SRP Hispanic-owned Business Study 2005

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Salt River Project and the Arizona State University Hispanic Research Center recently conducted a comprehensive study of Arizona’s Hispanic-owned businesses. It provides an in-depth profile of Arizona’s Hispanic-owned businesses and identifies the most critical issues facing this business segment. Max Gonzales, Salt River Project’s Hispanic Segment Manager and Dr. Louis Olivas, Assistant Vice President, Academic Affairs and Associate Professor at ASU’s W.P. Carey School of Business join José Cárdenas to discuss the details of the study.

>> Jose Cardenas:
Good evening and welcome to Horizonte. I'm Jose Cardenas. Under a new state law, undocumented immigrants can be arrested if they are suspected of using coyotes to get into the country. Also, a new study takes a comprehensive look at Hispanic-owned business, and a local businessman uses his success to bring new opportunities to valley children. All those stories coming up next on Horizonte.

>> Jose Cardenas:
Thank you for joining us. Last week, Maricopa County Attorney Andy Thomas issued a legal opinion for a new state law against human smuggling. He says undocumented immigrants suspected of using smugglers to get into the country could be arrested and charged under the new law. Thomas's opinion also said Arizona officers have the authority to ask presumed undocumented immigrants about their immigration status. Joining us to go over the legal opinion is Crystal Garza, the director of communications for the Maricopa County Attorney's Office. Crystal, thank you for joining us.

>> Krystal Garza:
Thank you for having me.

>> Jose Cardenas:
Now in addition to being director of communications you are a line prosecutor as well?

>> Krystal Garza:
That is correct. I am a line prosecutor. I've been a deputy county attorney with the office for over three years.

>> Jose Cardenas:
Lets talk about the background that led up to the legal opinion. First the new law… tell us a little bit about that. When did it become effective and what is it supposed to do?

>> Krystal Garza:
Correct. It became effective August 12 th of this year. Basically what the law states, it makes it illegal for a person to intentionally engage in human smuggling for profit here in Arizona.

>> Jose Cardenas:
Now, the opinion that was issued by the County Attorney's Office…how did that come about?

>> Krystal Garza:
The opinion was in response to a series of questions from the Sheriff with regards to the new statute and how it applies.

>> Jose Cardenas:
And it's a little anomalous how it might strike people…you have a rather public dispute a few months ago between the sheriff's office and the county attorney's office about a related issue, a case of a gentleman who held some people at gunpoint. Now you've got the sheriff's office asking the county attorney whether they can contain people based on their presumed status as undocumented workers.

>> Krystal Garza:
Correct. They need some clarification as to what they could and could not do under the law. Our opinion would not only would help the sheriff's office but would help other police agencies that may have the same type of questions in regards to this statute.

>> Jose Cardenas:
So in your interpretation this would apply to any law enforcement official in the state?

>> Krystal Garza:
Correct.

>> Jose Cardenas:
Now, tell us, before we get into the details of the opinion, how big a problem is this, the smuggling by coyotes?

>> Krystal Garza:
It's a growing problem here in Arizona. As many know illegal immigration smuggling by coyotes in particular also brings kidnappings, drug offenses, aggravated assaults, those types of crimes. It's a very serious issue here in Arizona.

>> Jose Cardenas:
Now, to the extent that some people think it's a major problem just having the number of people here without papers that we do, will this law lessen that problem or reduce the number of people here without proper documentation?

>> Krystal Garza:
Well, I can't predict that so we'll have to see if, like you said, it will reduce the numbers.

>> Jose Cardenas:
Have we had any prosecutions yet under the new law?

>> Krystal Garza:
As far as I'm aware…I believe not.

>> Jose Cardenas:
Now lets talk about the opinion. The first question here is whether or not the sheriff's office can arrest someone without proper documentation if they believe that they have been willingly transported by a human smuggler. What is the answer to this question?

>> Krystal Garza:
That is correct. Let me give you a hypothetical. For example, if a police officer stops a vehicle for a traffic violation and pulls that vehicle over for that violation and has probable cause to believe that a violation of the human statute has been violated then they can further ask question to determine whether or not a crime has been committed. The illegal immigrant could possibly be prosecuted under the human smuggling statute.

>>

>> Jose Cardenas:
So these are theories as to how the people who are being transported could be charged?

>> Krystal Garza:
Correct. We could possible charge them as an accomplice to committing that crime of human smuggling. There would be numerous ways that we could possibly bring charges against the actual illegal immigrants, assuming that we do have a coyote in the vehicle with the individuals, we could possibly bring charges under the theory of accomplice liability.

