community last night at this protest. I, myself,
personally have not experienced the physical attacks against me
but I do have fears or concerns regarding attacks potentially
impacting my team members or even my own business, especially
as we are more outspoken and continue to speak up and stand
against this issue.
Chairwoman VELAZQUEZ. Any suggestions from your end that we
need to do in order to tone down this hateful rhetoric and
build better relationships with the AAPI community?
Ms. CHEN. Well, you know, outside of my work as a boba tea
entrepreneur, I am a trauma therapist and social worker. And so
with the rise of all the hate crimes, I personally have even
seen a rise of communities within the AAPI community seeking
therapy. And so I know that there is such a mass need for
mental health support and accessible support. And so I urge
Congress to continue funding advocacy centers or even local
community mental health centers that provide multilingual,
multicultural services. And that is particularly the case in
places like Waco where it is a bit more rural and so there is
less funding opportunities, you know, in our community for
accessible mental health.
And in addition, I think it just starts with the
leadership. Right? It is important as leaders for us to stand
and to speak against anti-Asian hate crimes. And it really
starts at the leadership setting that tone with not just
speaking about the importance of being against these hate
crimes but also having tangible policies or even tangible
evidence of, okay, this is what we are going to do beyond----
Chairwoman VELAZQUEZ. Thank you. I have seen the economic
impact that this has had in our communities. I toured Chinatown
communities in Manhattan, lower Manhattan and in Brooklyn, and
saw how in the beginning they were closing their doors after
5:00 because they were really afraid of their lives and the
safety of their customers. We need to do better.
Mr. Fitzgerald, have you come into any interactions with
community navigators that we included as part of the PPP and
EIDL and if so, has that played any role in providing
information to the businesses?
Mr. FITZGERALD. Absolutely. That was why a number of years
ago we expanded our network of service centers to include the
International Rescue Committee, which is a refugee resettlement
agency, which is very heavily embedded in communities in San
Diego, the Asian Business Association of San Diego, and of
course at Southwestern College, we are an Hispanic-serving
institution and worked heavily in those communities. That is
why language services and being very intentional with who is
our staff and working that really they are able to be able to
work within the community, be part of the community, and to be
able to provide those services.
Chairwoman VELAZQUEZ. Thank you. My time has now expired.
The Ranking Member, Mr. Luetkemeyer, is recognized for 5
minutes.
Mr. LUETKEMEYER. Thank you, Madam Chair.
I would like to start with Mr. Ponce. You know, Mr. Kallick
made the comment a minute ago that policy will matter as we
rebuild the economy here. And I think along that line,
President Biden has pledged to repeal the Trump
administration's pro-business Tax Cuts and Jobs Act. The
administration lowered taxes and reduced regulatory environment
I believe generated a small business economy that was filled
with optimism and confidence. Small business owners were
investing in their employees, their companies, and their
communities. As a result, the Nation saw historic levels of
unemployment and job creation.
As a small business owner, can you give me your thoughts on
the Biden tax plan?
Mr. PONCE. Yes, thank you, Representative Luetkemeyer.
You know, it is my understanding that there is going to be
substantial cuts coming down the line and the increase in
taxes. You know, I can speak freely of my current economic view
here locally in our local market. The reality is what we had
before within the Trump administration, it allowed us to really
excel and grow in our diverse market being that we are in the
Midwest. But right now as we stand I feel that we need to
really reimplement or rethink through that process of allowing
small business owners the opportunities and the capabilities to
grow and succeed with the financial opportunities that are out
there that everyone else is able to obtain. Thank you.
Mr. LUETKEMEYER. To allow you to keep your own dollars with
tax cuts and be able to invest those as you saw fit, either in,
you know, buying another business or expanding your business,
more inventory, hiring more people, that allowed you to grow
your business as you saw fit and improve the entire community
with you investing in and growing your business I would say. Is
that a fair statement?
Mr. PONCE. That is a very fair statement. It gives me the
flexibility and it would give us really the flexibility to grow
and continue to grow to the market share that we want to
tackle.
Mr. LUETKEMEYER. So if those taxes are raised and you wind
up with increased regulation, it is going to suck money out of
your operating capital, out of your operating money to be able
to do those things and it is going to restrict your ability to
grow I would assume. Is that correct?
Mr. PONCE. It would definitely limit our growth. That is
correct, Representative Luetkemeyer.
Mr. LUETKEMEYER. Something else that sort of really piqued
my interest here is I serve on the Financial Services Committee
as well. I am the Ranking Member on Financial Institutions,
which oversees the banks and credit unions and those folks. And
so when you talked about the inability of big banks to really
address the immigrants' basic needs for capital, that really
struck a chord with me because I am concerned the numbers will
bear out, you made the point about community banks. You know,
your local bank that is independently owned and run and
basically they invest in the community. And as a community
grows, they grow, versus the big bank which has a completely
different business model. The numbers bear out that the smaller
banks actually make more, significantly more business models
out of their deposit base than big banks do. So it did not
surprise me when you made that comment, especially when it
comes to beginning, you know, startup businesses, the capital.
The big banks will be glad to take the business once it is off
and running but it is a little difficult to get that startup
capital.
So I guess my question to you is, we have got some concerns
with the small business program because of some reports that we
are getting from the IG and the Government Accountability
Office of some problems there with regards to our ability to
provide oversight. And I am considering looking at having the
banks do more of that.
So in your experience with the banks with regard, even to
SBA programs, were the small community banks able to deliver on
those dollars, on those programs in a way that it was giving
you the information you needed and be able to give you the
dollars that you needed to be able to get through your startup
and getting going through the PPP program, things like that?
Mr. PONCE. Yes, Representative Luetkemeyer. The
opportunities were given to me by the smaller, local banking
institution that actually understood and really read through my
experience and my vision of what I wanted to do with our
company. They were not 100 percent onboard completely with
funding. I had to, again, for example, in the acquisition of
this firm in 2016, you know, they gave me some but not all.
They wanted me to step up to the plate and put my own skin in
the game and it just turned out that I had to put a substantial
amount more skin in the game than the bank was willing to savor
on my end. But they were definitely much more receptive versus
the bigger branch banking institutions out there. They really
looked at me as an individual, who I am and what I envisioned
of our operation but the bigger banks did not give me the time
nor the availability to sit down and understand exactly what I
wanted to do with our organization.
Mr. LUETKEMEYER. Thank you for that. My time is about up.
