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Profitwise News and Views
December 2003 Special Edition
Morning Session Sandra Charvat Burke Ms. Charvat Burke discussed the four basic components of population change: births, deaths, move-ins and move-outs. She noted that since the 1950s, the height of the baby boom, the annual number of deaths has remained relatively constant, while births have steadily declined, though still exceed deaths by a significant margin. During the 1990s, net migration to Iowa was positive for the first time since the 1920s, with 49,000 more moving into Iowa than out. Population change due to births and deaths resulted in a net increase of just over 100,000 during the same period, the net population increase for the state was just under 150,000 for the decade. Ms. Charvat Burke went on to discuss trends in foreign-born Iowa and U.S. residents. In 2000, there were just over 91,000 foreign born Iowa residents versus 42,000 in 1990. In the century between 1890 and 1990, the number and ratio of foreign-born in Iowa steadily decreased. The year 2000 was the first census year in which an increase in foreign-born residents over the prior decade occured. In contrast, the ratio of foreign-born U.S. residents (nationwide) has ebbed and flowed in response to immigration policy since the mid-nineteenth century, peaking in the 20 years from 1890 to 1910 at roughly 14 percent, but was just under 5 percent by 1970. The ratio has been in ascent since 1970 and was over 10 percent in the decade prior to the 2000 census year. The number of foreign-born residents nationwide shows a more dramatic increase beginning in 1970, increasing from just under 10 million to over 30 million by 2000. In contrast to 1990 when Asian and European immigrants made up the largest segments of foreign-born residents, by 2000 Latinos represented the largest ethnic group, Mexicans being by far the most prevalent nationality among foreign-born residents of Iowa. The number of foreign-born residents of Iowa by 2000 was more than double the number in 1990, increasing from just over 40,000 to roughly 90,000. More than one-third of foreign-born Iowa residents present in 2000 had arrived in the previous five years, and just over two-thirds of the foreign-born in 2000 were not U.S. citizens. However, among the immigrant population that had arrived in Iowa during the prior decade, approximately 10 percent have achieved U.S. citizenship. Among other key findings, in the early 1990s, the refugee population in Iowa tended to originate from Southeast Asia (Laos, Cambodia, Vietnam), but by the mid '90s, a significant proportion emanated from eastern Europe. By 1997, Bosnia was the main source of refugees in Iowa. Ms. Charvat Burke noted that seven of Iowa's 99 counties experienced more than 1000 percent growth in Latino population during the 1990s; several of these were counties with large meat and/or poultry processing operations. The number of Iowa residents that speak a language other than English at home grew by 60 percent from 1990 to 2000, from roughly 100,000 to 160,000. Not surprisingly, the number of Iowa residents enrolled in English language learning programs rose steadily during the same period, and the vast majority were Spanish speakers. Finally, Ms. Charvat Burke showed that the age distribution among Hispanic, Asian and all minority residents of Iowa, in contrast to majority residents, is heavily weighted toward younger age groups, suggesting that industry in the state will rely more heavily on an immigrant and minority labor pool in the coming decades. José Luis Cuevas Mr. Cuevas began with a discussion of the decision by the Mexican government to open a consular office in Omaha. The consulate serves the Midwest states of Nebraska, Iowa, North Dakota and South Dakota. The decision of the Mexican government to open its forty-fifth U. S. based consulate in Omaha was due to the large number of new immigrants arriving in the American heartland, either as new immigrants or migrating from other states. At the time the consulate opened in 2000, the Midwest Mexican population was approximately 320,000; presently it is well over 3.5 million. With the growing Hispanic population becoming the largest minority group in the United States, an estimated 38.8 million, representing 13 percent of the U.S. population, the need for consulate representation has increased. The majority of Mexican immigrants come from Mexico City and the state of Michoacá, Jalisco, Guerrero and Zacatecas. The trend within the Mexican immigrant population is to move out of the traditional receiving sates of California, New Mexico, Arizona and Texas, and increasingly into states that until recently were not associated with large immigrant arrival including Iowa, Nevada, Colorado, North and South Dakota. To better serve the growing Hispanic populations in these new areas, the Mexican government has opened offices in Las Vegas and Indianapolis, and relocated the St. Louis office to Kansas City, Missouri. Mr. Cuevas continued by discussing the economic contributions made by immigrants in the United States. Citing Federal Reserve Board Chairman Alan Greenspan in testimony to Congress in 2001, Mr. Cuevas stated that immigrants contribute $27 billion dollars to state and local economies annually, the difference between what immigrants pay in taxes, $70 billion, and what they receive in the form of services, $43 billion. Referring to the controversy surrounding the issue of undocumented workers, Mr. Cuevas noted that studies by various institutions show that undocumented workers nationwide pay billions of dollars in state and local taxes, as well as Social Security and unemployment insurance, from which they will realize no benefits. For example in 2001, contributions to local and state taxes amounted to $732 million in California, and $547 million in Illinois. Referring to a Fortune magazine story from November 26, 2001, Mr. Cuevas stated that in the year 2000, undocumented immigrants contributed more than $200 billion to the national economy. Mr. Cuevas stated that banks in the United States are aware of the