Commissioner Luis A. Aguilar
Sept. 17, 2013
Federal Trade Commission
National Hispanic Heritage Month
I must thank Chairman Ramirez for her kind introduction. She is an accomplished leader and a role model to many. I was thrilled when I heard the news that she was going to be the Chairman of the Federal Trade Commission (FTC) - and, as a result, would be the first member of an ethnic minority to chair the FTC in it’s almost one hundred years of history.[i]
It is an honor to be at the FTC, an agency that was created when President Woodrow Wilson signed it into law on September 26, 1914 – twenty years before the Securities and Exchange Commission was created in 1934. Moreover, it is also an honor to be in the building where President Franklin Roosevelt laid the cornerstone. In fact, President Roosevelt remarked at the time, “May this permanent home of the Federal Trade Commission stand for all time as a symbol of the purpose of the government to insist on a greater application of the golden rule to conduct the corporation and business enterprises in their relationship to the body politic.”[ii]
I am struck by the commonality between our two agencies - the SEC and the FTC have similar missions – the SEC is charged with protecting investors, and the FTC is charged with protecting consumers.
Before I continue, I have to issue the standard disclaimer that the remarks I make today are my own and do not necessarily represent the views of the Commission, the other Commissioners, or the staff.
It is truly a pleasure to be here with you to celebrate Hispanic Heritage Month. Today, I am going to use my time to speak about the following:
- A bit of the history behind National Hispanic Heritage Month;
- The current changing demographics of America; and
- The resulting opportunities and challenges.
History of Hispanic Heritage Month
Each year, Americans observe National Hispanic Heritage Month from September 15 to October 15. It is a time to celebrate the histories, cultures, and contributions of Hispanic and Latino Americans. The people in this category are by no means homogenous or monolithic. Hispanic and Latino Americans reflect many cultures, nationalities, and a diversity of experience. In fact, the references to Hispanic and Latino Americans can describe Americans who are recent immigrants and refugees, as well as those whose families were here before there was even a United States of America.
Interestingly, the precursor to a National Hispanic Heritage Month began in 1968 when President Lyndon Johnson issued a proclamation which stated in part:
“Wishing to pay special tribute to the Hispanic Tradition, and having in mind the fact that our five Central American neighbors celebrate their independence day on the fifteenth of September and the Republic of Mexico on the sixteenth, the Congress . . . has requested the President to issue annually a proclamation designating the week including September 15 and 16 as National Hispanic Week.”[iii]
Between 1969 and 1988, Presidents Nixon, Ford, Carter, and Reagan followed in the steps of President Johnson and issued a series of annual proclamations that designated a National Hispanic Week. Finally, in 1988, Congress passed a law permanently establishing National Hispanic Heritage Month.
Changing Demographics of America – A Snapshot
It is interesting to contrast the Hispanic population from 1968 – when the first National Hispanic Week was designated – to today. In 1968, Latinos represented only about 4½% of the total U.S. population.[iv] Today, the Census Bureau estimates that Hispanic-Americans make up 16.7% of the U.S. population.[v] Here are a few sample percentages from the states with the most sizable Hispanic populations. As of the 2010 Census, the Hispanic population constitutes the following: New Mexico is at 46.3%, California is at 37.6%, and Texas is at 37.6%. Today, Hispanics constitute the largest segment of the ethnic community in America and the population continues to grow.
As a group, Hispanics have made significant contributions to our economy, by starting new businesses, creating jobs, and utilizing their purchasing power as consumers. For example:
- Nationally, there are over three million Hispanic-owned companies with over $500 billion in revenue;[vi]
- Hispanic immigrants make up 28% of small business owners nationally;[vii]
- New Latino entrepreneurs nearly doubled, from 10.5% to 19.5%, between 1996 and 2012;[viii]
- The Immigration Policy Center estimates that the purchasing power of Hispanics alone will reach $1.5 trillion a year by 2015;[ix]
- The numbers of Hispanic firms are growing more than four times faster than the overall number of U.S. firms;[x] and
- If it were a nation in itself, the U.S. Hispanic market would be one of the top ten economies in the world.[xi]
The Future – Opportunities and Challenges
Recently, I had the privilege of participating in the commemoration of the 50th Anniversary of the March on Washington. At the time, I was struck by how much progress had been made since the day Martin Luther King, Jr. spoke so eloquently about his “dream” – while, at the same time, recognizing that significant progress is still needed. Clearly, the successes and the challenges are intertwined, and significant.
I feel much like that when I reflect on the future for Hispanic and Latino Americans. There are tremendous opportunities as well as challenges ahead and I want to highlight just a few.