Mr. Fitzgerald, in a world where you saw SBA as a guarantor
of loans and grants versus the direct lending or direct
grantee, how would you see the SBDC's role in that? Is that
something you could see expand and be an initiator of those
loans, for instance, or those grants, for instance?
Mr. FITZGERALD. What we do is mainly help people navigate
the lending process, complete their applications, complete
their business plans so that way it is a much easier process
for the lender to be able to underwrite and help them
understand what that particular process is.
Mr. LUETKEMEYER. Could you see it expand a role for you
though in that regard?
Mr. FITZGERALD. Always, because that is really what we
focus on is access to capital in a lot of ways.
Chairwoman VELAZQUEZ. The gentleman's time has expired.
Mr. LUETKEMEYER. Thank you, Madam Chair.
Chairwoman VELAZQUEZ. Now we recognize the gentleman from
Colorado, Mr. Crow, for 5 minutes.
Mr. CROW. Thank you, Madam Chair. And thank you to all the
witnesses. This is an extremely important hearing for me in
particular. I represent the most diverse district in the state
of Colorado, one of the most divers in the Nation where we are
home to many immigrants and refugees. I have over 160 languages
spoken in my district and about 20 percent of my constituents
were actually born outside of the United States. And the
comment earlier by several of you that are immigrants and
refugees, entrepreneurs, resonates very strongly with me
because I see so many of those folks come here and they start
businesses--restaurants, bakeries. You know, the mom and pop
shops on the corner are oftentimes run by immigrants and
refuges and it really is kind of like the lifeblood of our
economy but actually makes our community a lot more stronger
and vibrant and a great place to live. So it is an extremely
important topic for me.
One issue that I would love you all to touch on, and this
goes back to the access to capital which, of course, is a
common thread throughout much of this. But, you know, I have
folks who had been business owners for decades back where they
lived before they came to the United States, and then when they
immigrated here or sought refugee status here, they are
starting from scratch because their credit histories, their
credit ratings do not translate back from where they ran
businesses to where they are now. So they are starting from
scratch and it is really a tough thing for them to grow that.
Can you touch on, you know, how can we address that issue?
How can we be creative and innovative and give some folks some
credit for sometimes decades of business ownership so they are
not starting from ground zero again?
Maybe start with Mr. Kallick and then go to Mr. Daniel
Fitzgerald.
Mr. KALLICK. Sure. Thanks for raising that.
So the report that I was referring to before is the report
we did about immigrant Main Street businesses. And one of the
questions we looked at was exactly that issue of what makes for
better lending practices.
One of the things that I thought was striking and surprised
me in some ways as we did the research was the issue seemed to
me not so much about widening the doors, sort of letting the
people qualify more, but it was more about, so in other words,
like not providing different terms but it was more about how do
you make sure that the lenders can have the time to really
evaluate the potential business, you know, borrowers? And so I
think, you know, the more that you can do to support community
developing finance institutions, community development
corporations, sort of people who can have individual
relationships with business owners and, you know, figure out
who is a good credit risk. It is not doing anybody a favor if
you lend people money and they cannot pay it back. Right? That
gets them in trouble but it also gets the bank or the lender in
trouble. So you really do want to say how do you evaluate
somebody's credit worthiness? But I think what you are pointing
out is that immigrants and refugees in particular, you know,
the usual ways that we do that may not fit very well. So just
being able to look at somebody's credit history is not a very
good indicator of that. So I would say invest the time really
of the loan officers. And, I mean, I guess if I could say one
more thing about that I would say how do you make sure that you
are really connecting people with the kinds of business
services that help them to grow as they are doing the
borrowing?
Mr. CROW. Thank you.
Mr. Fitzgerald, a short answer, because I would like to get
Ms. Chen's view on that as well.
Mr. FITZGERALD. Absolutely. I just want to echo what Mr.
Kallick was speaking about and the need for microlenders and
very small business lenders. The continuation of the SBA
Microlending program is critical. But also looking at early
loans that are based on social credit which are kind of credit-
building loans which are very, very small are critical as well.
Mr. CROW. Thank you.
Ms. Chen, any thoughts on this?
Ms. CHEN. Yes. Because we were underfunded from the PPP, we
actually relied heavily on community support and had
opportunities to apply through a local nonprofit for a KIVA
Microfinance Loan, actually. That was pretty recently. And so I
think utilizing microfinancing can actually be very critical
for small businesses like ourselves, especially programs like
KIVA where there is 0 percent interest and it does not rely on
your credit to be able to access. Instead, it is focusing more
on social credit trustworthiness.
Mr. CROW. Thank you. I appreciate very much that view and
for everyone's hard work.
I yield back, Madam Chair.
Chairwoman VELAZQUEZ. Thank you. The gentleman yields back.
Now we recognize the Vice Ranking Member Mr. Williams from
Texas for 5 minutes.
Mr. WILLIAMS. Thank you, Madam Chair. And thank you to the
witnesses. And thank you to our ranking Chairman for this.
As the owner of auto dealerships in Texas and a small
business owner, I know firsthand how devastating President
Biden's corporate tax increase would be on Main Street America.
You know, raising taxes will only cause businesses to invest
less in operations, to hire few employees. They will cut
employees so they can save money to pay the increase in taxes.
And I know when we cut taxes under the Trump administration it
caused the labor market to tighten which was a good thing. We
had to compete to attract workers which led to higher wages for
all employees.
So I know this story is not unique to just the car
business. The bottom line is all small businesses, regardless
of ethnicity, will be affected with any increase in the
corporate tax rate. It is a disaster when you raise taxes.
So Mr. Ponce, as someone in the real estate market, can you
explain--you have done a good job so far--of how President
Biden's tax increase would affect your business and doing away
with things like the like-kind exchange, treating capital gains
as ordinary income, inflation, all that is going to be affected
with you. How is it going to affect your business?
Mr. PONCE. Thank you, Representative Williams.
I believe as stated earlier with Representative
Luetkemeyer, if the tax increase does assess itself, I feel
that it will make it very difficult for us to sustain our
business due to the fact that we would have to use literally
our own financial resources and not have the opportunity to
really bridge the assistance of bigger banks or anything of
that nature to assist us and continue to grow. But here in our
local market there are too may weighing factors in my honest
opinion of how it is going to affect us. And the major one is
the growth. It is allowing us to continue to grow as a company.
And not only just in the real estate market but I would assert
to say, an strongly assert to say that in any type of business
entity, if they increase taxes it will definitely hinder our
potential for growth and our opportunity to really generate
potential future revenue for our industry.
Mr. WILLIAMS. Thank you.