burgeoning immigrant population and the market they represent. In addition to an existing substantial consumer lending market and deposit service, U.S. banks are going after an increasingly large remittance market. With an average transaction of $310 per Mexican national in the U.S., remittances to Mexico reached $10 billion last year. In order to tap this market, U.S. banks, in compliance with the USA PATRIOT Act1, are accepting the Matricula Consular identification cards to allow Mexicans to open bank accounts and take advantage of other services such as remittance programs. Mr. Cuevas provided some history on the Matricula Consular. The Matricula Consular is an identity document issued by a Mexican consulate to Mexican Nationals living abroad. Begun in 1871, the Matricula Consular is an official record for the Mexican government to track citizens who have received services at a consular office, such as notary, birth, death and marriage registration services. In 2002, Mexican consular offices issued over 1.4 million Matricula Consular cards in the United States. Mexican nationals living in the United States must present an original birth certificate and official photo identification that is recognized either by the Mexican government (e.g., Mexican passport), or by the U.S. federal or state government, such as driver's license or green card (permanent residency and work visa), in order to receive a Matricula Consular. Proof of residence for at least six months in the consular jurisdiction is also required. The new cards have been updated to include several sophisticated security features to prevent counterfeiting. Future cards will include a codified fingerprint in the bar code. Proof of identity to law enforcement agencies and bona fide identification in the U.S. are seen as the major reason for issuing the cards. The Matricula Consular is currently accepted by: police departments in four states, most airports, many U.S. banks including; Wells Fargo, U.S. Bank, and Bank of America: and the Departments of Motor Vehicles in Nebraska and South Dakota. Mr. Cuevas concluded with a discussion of the need for current and future Mexican immigrant workers in the U.S. By the year 2005, the state of Iowa is expected to lose 40 percent of its workforce as people reach retirement age. New immigrants seeking work can fill blue-collar jobs no longer desirable to most working class Americans. These new immigrants bring with them their culture, but also an eagerness to learn, work and "an urgency to belong." Notes: Jim Elliott Mr. Elliott began by describing the responsibilities of the organization. ILA provides representation to victims of domestic violence, people who lose shelter through eviction or foreclosure, and those who are trying to access disability benefits. ILA represents people who would otherwise represent themselves, causing a significant burden in the court system. The goal is to provide "access to justice" for all Iowans, though most clients fall below 125 percent of the area median income by U.S. Department of Housing and Urban Development (HUD) standards. Mr. Elliott went on to describe the mission of ILA in the context of aid to immigrants.He stated that the organization receives funding from approximately 50 sources, and that federal funding places restrictions on the group. It cannot provide direct representation to non-documented immigrants, but can advise those individuals of their legal rights and responsibilities. The only exceptions among the undocumented are certain victims of domestic violence. ILA's work with immigrant households has revealed that many are a mix of U.S. citizens, documented and undocumented residents. Many are migrant workers simply looking to improve income and opportunities for their families. Mr. Elliott indicated that for each attorney in his organization, there are approximately 7,000 eligible clients, and that there is much more need than ILA can address. ILA must prioritize its areas of assistance. Critical needs include access to healthcare (particularly among elderly), housing, consumer education, employment, income maintenance, and individual rights. Family law is the most frequent need for ILA clients; more of these cases involve domestic violence. Almost 60 percent of casew that go to trial involve family law; most are domestic violence cases. Housing related issues are another key area for which ILA provides services. Housing is a frequent area of concern on several fronts. Iowa has a large proportion of older housing stock, and many immigrants live in substandard housing. According to Mr. Elliott, and noting that landlord-tenant laws apply regardless of the immigration status of the renter/occupant, some landlords have used tactics such as threatening to report individuals to the Immigration and Naturalization Service (now the Bureau of Immigration and Customs Enforcement) to intimidate renters. Migrant work camps must meet certain state standards, but according to Mr. Elliott the standards are low. Overcrowding, unfair rental practices and questionable landlord practices are common issues that ILA addresses. The Survivors and Families Rural Access Project is targeted to survivors of domestic violence and provides services ranging from restraining orders to assistance in accessing public benefits, and assistance with other civil matters such as tenant/landlord grievances and debt management. Housing discrimination, according to Mr. Elliott, remains a major issue in Iowa. ILA has been involved in housing related litigation periodically. A case that ILA litigated involved Hispanic immigrant residents of a mobile home community. The town government where the community was located bought the mobile home park and decided to shut it down, citing poor conditions, but also effectively displacing half of the town's Hispanic immigrants. Mr. Elliott stated that the poor conditions stemmed from the town's negligence of the roadway, water and sewer infrastructure around the mobile home community. ILA sued the town government and prevented the closing of the community. The court recognized the disparate impact of the closing of