On the opportunity side of the ledger, the potential for immigrants to grow our economy is enormous. This is particularly true of the Hispanic community, the fastest growing segment of the immigrant population. Clearly, Hispanic and Latino Americans will continue to play an important role, as our nation faces the challenges of the 21st Century.[xii]
Today’s young Hispanic and Latino Americans will be our teachers, our doctors, lawyers and engineers, our business leaders and entrepreneurs, and our elected officials and community leaders of tomorrow. There is no doubt that young Hispanic and Latino Americans will continue to contribute in greater numbers to the success of this nation.
For example, in 2011, for the first time, the number of 18- to 24-year-old Hispanics enrolled in college exceeded two million, reaching a 16.5% share of all college enrollments.[xiii] This milestone represented not just population growth, but also increasing high school graduation rates, which rose from just 64% in 2000 to 78% in 2010.[xiv] And just recently, a report by the Pew Research Center found that a record 69% of all Hispanic-American high school graduates in the class of 2012 enrolled in a two-year or four-year college that fall. That is a college enrollment rate higher than that of white high school graduates.[xv]
However, while there is reason for optimism, I am concerned that more needs to be done to address the looming challenges. For example, earlier this year, the Urban Institute released a report[xvi] entitled, “Less than Equal: Racial Disparities in Wealth Accumulation” that focused on the wide racial wealth gap between whites and communities of color - a gap made wider by the impact of the Great Recession.
First, let’s examine the growing racial wealth gap – why does it matter? The authors of the report define wealth, as opposed to income, as
“Wealth isn’t just money in the bank, it’s insurance against tough times, tuition to get a better education and a better job, savings to retire on, and a springboard into the middle class. In short, wealth translates into opportunity.”[xvii]
Regrettably, there is a significant wealth gap between the races. By 2010, the average wealth of white families was roughly over a half a million dollars higher than the average wealth of black and Hispanic families.[xviii] It is particularly important to note that blacks and Hispanics are less likely to own homes and have retirement accounts than whites, so they miss out on the automatic behavioral component of these traditionally powerful wealth-building vehicles. Moreover, it has also been documented that lower-income families are more likely to withdraw assets from their retirement savings if they suffer a job loss, or other adverse event, because they have less wealth as a cushion.
It has also been reported that while the recent Great Recession had a devastating impact on all communities, the impacts were much more devastating on communities of color. Between 2007 and 2010, Hispanic families lost 44% of their average wealth and African-American families lost 31% of their average wealth - while white families lost an average of 11%.[xix]
Lower home values also drove the significant wealth loss among Hispanics.[xx] As described by the Urban Institute:
Many Hispanic families bought homes just before the Great Recession, and because they started with higher debt-to-asset values, the sharp decline in housing prices meant an even sharper cut in Hispanics’ wealth. As a result, they were also more likely to end up underwater or with negative home equity. Between 2007 and 2010, Hispanics saw their home equity cut in half.[xxi]
While the Great Recession did not cause the wealth disparities between whites and minorities, it did exacerbate them.
It is clear more needs to be done to facilitate basic wealth accumulation in communities of color, particularly within the Hispanic community. These are the issues that policymakers will have to wrestle with as the Hispanic community grows to an even larger percentage of the American population.
Moreover, at the top of our corporate institutions the racial diversity numbers are not significantly improving. In the Fortune 100, between 2010 and 2012, Hispanic and Latino directors composed less than 5% of the total board seats.[xxii] In fact, the Alliance for Board Diversity, which has been tracking these numbers for nearly a decade, has concluded that women and minorities have made only small gains in increasing their representations in corporate boardrooms over that time.[xxiii] At a time when there are so many attractive candidates, it is not justifiable that these numbers are not changing at a faster pace. It is an issue I consistently raise with Corporate America and will continue to do so.
Clearly, there are challenges ahead – but there are also tremendous opportunities on the horizon. National Hispanic Heritage Month is a good time to gather the momentum to take stock of history and to assess both the opportunities and challenges currently facing the Hispanic and Latino American community as a whole.
Although I know that it will take hard work and perseverance, my faith in the American Dream and the boundless opportunities offered by the United States make me optimistic that the future is bright.
Thank you for having me here today.
[i] White House elevates a Commissioner to Chairwoman of the F.T.C., Edward Wyatt, New York Times (Feb. 28, 2013), available at http://www.nytimes.com/2013/03/01/business/obama-set-to-appoint-edith-ramirez-to-fill-top-ftc-post.html?_r=0.