So what is good for small business is good for America. I
believe that. Most of us do.
We need to stop focusing on what increased government
spending can do for Main Street America and shift our efforts
to building an economy that incentivizes entrepreneurship and
grows what I call the real economy, small business owners and
not the government's economy.
So Mr. Fitzgerald, you mentioned the Small Business
Development Centers offer assistance to people who are looking
to start or expand their business. With COVID-19 bringing many
unique challenges for businesses to confront moving forward, I
want to ensure that we are using these resources as effectively
as possible. So can you briefly talk about some of the ways the
SBDCs should be changing the way they assist small businesses
as we are regaining normalcy back in Texas. We are back to
normal in Texas and we should get America that way.
Mr. FITZGERALD. So right now we are still, of course,
continuing to focus on the relief programs. The last month of
PPP is coming up but we are already beginning to see a strong
increase in entrepreneurship and business starts. So we are
ramping up again our programs on how to start a business, how
we can go to those programs, including newly expanding a lot on
childcare businesses, as well as foodservice businesses. In
addition, we have really continued to grow our services around
the innovation economy here in San Diego. We have a very strong
life science sector and that has continued to expand at which a
number of immigrants certainly work in that sector as well. And
so basically getting back to the core services that we were
providing pre-pandemic is what we need to do very, very soon as
the relief programs begin to expire.
Mr. WILLIAMS. Okay. So when the pandemic began, large
stores were able to remain open while mom and pop shops were
forced to shut their doors. I was very opposed to these orders
since the government should never pick winners and losers and
be deciding what businesses are essential and ones that are not
and the ones that can operate. Small franchise businesses of
which I am that and the mom and pop stores are the strength of
this country and of Main Street.
So Mr. Kallick, in your testimony you talked about some of
the long-term effects of the COVID lockdowns if we do not
revitalize Main Street America.
Can you go into a little more detail for the people
listening today on the long-term effects of COVID-19, how it
could shift the competitive landscape of the economy?
Mr. KALLICK. Sure. Thanks for the question. I think my
concern is that big businesses and some of the online
businesses may squeeze out the more locally oriented business.
I would say that it strikes me as unlikely. We do not know what
the tax proposals are in any detail but it is unlikely that the
small businesses we are talking about here are going to see
really significant impacts from those. They are aimed largely
at wealthy people and corporations that are making big profits.
And I think what is really important is creating a climate of
confidence in downtown growth. I think people need to be able
to feel like they are, first of all, safe. They can trust the
government to tell them when it is okay and when they can
really go safely without feeling that there is a health risk.
And I think they have to feel like there is money in the
economy to be able to support the reopening and risking of
small businesses.
Chairwoman VELAZQUEZ. The gentleman's time has expired.
Now we recognize the gentleman from Minnesota, Mr. Phillips
for 5 minutes.
Mr. PHILLIPS. Thank you, Madam Chair. And thank you to
today's witnesses. I am quite encouraged that our Committee is
having this conversation today because most of us have
foremothers and forefathers who came to America, bringing the
very same ambitions and seeking the very same opportunities and
possibilities that today's immigrants seek for themselves and
their families. And I am one of those people. My great, great
grandparents came to the United States in the late 19th
century, built successful businesses, and perhaps most
importantly, shared that success, and we continue to share that
success with the very communities that made it possible.
As you all know, some of America's most innovative and
impactful enterprises were founded by immigrants. Even today,
Moderna, one of the companies leading the way in the COVID-19
vaccine was founded by an immigrant. eBay introduced the entire
world to ecommerce founded by immigrants. Tesla and SpaceX,
writing history in the energy and automobile and space sectors,
founded by an immigrant. The story of how these companies rose
to their position is really a uniquely American story and there
are stories of the United States welcoming talent. I stress
welcoming talent from all over the world. And that is why I am
a significant advocate and supporter of proposals throughout
Congress to afford more visas to foreign-born entrepreneurs who
wish to develop their companies in the U.S., provide jobs to
Americans, and improve communities.
To my colleagues who are arguing for lower taxes, we all
want lower taxes. We also need better roads and bridges and
airports and electrical grid. We need a trained workforce. We
need healthcare for human beings so they can be productive
employees. And I ask all of us to unify behind the investments
we need to make and ways to pay for them.
Mr. Kallick, I will start with you. In your research
relative to immigration, what impact have you found that
immigrant entrepreneurs have had on job growth and creation in
the United States?
Mr. KALLICK. Well, so certainly as you point out, I mean,
very significant in the overall economy. I think one
particularly interesting thing from our research was the sort
of bread and butter of economic growth which is that Main
Street small business growth and the way in which immigrants
have often found kind of niches that are unexplored or
undeveloped within the economy.
I think something that was particularly surprising in our
research was how important that was in some cities that had
seen overall economic decline--Detroit, Pittsburgh, Baltimore,
Cincinnati--where immigrants were filling in those niches and
helping the local neighborhoods to grow. And I think that is in
some ways the story of some of the bigger metro areas as well
but I would say it is more striking in some ways and maybe more
surprising in some of those smaller metro areas.
Mr. PHILLIPS. I should ask if there are risks to the U.S.
economy that we should be concerned about if Congress and the
White House do not take steps to increase the number of legal
immigrants in the United States.
Mr. Kallick or any of our other witnesses, I would welcome
your perspective on that question. Anybody? All right.
Mr. KALLICK. I am happy to say something. I am happy to say
something on it. I do not want to be the only one talking but I
mean, I think, sure. I mean, look, I do not think that endless
population growth is necessarily always and in every case a
good thing. But I think having population decline is a real
danger to the economy where we have in lots of cities, and we
have seen this. We have got a substantial amount of built
infrastructure that is going underutilized and if we do not
have people who can revitalize that and bring that back into
productive use I think you see a real loss to the overall
economy. And a number of the metro areas, a number of the
cities are just at that tipping point.
Within New York State--Buffalo, Syracuse, Rochester,
Albany--every time the census comes out people are looking to
see, you know, is there a population decline or a little bit of
finally population increase. And without immigration I think we
are not going to see that population increase. And similarly,
not the revitalization of these cities.
Mr. PHILLIPS. I can tell you in my business career there
are two ways to grow enteprises--either find new consumers at
home and/or new opportunities to market products abroad. Many
of you are familiar with [email protected]. They published a
report recently in collaboration with George Mason University,
that found that the U.S. risks losing its status as the world's
largest economy by 2030 if policymakers do not take steps to
expand legal immigration. That report, which I would like to
enter into the record, Madam Chair, found that current
population trends and immigration levels will lead to the U.S.
economy being only three-quarters of the size of China by 2050.