>> Jose Cardenas:
But the statute itself seems to only apply to the person doing the smuggling, the coyote. These are theories about how the people being transported could be charged?

>> Krystal Garza:
Correct. We could possibly charge them as an accomplice of committing that crime of human smuggling, also possibly charge them with conspiracy or solicitation.

>> Jose Cardenas:
But not necessarily with committing the crime of human smuggling.. The opinion seems to suggest that that's at least questionable and that's why you would have to rely upon these other theories.

>> Krystal Garza:
It's possible that we could charge them with the actual substantive offense of human smuggling under the theory of accomplice liability. The fact that the illegal immigrant with the intent to promote or facilitate that offense and agreed with the coyote to commit that offense would be enough to use the theory of accomplice liability.

>> Jose Cardenas:
The situation you were talking about before where a peace officer stops somebody in a car and has reason to suspect they may not have the proper documentation, that, though, would not necessarily be reason to suspect they had arrived here through the efforts of a coyote, is that right?

>> Krystal Garza:
Correct.

>> Jose Cardenas:
So how would they be charged as violating that statute?

>> Krystal Garza:
They would have to obviously gather enough information and facts to support a charge of human smuggling. They would have to do their investigation. As I said, they couldn't stop a vehicle just based on suspicion that there were illegal immigrants in the vehicle. There would have to be an offense such as a running a red light, failing to stop at a stop sign, something to that effect. If they then further proceed to ask for identification, and the individuals in the car could not provide that identification, and it becomes known to the officer that they are actually illegal immigrants --

>> Jose Cardenas:
Crystal, let me ask you this, we have about 40 seconds left. How would that become known that? Because one of the questions is, can they ask, presumed illegal immigrants, is the statement here, about their immigration status? What would lead them to believe that they are presumed illegal immigrants?

>> Krystal Garza:
Well, it would start with identification process. They would have to ask for the identification, and based on what the individuals in the vehicle respond to, that could lead to further inquiry and lead to the cops having probable cause to believe a coyote is in the vehicle and the individuals other than the coyote are illegal immigrants.

>> Jose Cardenas:
We're going to have to leave it there for now. This is obviously a very complex subject. Hopefully we'll be able to get you back on the show to talk about it more. Thank you very much, Crystal Garza. The Salt River Project and the Hispanic Research Center of Arizona State University just released the results of a study of Arizona's Hispanic-owned businesses. The results provide insight into the issues facing this market. First we look at two Hispanic business owners who say their business has more to offer than meets the eye. Nadine Arroyo has that report.

>> Instructor:
To do these tests you're also going to need a nitrogen bottle and a pressure regulator.

>> Nadine Arroyo:
Ongoing staff training at Fordyce Networks, Incorporated is part of their effort to stay one step ahead of rapidly changing technology. Fordyce is a technology service firm specializing communications and security in areas such as surveillance of as well and wireless and data networks. This is one of hundreds of Latino-owned companies in the State of Arizona, and according to a recently released survey, Hispanic-owned businesses are not only a fast-growing and major component of Arizona's growing economy, but it's essential to understand their unique challenges and seek means to effectively ensure outreach and communications for this market. Clarence McAllister is president of Fordyce Networks. He says business owners and clients alike should realize Hispanic-owned businesses are equipped with well-trained and experienced individuals.

>> Clarence McAllister:
We have CAD operators in house and we can do a complete electrical communication design for a building or facility for our clients. We also offer consulting services, providing construction managers in the wireless industry. So the expertise -- we have a very highly qualified and trained staff. We have four engineers in house and very experienced in all areas of fiber optics, wireless and electrical engineering.

>> Nadine Arroyo:
Originally from Panama, McAllister received both his undergraduate degree and master's in engineering at Arizona State University. He believes he's not alone as a Hispanic business owner with one main goal. Success.

>> Clarence McAllister:
We've serviced all over the United States, all the way from California, Denver to New York, New Jersey, Baltimore. Very large projects for customers like Sprint PCS and Cingular. We go where they need us. We're also doing some business in Mexico. We have a project we're doing designing some equipment for a factory in Mexico.

>> Nadine Arroyo:
Elizabeth Trevino is the proprietor of the Skin Frenzy Spa located in Central Phoenix. For the past four years, Trevino has provided beauty and skin care to clients all over the Valley. According to Trevino, her motto is to be passionate about what you do and open your doors to everyone.

>> Elizabeth Trevino:
My clients range anywhere from Latinos, Anglos, African-American, Asian, a little bit of everything. So I don't want to limit myself to just because I am Latina.

