As southeast Michigan’s economy experiences the fits and starts of the pandemic, immigrants and immigrant-owned businesses are essential to a recovery, a new study has found.
Immigrants make up about 10% of residents in metro Detroit, but are 23% of the region’s agriculture workers and 13.5% of grocery store workers — considered essential roles in the COVID economy.
Immigrants also account for nearly 38% of business owners in the hospitality sector, which includes restaurants, bars and hotels, according to the report by New York-based research and advocacy firm New American Economy, using data from the Census Bureau’s 2018 American Community Survey.
Despite their importance, immigrants are also particularly vulnerable to the effects of COVID-19 because of the risk of infection to essential workers, language barriers and difficulty accessing federal aid packages, the report found. The analysis was conducted in partnership with the City of Detroit, Detroit Regional Chamber, Global Detroit and Oakland, Macomb and Wayne counties.
Like many restaurants, Bonoful Sweets & Cafe in Hamtramck saw revenue plummet as its doors closed for a month at the onset of the pandemic.
“We had a complete loss. We had to (pay) rent, bills. We didn’t get any benefits, like loans,” said co-owner Mustak Ahmed, whose south Asian restaurant has a staff of five.
The restaurant’s three owners applied for a Small Business Administration loan but were denied. They paid $8,000 in rent out of their own pockets and they’re still catching up on bills. In normal times, Bonoful would see as many as 90 carryout customers a day. Now, it’s down to 15 to 20.
Across the country, the number of active small businesses owned by minorities and immigrants plummeted from 3.1 million in February to 2 million in April — a 36% decline, according to a working paper from the National Bureau of Economic Research. The report found a 22% decline in overall businesses during the same period of time.
Chanell Scott Contreras, executive director of ProsperUS Detroit, a program within Southwest Economic Solutions that offers microloans, training and professional services, said that while there have been many funding opportunities and language resources available for businesses — especially at the local level — it’s still difficult for some owners to make ends meet for both their families and employees.
“When you’re already a low- to moderate-income individual or family, there’s a real impact of COVID-19 on your personal life, your family life, the well-being of the people that you care about,” she said. “And so, what we’ve noticed is just a lot of stress being placed on immigrant business owners.”
Under that stress, it can be difficult to navigate the maze of opportunities, deadlines and requirements.
In the case of Bonoful Sweets & Cafe, the restaurant’s owners applied for an SBA Economic Injury Disaster Loan. ProPublica reported this month that the program has been marred by delays and confusion.
Steve Tobocman, executive director of Global Detroit, said immigrant-owned businesses need more “trusted connectors,” to help businesses navigate opportunities for support.
“It could be an elected official … a neighbor, faith leader or community organization, to an economic development organization like ours … They’re somebody who can really earn the trust of the community and the people that they serve,” Tobocman said.
With funding, businesses survive
The Southwest Detroit Business Association was a trusted connector for family business La Jalisciense Restaurant and Market, which secured $9,000 in grant funding from the Detroit Economic Growth Corporation and TechTown.
When the restaurant section closed in April and May, the market side of the business kept her family afloat, said Leslie Vargas, who runs the restaurant.
“Right now, our business is running only with the grocery. The restaurant is not as much as it used to be. So before, maybe in January, it was like half and half … right now it’s just the store … Thankfully, we’re doing OK.”
Hamissi Mamba, co-owner of Baobab Fare which was slated to open in May, said he didn’t have trouble navigating the funding process. But he’ll have to raise more to adjust to the new realities of running a restaurant during a pandemic.
Co-owners Mamba and his wife, Nadia Nijimbere, came to the U.S. from Burundi as refugees. The pandemic has only paused their opening plans, as they prepare to open in the fall and try to secure more funding to add outdoor seating to the plan.
But Mamba is unfazed.
“Being an immigrant refugee and coming in this country, the way me and my family came, I think we went through a lot, even I would say more than … COVID-19,” he said.
The New American Economy report says immigrants contributed $3.3 billion in federal taxes and $1.4 billion in state and local taxes in 2018. They accounted for 19% of the retail businesses in the region.
“Immigrants are job creators, and their inclusion is critical to our economic recovery,” Tobocman said.
Tobocman pointed to business development organizations bringing on more people for business outreach and bilingual speakers as positive steps.
“While there is still a huge gap to navigate and we are not there where low-income communities, African American communities and immigrant communities are utilizing opportunities at the same rates as other communities,” he said, “we’re making great progress in this region.”