Chairwoman VELAZQUEZ. Without objection.
Mr. PHILLIPS. I am sorry?
Chairwoman VELAZQUEZ. Without objection.
Mr. PHILLIPS. Thank you.
And that influx of legal immigrants would help keep
entitlement programs, like Social Security and Medicare from
going insolvent, something that we surely could all agree on.
I do see my time is expiring, Madam Chair. I yield back and
thank you again to our witnesses for being with us today.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now we recognize the gentleman from Minnesota, Mr.
Hagedorn.
Mr. HAGEDORN. Thank you, Madam Chair. I appreciate the
opportunity, and thanks for holding this hearing.
I guess at the start I would say we have to always remember
the United States is the most generous country in the world
when it comes to legal immigration. We bring in over a million
people a year and I think many of us would like to see that
including merit-based immigration so we can have more people
that want to come here and fulfill the American dream and
continue this entrepreneurial spirit which flourishes in our
system of free enterprise. And I think at any point in our
history we look back and whether it is the Germans or the
Italians immigrating or people fleeing Communism in Cuba or
folks coming here for economic opportunity, whatever, folks
have been able to flourish in this system and we have to
maintain our system, rather than go towards socialism.
I see some of this up front. My wife, Jennifer, was born in
Korea. She was adopted by two great people in Minnesota at a
very young age and brought to our country. Now one of the ways
that she has fulfilled the American dream is she is a retail
small business owner. Her business is up in Congressman
Stauber's district. Congressman Stauber, of course, a member of
our Committee. And I think whether you are somebody that came
to America and started a business or you are somebody who has
been here many, many generations, we are all in the same boat.
And what we need to do is to make sure that we have a system
with good government that is going to allow people to have the
best opportunity possible in order to take their dreams and
ideas and turn them into something and keep growing. And that
means, you know, if you look back the last 4 years, we had that
in our economy and it was a good economy for small businesses
of any sort. We had tax reform, which was very successful. Less
regulations, and a lot of business owners will tell you that is
very important, particularly in the banking industry where you
are talking about where community bankers were wiped out
because of bad regulations coming out of Dodd-Frank.
And then you look at things like low-cost energy. Many
businesses thrive because they can keep their costs downward
and then trade deals like USMCA and others.
But then you kind of look at the other side of the coin,
bad government policies and how tough it can be on business. In
the state of Minnesota, I would like to associate myself with
Congressman Williams's statements about the lockdowns. In
Minnesota, we had lockdowns here where our governor used
emergency powers to basically pick winners and losers and
decide that the retail small business owners had to shut down
and the restaurants and everybody else but the big box stores
and the online only stores, they were wide open. And they were
getting all that business. On top of that in Minnesota, we had
businesses across the border at places like South Dakota, Iowa,
and Wisconsin, they were open. Our businesses were shut down.
Our people were hurt. They are still struggling with that to
this day and probably will into the years to come. That was not
good.
Another bad government policy, and this one comes from
Congress, this one comes from the national group. What is going
on with unemployment compensation and the way we were throwing
out benefits and money to people during this COVID has made it
so people literally do better staying at home. They make more
money than if they go to work. And if you talk to any business
owner across this country for the most part, big, small, or
otherwise, they are having a really tough time finding people
to work. And a lot of that is because of bad policies put
together by the Congress, by the president, and we have got to
stop that. We have to get back to where we have people getting
incentives to go back to work, get into the private sector, do
their jobs. Because we are going to have business literally
losing market share or going out of business because they just
cannot find a workforce, skilled or otherwise. So I am part of
those solutions in Congress. I hope we can all join together
and move that forward.
So Mr. Ponce, you are a small business owner. You have seen
some of this. I will just let you kind of respond to what I
have been saying.
Mr. PONCE. Thank you, Representative Hagedorn. You are 100
percent correct. As stated earlier by Representative
Luetkemeyer, in my bio, I also own a fitness facility in the
Clayton area here in the St. Louis market. And government, that
may be that it is currently seen in our area, did just that.
They unfortunately put us in a position where small businesses
were almost put out of extinction because of the way they
decided on who stays open and who does not. But the reality is
there has got to be some equal share or responsibility on all
sides, you know, from local government to national government.
And in my opinion, here on a local level there are many
obstacles that we still have to overcome.
To your point, Representative Hagedorn, in regards to the
unemployment and the people that are currently rather wanting
to stay home versus going back to their normal jobs, that now
that the opportunity is there they decide to stay home because
they make more money doing that instead of having to go to
work, there has got to be some clarification and there has got
to be some type of balance. You know, this government was built
on immigrants as everyone here on this panel and this Committee
is well aware of. And I am very thankful to say that I am one
of those that is trying to build my American dream here, but we
definitely need the support of local government to allow us to
continue to grow and not put us in positions where we have to
be challenged day to day on how to grow. Thank you.
Mr. HAGEDORN. Thank you. I appreciate your time.
Chairwoman VELAZQUEZ. The gentleman's time has expired.
Now we recognize the gentlelady from Illinois, Ms. Newman,
for 5 minutes.
Ms. NEWMAN. Well, thank you very much. Good afternoon,
everybody. So pleased to be here. Thank you, Chairwoman, and
thank you, Ranking Member Luetkemeyer.
So a couple of things for the record, and I think it is
important to say that I think we all have had Econ 101 and many
other econ classes so that we know that our economy only grows
when we have more people being productive. So limiting the
number of people in this country is really a bad idea because
we will not be as productive. Our GDP will never grow. So that
is one.
Two is that I just want to be clear for the record in
writing that we did not pick losers and winners. What we did do
was provide science and we provided great outline as to how
people can stay safe as they keep their businesses open. And so
they can make choices for themselves, their staff, and their
customers. So pleased that our government did that and
continues to do that. And I am so pleased small business is
coming back.
As a former small business owner and someone that has a
strong advisory council in my district that I meet with once a
month, I hear about their challenges. And I am incredibly
concerned.
So a few things. I do understand that President Biden's
plan does not include small businesses all the way down with
the 21 to 28 percent or whatever it might be. That most of the
businesses that we are talking about here would not be affected
by the tax increase. So let's get that out there. We will learn
more as the weeks go on.
I also want to ask Mr. Ponce and Ms. Chen a couple of
direct questions about their businesses because I have asked
this of hundreds of small businesses in my district and I keep
on getting two answers. So I will tell you what the answers are
but tell me if you are hearing something differently.