>> Nadine Arroyo:
Trevino, a native Arizonan, is not only licensed in the area of skin care, but she's also an instructor in the field. She believes Hispanic business owners must think outside the box and seek assistance to help with start-up and growth. According to the survey, Hispanic business owners are more likely not to use services provided to assist with a more structured business plan.

>> Elizabeth Trevino:
When I first started, I took a loan from myself. I had to use that money and say, okay, if I'm really serious about this, I'm going to put my -- what's the saying that goes, put your money where your mouth is? There you go. That's exactly what happened. Had I known about these other organizations or taken the time to do that, I think I would have been more organized.

>> Nadine Arroyo: Both proprietors agree, being a Hispanic business owner is not as important as being a quality service-driven agency competing with larger more established enterprises.

>> Elizabeth Trevino:
I know that the services that I offer are not mediocre services. We do everything from microdermabrasion. Pretty soon we will be adding electrolysis. Soon we will be adding the oxygen facial, which I'll be the only one in this Phoenix area that has this machine. There's maybe a couple in Scottsdale, but I'll be the only one in this area. So I take what I do very seriously.

>> Clarence McAllister:
Feels very good being able to play on the same level, the same field, the same level, as other large corporations, majority owned corporations, and be able to prove to everybody that we can do it, and we have repeat customers who come back and looking for our services.

>> Nadine Arroyo:
Whether it's merchandising, construction, technology or consulting, the study shows Hispanic-owned businesses are part of our American culture.

>> Jose Cardenas:
With us tonight to discuss the 2005 SRP Arizona Hispanic Business Study is SRP's Hispanic Business Segment Manager Max Gonzalez. Also here is Assistant Vice President for Academic Affairs and Associate Professor at ASU's W.P. Carey School of Business, Dr. Louie Olivas. Gentlemen, thank you for joining us on "Horizonte." Max, first tell us, the idea for the study, what was the genesis?

>> Max Gonzalez:
Well, it began with us trying to reach out to our business class customers.

>> Jose Cardenas:
This is SRP?

>> Max Gonzalez:
Correct. We knew a lot, know a lot about our residential customers, and we do a very good job of reaching out to them, but when it came to our business customers, the information we had was really lacking. So we started looking into what was out there. We came across Dr. Olivos' study. We looked into it and we felt we could really benefit from this if we can get more information that will benefit our organization. So we partnered with Dr. Olivos and we said, we have a proposal for you. We would like to enhance this study. We would like to bring some experts -- some additional expertise to the study, and the result is what I think is a fantastic product.

>> Jose Cardenas:
Dr. Olivos, the study that Max is referring to, is that the work you do every year for Datos, the Hispanic Chamber of Commerce's report?

>> Dr. Louie Olivas:
No, they're two different pieces of work. The Datos is the Hispanic Chamber of Commerce data report. This is an ongoing study I created 14 years ago called the Annual Survey of Hispanic-Owned Businesses. It's the longest running survey in the U.S. So when I was approached by SRP to help me expand the study, I jumped on it.

>> Jose Cardenas:
And you've been involved in this, as your last statement indicates, for a long time. You're probably the dean of these kinds of studies, and yet you described this as a first of its kind in the country. In what way is that true?

>> Dr. Louie Olivas:
Correct, first of its kind in that it's the most comprehensive study ever undertaken on Hispanic-owned businesses in terms of their approach, in terms of methodology. The first time ever telephone interviews with 679 respondents.

>> Jose Cardenas:
Telephone interviews as opposed to --

>> Dr. Louie Olivas:
Mail questionnaire that has historically been the approach that we had taken.

>> Jose Cardenas:
And you get a much better response with the telephone?

>> Dr. Louie Olivas:
No question and the quality of response is much better. Trust me, no other state, based on the surveys I did with my students, including the U.S. Hispanic Chamber of Commerce, has ever undertaken such a comprehensive study. So my hats are off to SRP for their support.

>> Jose Cardenas:
Max, who else was involved in this historic effort?

>> Max Gonzalez:
In addition to ASU and Dr. Olivos, we partnered with West Group Research. West Group Research is our research partner and they assisted on this.

>> Jose Cardenas:
Let's talk about some of the key findings. What were they?