[ii] “President Franklin D. Roosevelt, “Address at the Cornerstone Laying Ceremonies for the New Federal Trade Commission Building,” (July 12, 1937), available at http://www.presidency.ucsb.edu/ws/?pid=15436.
[iii] Presidential Proclamation 3869, President Lyndon B. Johnson (1968).
[iv] U.S. Census Bureau, “Hispanics in the United States,” available at http://www.hacu.net/images/hacu/conf/2010CapForum/RobertoRamirezHispanicsInUS2008.pdf. (Hispanic population in the United States was 9.6 million, or 4.7%, pursuant to the 1970 census.)
[v] U.S. Census Bureau News (August 6, 2012), available at http://www.census.gov/newsroom/releases/pdf/cb12ff-19_hispanic.pdf. (According to U.S. Census Bureau estimates, the Hispanic population of the United States as of July 1, 2011, was 52.0 million, making Hispanics the nation’s largest ethnic or race minority. In addition, there are 3.7 million residents of Puerto Rico, a U.S. territory. http://www.census.gov/popest/data/national/asrh/2011/index.html.)
[vi] “The Latino Coalition 2013 Small Business Summit Reaches New Heights and Showcases the Impact of Small Business to the U.S. Economy,” The Wall Street Journal (May 6, 2013), available at http://online.wsj.com/article/PR-CO-20130506-902461.html?mod=googlenews_wsj.
[vii] Fiscal Policy Institute, “Immigrant Small Business Owners – A Significant and Growing Part of the Economy” (June 2012), available at http://www.fiscalpolicy.org/immigrant-small-business-owners-FPI-20120614.pdf.
[viii] Robert W. Fairlie, “Kauffman Index of Entrepreneurial Activity 1996-2012,” Ewing Marion Kauffman Foundation (April 2013), p. 9, available at http://www.kauffman.org/uploadedFiles/KIEA_2013_report.pdf.
[ix] Immigration Policy Center, “Strength in Diversity: The Economic and Political Power of Immigrants, Latinos, and Asians in the U.S.” (June 2012), available at http://www.immigrationpolicy.org/sites/default/files/docs/Strength%20in%20Diversity%20updated%20061912.pdf.
[xi] The Nielsen Company, “State of the Hispanic Consumer: The Hispanic Market Imperative” (Quarter 2, 2012), http://es.nielsen.com/site/documents/State_of_Hispanic_Consumer_Report_4-16-FINAL.pdf.
[xii] National Public Radio program broadcast, “College-Bound Latino Students at New High,” (August 22, 2012), transcript available at http://www.npr.org/2012/08/22/159777934/college-bound-latino-students-at-new-high. (James Montoya, College Board: “… we cannot underestimate the essential role that Latinos in the U.S. will play in reaching our national goal of 55 to 60 percent of young Americans 25 to 34 having a college degree. … to keep the U.S. as a leader in an increasingly global economy …”
[xiii] Richard Fry and Mark Hugo Lopez, “Hispanic Student Enrollments Reach New Highs in 2011,” Pew Research Hispanic Center (August 20, 2012), p.4, http://www.pewhispanic.org/2012/08/20/hispanic-student-enrollments-reach-new-highs-in-2011/.
[xiv] Richard J. Murnane, “U.S. High School Graduation Rates: Patterns and Explanations,” National Bureau of Economic Research, NBER Working Paper No. 18701 (January 2013), http://www.nber.org/papers/w18701. (In this instance, “graduate” refers to those who obtain a regular high school diploma and does not include students obtaining a GED.)
[xv] Richard Fry and Paul Taylor, “High School Drop-out Rate at Record Low, Hispanic High School Graduates Pass Whites in Rate of College Enrollment,” PewResearch Hispanic Center (May 9, 2013), http://www.pewhispanic.org/2013/05/09/hispanic-high-school-graduates-pass-whites-in-rate-of-college-enrollment/.
[xvi] “Less than Equal: Racial Disparities in Wealth Accumulation,” by Signe-Mary Mckernan, Caroline Ratcliffe. Eugene Steuerle, and Sisi Zhang, Urban Institute, April 2013, http://www.urban.org/UploadedPDF/412802-Less-Than-Equal-Racial-Disparities-in-Wealth-Accumulation.pdf. (hereinafter, “Racial Disparities in Wealth Accumulation”).
[xvii] Id at 1.
[xx] Hispanic Household Wealth Fell by 66% from 2005 to 2009, The Toll of the Great Recession. Pew Research Hispanic Trends Project (July 26, 2011).
[xxi] Racial Disparities in Wealth Accumulation, supra xv, at 2-3.