So the first question for both of you is, are you both
having trouble with hiring folks? Meaning finding folks to work
in your businesses.
And I will go to Ms. Chen first.
Ms. CHEN. So thank you for that question. Specifically for
us, we are not having trouble hiring. In fact, we have had a
lot of individuals eager to work and even get off of
unemployment, desiring to go back into the workforce and are
eager to serve. And I specifically am in the food and beverage
industry in particular. And I think part of why a lot of folks
have wanted to work for us is because we have ensured that our
company is going to be transparent about safety and even
continued requiring our customers, along with our staff to wear
masks despite the state of Texas mandates that have lifted
those.
Ms. NEWMAN. Right. Good. Well, I am so pleased to hear
that. And it is funny. When I do hear that there are workforce
problems, it is usually attached to childcare. So I think we
are hearing consistent things, is that people are dying to come
back if they do not have childcare concerns, but when they have
childcare concerns they are having trouble getting back to work
because there is no where to put their children right now so
that they can work. So thank you for your answer.
And then Mr. Ponce, I will ask you the same thing. Are you
having labor workforce recruitment issues or are you not?
Mr. PONCE. Thank you for that question, Representative
Newman.
As stated earlier, within my industry, we are a little bit
of a unique industry. We are, obviously, in the real estate
industry, so we are not having that issue at the very moment,
but I am involved in other businesses that my fellow colleague
and entrepreneurs are having issues finding and hiring people
due to the fact of the local government's issuance on how they
are wanting to return back to work but do not choose to because
of the unemployment benefits that they are receiving.
Ms. NEWMAN. Okay. So you have not heard from any of them
that potentially it was childcare related.
And then I have one more question for you.
Mr. PONCE. Yes. This is mainly related to the restaurant
industry and the fitness industry that I am also well aware of
in our local market.
Ms. NEWMAN. Okay, I am sorry. So are you saying that the
employees that are not coming back, it is not due to the fact
that they do not have the ability to have their children cared
for while they are at work?
Mr. PONCE. No, ma' am. That is correct.
Ms. NEWMAN. Okay. Thank you for that answer.
And then my last question has to do with livable wage. Do
you think that it is interesting that you have just identified
that, in fact, people are not coming back because they are
getting paid more potentially by their current subsidies. Do
you think that is interesting in light of the fact that they
are looking at going back to a low wage that they cannot live
on or they are temporarily getting a lift and taking advantage
of that until they can go back?
Mr. PONCE. I can confidently say, Representative Newman,
that within our local market, our local district, there is a
lot of individuals that are taking advantage of the benefits
right now, the subsidies that are given to them that gives them
the option to decide not to want to be gainfully employed but
much rather want to be under the unemployment benefits plan
because the minimum wage probably does not fare out to equate
to what they are getting now. There are plenty of businesses
here, local businesses that have signs on their windows looking
for, in desperateness looking for individuals, even calling
back previous employee that unfortunately were had to let go
due to the fact that when the quarantine and the city getting
involved in closing small businesses, it made a huge impact to
these individuals that decided to take it. So.
Chairwoman VELAZQUEZ. Time has expired.
Mr. PONCE. Thank you.
Chairwoman VELAZQUEZ. The gentlelady from California, Ms.
Kim, is recognized for 5 minutes.
You need to unmute, Ms. Kim. We cannot hear you.
We will go to Mr. Stauber and then go back to Ms. Kim.
The gentleman.
Mr. STAUBER. One second, Madam Chair. I am trying to get my
speaker up here.
Thank you, Madam Chair.
You know, first off, thanks for the witnesses being here.
And my questions are for Mr. Ponce. First, I want to
acknowledge that in your testimony you highlighted that lending
was a huge barrier to entry. Are there other hurdles such as
minimum wage increase or new taxes that worry entrepreneurs, as
they try to overcome the effects of this pandemic?
Mr. PONCE. Thank you, Representative Stauber.
I feel strongly that the challenges are banking and lending
for us. And also in the imminent future, the tax increase will
definitely be a major catastrophe on our end to continue to
succeed in our growth and our industry. Yes.
Mr. STAUBER. And then also in your testimony you highlight
the importance of educating our communities of the assistance
the government provides for entrepreneurs through the SBA. And
can you speak more specifically about your experience starting
your business, and did you know of SBA assistance or work with
the SBA resource partners such as the SBDCs?
Mr. PONCE. Thank you for that question, Representative
Stauber. It was in my past experience and I was unaware of
these opportunities that the local governments and national
governments were offering. I was aware of the SBA initiatives
and the programs that they had to offer but I did not have the
direction nor the know how to be able to get pointed in that
direction. And I speak highly within our local market and that
is where I can really specialize my questions, or my answers,
rather. But in essence, to be very direct here, we lack
education within our community and the involvement of these
organizations for our communities. And that is where I feel
strongly that once we are aware of what opportunities are out
there for our businesses and our fellow entrepreneurs in the
Latino community, I can feel certain, being that I sit on the
board of the Hispanic Chamber of Commerce here locally in St.
Louis, I see this each and every day. And we try to guide now
more so now because of our past experience and our past
leadership that had to deal with the most difficult route
possible to gain a business of their own, now as we keep moving
forward there is obviously more opportunities out there that
the government allows us to research and know and advise to.
Now it is just bringing those people from our community to
those organizations. That is our challenge. Thank you.
Mr. STAUBER. So, Mr. Ponce, give us some advice on how we
might better educate our communities on the opportunities
available to them from your experience.
Mr. PONCE. Thank you. That is a very good question. I would
say please look at us as individuals and not as a number. And
that is truly factual even in our industry, if we can just
please be looked at as individuals and our credibility and our
experience and that endeavored business that will go a long
way. And not look at us as an actual number as such as these
big bank branches do and instead of putting in check marks they
are just crossing the lines and making sure they hit all
avenues.
It has been my experience that a lot of banking
institutions here on a local level look at a deal as how can we
not get it approved versus how can we get you to the approval,
you know, stamp. You know, maybe we cannot get approved at this
very moment but let's show you what you need to do to get
approved and that is the educational component that we lack.
And that is the educational component that we push within the
local organizations that I am involved in such as the Hispanic
Chamber of Commerce of St. Louis. Thank you.
Mr. STAUBER. Mr. Ponce, what I heard you say is personalize
the assistance and get to a yes because it is easy to say no in
government. Would that be correct?
Mr. PONCE. That is 100 percent correct, Representative
Stauber.