>> Max Gonzalez:
Key findings. There are quite a few. One of the things we found is Hispanic businesses really mirror the overall image -- the overall business community in Arizona, in fact, across the country. When we looked at the profile of Hispanic businesses, the type of industry they're in, they really match up quite well across the country. A few other surprise findings for us is the level of education for this group. 33% of Hispanic business owners have college degrees. When you compare that to the overall Arizona demographic, it's significantly higher. I mean, when you compare that to the overall Hispanic demographic, it's significantly higher. The amount of the U.S.-born, percentage of U.S.-born for Latino business owners, 66% of them are born in the U.S. When you look at that, just U.S. born percentage, 56% are multiple generation, third generation or more.

>> Jose Cardenas:
These are surprising, as I understand it, in part because this is not the picture you would get if you looked at the traditional census data.

>> Max Gonzalez:
That's correct. If you look at census data, particularly for those 18 years and over, you will find that greater than 50% are foreign born. Here we have a highly acculturated group. Yet they are maintaining some links with their culture. 78% of these businesses say they speak some Spanish on the workplace. Additionally, they consume a great deal of Spanish media. So they have that link to the culture.

>> Jose Cardenas: So how does this help SRP target its services to this particular demographic.

>> Max Gonzalez:
We wanted to know what were their needs, what are their values, what are their concerns? Some of things we found that I think we're going to start looking into now, for instance, is the supplier diversity programs. Supplier diversity programs have been around since World War II, and now what -- so you would think that the awareness of this would be fairly high. In reality, what we found through our study, is nearly 80% of Hispanic businesses either don't know they exist or have very low familiarity with them.

>> Jose Cardenas:
Dr. Olivas, that's not the only thing that the survey indicated the Hispanic businesses aren't aware of. There are other resources that they don't seem to know exist to assist them. What can you tell us about that?

>> Dr. Olivas:
Two perspectives. Number one, they're not aware of how to access some of the professional services available to them either through diversity supplier programs or some of the programs and financial institutions -- they -- they -- in addition, they're not aware, obviously of some of the state and federal programs to assist them in start-up and assist them in professional advice.

>> Jose Cardenas:
Surprisingly, because I think to us it's a fairly well known organization, the Arizona Hispanic Chamber of Commerce and other entities like that also are not top of the mind, as I understand the survey indicated.

>> Dr. Olivas:
Correct. Now, appreciate that this is a statewide survey, so in some pockets of Maricopa County the small Hispanic-owned businesses may be aware of what the Arizona Hispanic Chamber of Commerce is offering but when you expand it to statewide and other suburbs, that's not true. What's also surprising is to notice that the Hispanic businesses that are closest to the border have a significantly higher level of income and revenue for those businesses in comparison to those businesses in Maricopa you county.

>> Jose Cardenas:
Why is that surprising?

>> Dr. Olivas:
It's surprising to me as a professor who has been studying this market for the last 14 years in Arizona in that the profile that we've done in the majority of cases focused on Maricopa County. But with this greater outreach, it clearly shows that those businesses truly are making more money.

>> Jose Cardenas:
Are you saying surprising because you would assume Maricopa County being bigger, the businesses would be more prosperous here?

>> Dr. Olivas:
Correct because the per capita income of folks residing in Maricopa County are much higher than some of the border counties of Arizona.

>> Jose Cardenas:
Max, on the issue of other resources, what, if anything, will SRP and its partners do to hype the profile of organizations like the chamber?

>> Max Gonzalez:
I do think there's a call to action. There's a call to action for organizations like SRP to raise awareness of the supplier diversity programs but I think also there is an opportunity to help these organizations have that a good impact on the greater business community, like the Hispanic Chamber of Commerce, like Department of Commerce, to see what we can do to assist them in raising the level of awareness of services and benefits that they provide.

>> Jose Cardenas:
Want to talk about some of the other findings. One, 76% of the Hispanic businesses family owned. How does that compare with non-Hispanic businesses.

>> Max Gonzalez:
Actually compares quite well. It's very, very similar.

>> Dr. Olivos, does that mean that some of what companies like SRP should be doing is just treating their Hispanic business customers just like the rest of the customers?

>> Dr. Olivos:
No question. There is no significant difference in the outcomes when you look at who are Hispanic-owned businesses in comparison to non-Hispanic. For the first time in this -- in the report that we have to share with everyone today the full -- it's beyond what we normally would call beyond the stereotype businesses. When you look at the profile nationally, internationally, who they are, what they represent, it truly is beyond the myth of what we normally think of when you speak to Hispanic-owned businesses.

>> Jose Cardenas:
If you were to do a national study or based upon the work you have done in the past, would you expect the on profile of Arizona Hispanic-owned businesses to differ from those in other states?

>> Dr. Olivos: I would love to look at a national study to compare not only by subgroup, but ethnicity by gender, by region and by level of income. I'm sure you would find differences, but not having access to that type of data, it's tough. It's really to estimate where would it be.