Mr. STAUBER. Thank you, Mr. Ponce, for your testimony.
And Madam Chair, I yield back. Thank you.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now we recognize the gentlelady from Georgia, Ms.
Bourdeaux.
Ms. BOURDEAUX. Thank you, Madam Chairwoman. And thanks to
all the witnesses here today. Hopefully, you can hear me okay.
I see my Internet connection may not be great.
I represent one of the most diverse districts in the
country with immigrants from all over the world that help drive
our economy in Gwinnett and Forsyth counties. About a quarter
of my constituents were born outside of the United States. Many
of these, of course, as you all have noted, are entrepreneurs
and operate lots of wonderful mom and pop shops all over this
district. And so our challenge is to figure out how to, of
course, get them through the COVID crisis and then get them off
to a strong start on the other side of this.
So just starting at the top with a question for Mr.
Kallick. You mentioned in your testimony concerns about the
disproportionate impact of COVID-19 on immigrant communities,
the importance of correcting that imbalance using small
business relationships with big banks versus CDFIs as an
example.
In your view, how can Congress ensure that our immigrant-
owned businesses, which are these really wonderful but often
small and do not have those regular banking relationships, how
do we help them recover and build back better after the
pandemic?
Mr. KALLICK. You know, I wish I had a more fully blown
answer for you. I think there are 1,000 steps along the way and
as you consider each one I would say it would be really
important to think about how is that going to affect the
immigrant businesses, the businesses owned by people of color
who have been so sometimes deliberately I think, sometimes not
deliberately but so excluded from other forms of aid. So I am
not sure how to, you know, I would be glad to come back another
day and come with a series of proposals. I do not really have
one ready but I think it can be part of the thinking every step
of the way.
Ms. BOURDEAUX. I have heard about the microlending
programs, things like that, and we are working with our Small
Business Development Center also to try to really improve and
build on the outreach to our immigrant businesses. Recently, I
had an event with over 60 restaurants from Georgia 7 who we saw
last week with Isabel Guzman, the Small Business Administrator.
And many of those who showed up to this event were immigrant-
owned restaurants and they were beginning to apply for and
receive assistance through the Restaurant Revitalization Fund.
However, we know that there are many other businesses that have
not been able to access any assistance over the past year. And
so we are now looking forward to the launch of the Community
Navigator pilot program on April 30. And it is my hope that
this program will enable more immigrant-owned businesses to get
the information and resources that they need to help them
recover and prosper in the years to come.
That being said, you know, we are trying to figure out, you
know, what does this Community Navigator need to do? How are we
going to target that towards our small businesses in order to
help them be successful? And one of my colleagues at George
State University did a study and talked about how a lot of
resources were really just oriented towards providing in-
language services to folks.
And I was wondering, this is a question for Ms. Jaja Chen,
what would be some of the things that would really help people
in the Taiwanese or Chinese business community? You know, what
could the Small Business Administration do to help them get to
the other side of this crisis? We want them to provide services
in language. You know, have some of that kind of research. But
are there other things they could be doing that would help a
business like yours or your colleagues and peers in the
community?
Ms. CHEN. Well, I think it is huge to really focus in on
building relationships with the grassroots organizations and
community organizations like mutual aid groups that are already
serving immigrant-owned populations. And so rather than
revamping, creating brand new programs, really starting to
recognize, like there are so many nonprofits and organizations
already serving the immigrant-owned population or immigrant-
owned business population. So it is important to really have
the linkages. Right? The collaboration between the
organizations and part of that is having the time, having
people to be able to build those linkages, build those
relationships, and to be able to ensure that there is that
cultural competency that has held out throughout that time in
the relationship because it comes down to someone having the
relationship with someone to know, oh, I can actually qualify
for programs within the SBA. I think many Chinese and Taiwanese
business owners might not even realize that they have the
ability to apply for programs like the PPP or Restaurant
Revitalization Fund.
Ms. BOURDEAUX. I will just state we have this challenge,
and I will have to wrap up, between we have people with the
cultural knowledge and people with the small business
knowledge. We have got to find a way to bring those two groups
together.
But thank you very much, Madam Chairwoman. I yield back the
balance of my time.
Chairwoman VELAZQUEZ. The gentlelady yields back.
Now we recognize the gentlelady from California, Ms. Kim.
You need to unmute. We cannot hear you.
Ms. YOUNG KIM. I am joining by audio.
Chairwoman VELAZQUEZ. We can hear you now.
Ms. YOUNG KIM. Sorry about the technical difficulty here.
So I wanted to thank the witnesses that are joining us
today and thank the Chair and the Ranking Member for holding
this hearing.
You know, I am an immigrant myself and also a former small
business owner so the witnesses' testimonies really resonate
with me. And as my family and I also strive to live the
American dream, I fully understand the importance of immigrant-
owned businesses in our community and the contributions they
make.
According to a study from 2019, about 3.2 million
immigrants run their own small businesses making it one in
every five entrepreneurs in this country. And immigrant-owned
businesses, they employed almost 8 million across America. And
I have the honor of representing California's 39th District,
which is one of the most diverse districts in California and
also home to many small businesses owned by immigrants.
Overall, here in California over 40 percent of businesses are
started by immigrant entrepreneurs.
But unfortunately, many entrepreneurs in my district have
been negatively impacted due to one of the most onerous stay-
at-home restrictions in the country imposed by Sacramento.
You know, Mr. Ponce and Mr. Chen, just like as you, you are
policymakers and legislators, I, too, have taken the time to
speak to many small businesses in my district. And one common
theme I hear is that they are unable to hire qualified workers.
And I am sure based on your experience investing and owning
businesses, you also see the same problem in your business and
with your communities.
So I want to ask you, Mr. Ponce, do you have any
recommendations that could make it easier for businesses to
find and hire workers?
Mr. PONCE. Representative Young Kim, thank you so much for
your question.
Yes. You know, we have, I would say within the Latino
community, we do have a luxury where we are really utilizing
our chamber, our business chamber here locally to vet out and
find and market to potential future business entrepreneurs to
even help gain employment to start and understanding perhaps
the business that an individual would like to be involved in.
Here my advice to be more direct to your question is continue
to help these organizations and these foundations that allow
and assist in gaining knowledge and education to and getting it
out there I should say to the future employers and future
business owners in our minority communities. I hope I did it
justice to answer your question. I apologize. Thank you.
Ms. YOUNG KIM. Well, thank you, Mr. Ponce.
In response to Mr. Williams's question earlier, you already
stated that it would not be prudent for our government to
increase taxes as it will quell business confidence in the
American economy at this point. So as a follow up to that and
as our economy looks to recover from the pandemic, what type of
policies would instill business confidence and incentivize new
businesses to open?
Mr. PONCE. Yes, thank you. To be more direct to your
question I completely 100 percent stand behind the fact that we
cannot increase access. That is a major component to our issue.
It will not allow us to grow in the manner that we need to
grow.
Furthermore, we need local government authorities and local
legislature to really back the business and the local economy
of business to allow us to continue to grow. But adding more,
you know, more detriment to increase of taxes or limiting an
opportunity to open our doors during the reopening of the
pandemic, that all has to be looked at and really sought out
with a fine-tooth comb. Thank you.
Ms. YOUNG KIM. Sure.
In the interest of time, let me ask a quick question to Mr.
Kallick and hope you have time to respond.
In several of the relief packages Congress passed over the
last year, the Committee ensured that the smallest of the small
business and those that rely on lending institutions like
community development financial institutions or CDFIs and small
and independent lenders have access to PPP and EIDL programs.
So to what do you attribute those businesses not being able to
access the programs given the specific carveouts that were
already provided?
Mr. KALLICK. I think they were starting so far behind in
doing that that there was a real problem in catching up. I
think that is the extent of my understanding of it.
Chairwoman VELAZQUEZ. The gentlelady's time has expired.
Now we recognize the gentlelady from California, Ms. Chu,
for 5 minutes.
Ms. CHU. Ms. Chen, I appreciate you sharing your experience
of discrimination and talking about the fears prevalent in the
Asian American community during this year of rising anti-Asian
hate crimes across our country. I have been active in leading
the effort to fight anti-Asian hate crimes which increased with
Trump's usage of the terms China virus, Wuhan virus, and Kung
flu.
Last month, I led a delegation to Georgia to visit the
three Asian-owned small businesses where eight people were
murdered, six of them Asian women. Two weeks ago I met with
President Biden to discuss how the administration can work with
the AAPI community to put a stop to this hatred, and then last
week the Senate took a big step toward by passing the COVID-19
Hate Crimes Act which will come to the House in May and
contains the text of my bill, the No Hate Act.
I am so impressed that you have managed to grow your small
business so successfully when you faced not just the pandemic
but also anti-Asian discrimination. So can you talk about what
you have done to overcome these hurdles and run your business
so successfully? And what advice would you give to other AAPI
small businesses that have some fears and trepidation right
now?
Ms. CHEN. Thank you, Representative Chu, for your work in
this AAPI community.
So specifically for us, we have an extensive community
support. I think Waco is a phenomenal community that really is
seeking to uplift diverse communities. And so as business
owners, we have been able to take part of organizations like
the Hispanic Chamber, African American Chamber, and they have
provided such support and even standing against the anti-Asian
racism and hate crimes throughout the country. And we have a
lot of relationships that we have been able to build with other
community leaders and other partnerships. And I think that is
what has helped us to continue doing what we do. To recognize
that we are not alone in this work that we do even as a
minority within our own community has been huge to have that
community care support.
In addition, I do want to put a plug that I, myself, and my
husband, have gotten therapy through this time. And so as a
business owner, being able to have access to therapy services
was huge to be able to continue working through our own trauma
responses in the midst of all that is going on nationally.
And so advice to business owners, I would say recognizing
that there are a lot of leaders and individuals who want to
support your work and so it is more of trying to find those
allies and to be able to find the business partnerships and the
collaborations that are going to continue pushing you forward
in your work.
Ms. CHU. Thank you so much.
Mr. Kallick, we know that family ties strengthen immigrant
communities which in turn help us bolster the economy.
Recently-arrived immigrants represent 30 percent of new
entrepreneurs, despite the fact that they make up only 13
percent of the population. So immigrants are building the small
businesses here in the U.S. which helps us all. And family-
based immigrants make such huge contributions to the U.S.
economy. In fact, immigrant families help businesses survive
sometimes by pooling money or by providing childcare. They are
essential to it.
And that is why family-based immigrants have added $2
trillion to the U.S. GDP in 2016. And that is why I introduced
the Reuniting Families Act, which addresses the family
immigration visa backlog and unifies immigrant families. And I
am proud that this is part of the proposed U.S. Citizenship Act
which will reform our immigration system in such a
comprehensive way but also allow more immigrants and families
to build their businesses in our communities.
So what does your research show about the impact of family-
based immigration in communities and small businesses? Do you
think a policy like the Reuniting Families Act, which is in the
U.S. Citizenship Act, could that help bolster economic
development in immigrant communities?
Mr. KALLICK. I do. I think we do very well in the United
States with the immigration that we get. And as you know, the
primary source of immigration is through family unification. So
I think it is quite striking how you can think about ways of
shifting what immigrants might be coming here, but the reality
is that immigrants who have been coming to the United States
make up for all of the statistics you have been hearing so far
and that is primarily family-based immigration. Many of the
entrepreneurs that you hear about, you know, the sort of
superstar entrepreneurs who start the unicorn, the companies
that become gigantic companies, they did not come here as
special immigrant visas in order to be entrepreneurs. They came
here as immigrants and then became entrepreneurs.
Ms. CHU. Thank you. And I yield back.
Chairwoman VELAZQUEZ. The gentlelady yields back.
Now we recognize the gentlelady, Ms. Van Duyne from Texas
for 5 minutes.
Ms. VAN DUYNE. Thank you. Thank you very much, Chairman
Velazquez and Ranking Member Luetkemeyer. I appreciate the
hearings today.
Immigrants are some of America's most entrepreneurial
citizens, and everyone benefits from the jobs their businesses
create and the services that they provide. While the Biden
administration may speak positively about small business owners
and American entrepreneurship, their actions continue to
inflict unnecessary pain on small business owners around the
country. Continued encouragement for COVID restrictions, tax
increases, and luxurious unemployment benefits all hamper small
businesses' ability to be able to do even the most essential
things.
I have heard from so many small businesses that have
reached out to me and my office to tell me that they are having
trouble hiring staff because they have to compete with the U.S.
Government's seemly never-ending unemployment benefits. And as
Young Kim had mentioned earlier----
Ms. CHU. Well, Jaja Chen seemed to----
Ms. VAN DUYNE. We are hearing this over and over again. You
know, when I am back in the district I have gone out to
restaurants, and these are either high-end, these are small
immigrant-owned diners, and they are all telling me the same
thing. They cannot hire people because they are competing with
the U.S. Government handing out more money than these people
are getting paid on the job.