>> Jose Cardenas:
In other areas the suggestion is that because Arizona has a significant portion of its Hispanic population that's been here a long time, at least some of these families since before Arizona became part of the United States --

>> Dr. Olivos:
Like mine.

>> Jose Cardenas:
Like yours. Would that have an impact into the level of success you would expect to find among Hispanic businesses?

>> Dr. Olivos:
No question. The history is that Hispanic business owners traditionally have been entrepreneurs in the northern part of Mexico and still truly in Mexico in the central part of Mexico. Have always been entrepreneurial. The difference is they've never had the access to capital the way other small businesses in America have had in the past. They've never had mentors to bring them through. They've not looked at franchising as American businesses have. So this is a new phenomenon for some of these businesses.

>> Jose Cardenas:
Max, even the profile of the foreign born Hispanic business owners in Arizona is the little different than the --

>> Max Gonzalez:
The foreign born, nearly 90% of the foreign born Hispanic entrepreneurs have been in the United States a minimum of 10 years. So they're not a recent arrival. They've been here for quite a while.

>> Jose Cardenas:
And Dr. O, forgive me for calling you Dr. O, Dr. Olivos, voting of those who are citizens, higher efficacy, is that right?

>> Dr. Olivos:
Yes.

>> Jose Cardenas:
To what do you attribute that?

>> Dr. Olivos:
To the fact that they're investing in their communities and to that investment in that community they want to have a -- a fair share voice on who represents them. Hispanic-owned businesses nationally are the largest among minority businesses in general, growing four times the rate of any other business. But Jose Cardenas, what's also fascinating to notice is Latina owned businesses are growing at 10 times the rate of anyone else. Further, the U.S. Hispanic chamber will tell you come 2020 it's estimated there will be more Latina owned businesses than any other business group in America.

>> Jose Cardenas:
Gentlemen, thank you both for joining us on "Horizonte" and sharing these interesting results rolled out today. Thank you very much.

>>> Jose Cardenas:
Finally, tonight we bring you another Valle del Sol Honoree. The organization recognizes people each year at their profiles of success event. A local businessman uses his professional success to bring happiness to children. 12News anchor Mark Curtis introduced to Food City's Robert Ortiz.

>> Robert Ortiz:
Working at retail is a lot of fun, it was -- my first job, in fact, was as a bagger.

>> Reporter:
Robert Ortiz learned a lot on his first job.

>> Robert Ortiz:
How not to put the bananas on the bottom and crush the eggs.

>> Reporter:
And most importantly the discipline to make him a success in his industry.

>> Robert Ortiz:
I feel I've always had a lot of drive and I've always tried to do my best and put in my time and work hard.

>> Reporter:
That work ethic enabled Robert to move up quickly in the Basha's organization. Coupled with his Spanish speaking abilities, Robert was a key player in Bashas' successful Food City expansion, marketing to the Latino community.

>> Robert Ortiz: I love my job. It's a lot of fun. But with the job comes responsibility.

>> Reporter: It's community responsibility that Ortiz has embraced head on.

>> Robert Ortiz:
When you look at grass roots, there's nothing better than soccer.

>> Reporter:
That's when COPA Food City was born, a chance for the city's less fortunate children to participate in organized soccer tournaments.

>> Robert Ortiz:
A lot of them are not well funded. They play with what they have. And they do the best they can.

>> Reporter:
The project provides free uniforms, equipment and brings soccer teams from all over the Valley together. Using his position as vice-president of merchandising, Robert called on suppliers, partners and retailers to pitch in. Now in its fourth year, Ortiz says the response has been amazing.

>> Robert Ortiz:
That first year there was more people than we imagined. We were looking for 5,000 people. We have 25,000 people. So we knew that we had something. We knew that the community embraced it.

>> Reporter:
Ortiz also works on many scholarship and community initiatives with Food City and is happy his position allows him to give back.

>> Robert Ortiz:
I think of myself as a giving person. I have always been compassionate. You always want to help others that don't have it as good as you do.

>> Reporter:
Robert Ortiz, our 2005 Exemplary Leadership Honoree.

>> Jose Cardenas:
Ortiz hopes to expand COPA Food City to include teams statewide. He credits his team of volunteers for making the project a success. For transcripts and other information on this show, go to our web site www.azpbs.org and click on "Horizonte." That's all for tonight. I'm Jose Cardenas. We'll see you next week on "Horizonte." Have a good evening.

Max Gonzales: Hispanic Business Segment Manager, SRP;

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