By the way, these are not only folks who are getting paid
more than a minimum wage but people who are getting $20, more
than that per hour, but they are having a hard time hiring
people.
I talked to one business owner just last week who said he
has got 300 openings and cannot get people to apply. This is
not really helping our economy to open up at all, and I am sure
that small business owners, including those here with us today,
do not want government handouts. They want the government to
get out of their way so they can provide consumers with their
products, their services, and expertise.
The reason our immigrant small businesses have such great
success is not because of the government but rather because
they have that can-do mentality that this country was built on.
The Federal Government's role is not to pick winners or losers
but to allow the greatest opportunity for our citizens to
flourish no matter how many generations a family has been here.
I appreciate all the stories that we have heard today but I
am also concerned about the small businesses not just in my
district but across the country and what they are seeing.
And Mr. Ponce--am I saying that? Is it Mr. Ponce or Mr.
Ponce? I would love to get your----
Mr. PONCE. Ponce.
Ms. VAN DUYNE. I would love to get your feedback on have
you seen any kind of negative or positive experience from the
extending of these luxurious unemployment benefits?
Mr. PONCE. Representative Van Duyne, thank you so much for
your question. And to better answer it, yes. Here in our local
community and our local market you do find yourself noticing,
as I notice as a business owner, that the government is way too
much involved in our small business practices and they do not
allow us to, you know, really, really grasp and grow as an
entrepreneur. When it comes to the unemployment versus the
minimum wage, the unemployment right now and the subsidies that
people are I would say quite frankly taking advantage of
because the government allows it, you know, yes, there is a big
issue. We have local restaurants and colleagues that own them
that are good friends of mine that are having issues trying to
reinstate employment with the current people that were employed
before but unfortunately, because of the fact that unemployment
is paying better if you will, it makes it difficult for them to
reattract the previous employee to come back to work. It really
does bring a challenge here I would say here in our market to
really help really get back and restabilize as a business owner
and as a company when you are actually having to battle the
government and their subsidies and their opportunities to
basically make it easier for them not to gain gainful
employment. Thank you.
Ms. VAN DUYNE. I appreciate that.
You know, you have owned a small business now for the last
20 years having navigated the lending process. What do you wish
you knew then that you know now?
Mr. PONCE. Well, that is a very good question. I think
honestly if I had to start this all over again the only change
that I would make is I would definitely really educate myself
on the whole banking policies and how banking works because I
probably would have took a step back and limit my pace of how I
wanted to grow. I would slow everything back down because I
took a lot of risk growing and building my business,
Representative Van Duyne. And if I would have known what I know
now I probably would not have taken as much of the risk because
I really thought that by building this on my own and growing
this business on my own and using my own financial means it was
going to give me the credibility to really go to these big
banks and these big institutions and begin to raise capital to
continue to grow our business. But unfortunately, that was not
the case.
Chairwoman VELAZQUEZ. The gentleman----
Mr. PONCE. Thank you.
Ms. VAN DUYNE. Thank you very much. I yield back.
Chairwoman VELAZQUEZ. The gentlelady's time has expired.
Now we recognize the gentleman, Mr. Evans from
Pennsylvania, for 5 minutes.
Mr. EVANS. Thank you, Madam Chair and Ranking Member. Thank
you for your leadership, Madam Chair, on this very important
subject. If anything is going to build back it is what we are
talking about today.
I would like to start with Mr. Daniel Fitzgerald. What can
Congress do more to make sure that our Small Business
Development Centers are fully prepared to help immigrants from
all backgrounds?
Mr. FITZGERALD. I think it is, continue to support the
programs. What our experience was when were able to receive
some increased funding from the state of California was we were
able to expand more into the communities. That is when we were
able to add in International Rescue Committee and the Asian
Business Association. That coincided with the increase in
funding that we received at the same time from Congress as it
has increased for small business development centers. The
reality is that the demand continues to outstrip the resource,
but as we are able to get more resources, we are able to hire
more advisors that are part of the community that are
linguistically and culturally correct. And that is really what
supports our efforts to be able to do it. We invest back into
the community, providing that type of individual work that has
been talked about with the business owner.
Mr. EVANS. What would you say are the most in-demand
services by immigrants that seek help at your business center?
Mr. FITZGERALD. Really what it is navigating the U.S.
system. That is either the lending and banking system, credit
system, but also the layers of government, understanding what
is a county, what is a city, and what are some of those
differences. Or really how the credit market works and how
credit scoring works. And so a lot of that is around how those
particular systems work because it literally is not something
they are used to. And so we work with them and that is why we
also have what we call the culturally correct approach to it
where if someone is from Mexico, if someone is from Iraq, have
advisors that are familiar or even are from those countries to
be able to create some information and be able to help them
understand how the U.S. systems works similarly to how it
worked from their country of origin and really be able to
support them. Really help them understand what they need to do.
For example, I need to go to the county to get a health permit.
Or what it is I need to do to make sure that, yes, I have a
business banking account. How is that different from my
personal banking account? And understanding that even small
credit loans are able to help build credit and establish credit
which can then help them in the future to be able to grow their
business with even larger loans.
Mr. EVANS. I yield back my balance, Madam Chair. And thank
you for the opportunity. Thank you, sir.
Mr. FITZGERALD. Thank you.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now we recognize the gentleman from Wisconsin, Mr.
Fitzgerald.
Mr. FITZGERALD of Wisconsin. I am going to yield back,
Madam Chair. I do not have anything very specific right now.
Thank you very much.
Chairwoman VELAZQUEZ. That concludes our hearing today.
I want to take this opportunity to thank all of our
witnesses for their testimony. Today you showcased the
incredible power of immigrant-owned businesses and how vital
they are to our recovery. When it comes to entrepreneurship,
immigrants are leading the way. As business startup rates have
dropped overall, immigrants have filled the gap creating jobs
and helping our economy keep pace. COVID has devastated these
same businesses. If we genuinely want to build back better, we
must ensure they have the support need to recover. I hope that
today's hearing drove home the importance of these businesses
to our economy and will yield actions to help build them up. I
look forward to collaborating with my colleagues on both sides
of the aisle as we work to harness the power of these
businesses and drive an equitable recovery.
I would ask unanimous consent that Members have 5
legislative days to submit statements and supporting materials
for the record.
Without objection, so ordered.
If there is no further business to come before the
Committee, we are adjourned. Thank you.
[Whereupon, at 2:04 p.m., the Committee was adjourned.]
A P P E N D I X
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