the park on minority residents of the town. Capacity is an ongoing issue for ILA. Ten regional offices allow ILA to further serve residents in outlying areas of the state. Two statewide programs improve the scope and effects of ILA's outreach. One is the "Statewide Intake for Callers Using English as a Second Language" program. The other is the "Statewide Services for Iowans 60 and Over." Other special projects include the Low-Income Tax Payer Clinic. ILA provides information to low- and moderate-income residents and immigrants about their rights and obligations under the tax code, and assistance in accessing the earned income tax credit to eligible recipients. ILA also advises clients about refund anticipation loans, as they tend to be very high cost loans with little net value to taxpayers expecting refunds. The services are offered in a variety of languages aside from Spanish, including Russian and Bosnian. Another program targets migrant and seasonal workers, Justica Para Todos (Justice for All), and provides assistance related to problems that arise due to high employee turnover. These workers are involved in seed corn, poultry and meat processing industries. Immigrants in Iowa, in addition to being low-income, have language access problems, and they are largely undocumented. Often, in many contexts, doctors' offices, or the courts, for example, children are relied upon as interpreters for their parents or relatives. This remains a barrier in Iowa to a greater extent than in larger metropolitan areas. State agencies, local governments and schools do not "think creatively" about providing services to non-English speaking immigrants. Title VI of the Civil Rights Act applies to any entity receiving federal funds, and provides that discrimination based on language is discrimination based on national origin, and is illegal. Title VI covers limited English proficiency, but according to Mr. Elliott, the state does not do an effective job of enforcing its provisions. A recent Supreme Court ruling stated that individuals could not sue based on Title VI provisions.1 In the course of "Feeding Iowa's New Immigrants" program, a research initiative, ILA discovered that in the context of food stamps, school lunches and WIC (Assistance for Women, Infants and Children), people who would access these programs had mixed households. That is, some in the household were documented and some were not. Applicants reported all household income, including that of undocumented workers. When the Department of Human Services seeks to verify income of undocumented workers with an employer, that worker is usually discharged. Title 19, HAWK-I (Healthy and Well Kids in Iowa), provides medical insurance to low-income Iowans, but is not available to undocumented workers. Some meat packing plant workers that may not have complete documentation may still be eligible for the employer's health insurance. Initially, the worker may have some health insurer through that source, but the high turnover rate at meat packing plants, with workers moving on for various reasons to other types of work, results in many workers simply having no health insurance at all. Another benefit program, the General Relief Program, which represents the most basic safety net for low-income Iowa residents, is administered at the county level and each Iowa county has one. It does not provide cash for beneficiaries, but will provide assistance with rent, health care and other relief. Even though there is a residency requirement in most ordinances, there is no citizenship requirement. General Relief is not available to undocumented residents. Notes: 1Alabama Dept. of Public Safety v. Sandoval, 532 U.S. 275. Leo Prieto Mr. Prieto began by drawing on personal experiences of being a new immigrant, and pointed out that all immigrants go through a learning process to understand and function in American society. This learning process can be long, stressful, intimidating and at times embarrassing for immigrants. The learning process for newly arrived immigrants encompasses everything from understanding speed limits to how to order food at a restaurant. During the learning process, Mr. Prieto emphasized that established Americans need to "have patience with the newcomers, and having a sense of humor can only help during encounters. Immigrants have to learn how things work in a host community, and many Americans need to learn that a different way of doing things is not right or wrong, it's just different." Hispanics are used to a different style in conducting business, and understanding those differences goes a long way in creating successful businesses. For instance, Hispanics are not accustomed to the American idea of "personal space" of approximately three feet. Hispanics are used to being up close to the person with whom they are conducting business. "The closer you are in, the more trusted you are." When an American stands away from a Hispanic (unfamiliar with American customs) while conducting business, the Hispanic interprets this as a signal the American does not want to do business, or doesn't trust them. Likewise, Hispanics are not used to the impersonal atmosphere of banks and branches where customers wait in line behind a rope for the next available teller to assist them. Hispanics by contrast are generally used to someone approaching and greeting them when they enter a business. In this way, business owners are stating their interest in the customer and his/her potential business. Mr. Prieto also reminded the audience that there are 24 countries in Latin America, and they have differing cultures. A demographic analysis of the market area is essential to know who potential customers will be; not all Hispanics can be treated as if they come from Mexico. A successful business owner needs to be interested in knowing the community first, before expecting customers to walk into a storefront. Mr. Prieto defined emerging markets as "a new philosophy in conducting business transactions throughout the mortgage and banking industry...fueled by the demographic changes in our society." The new emerging market is the first-time homebuyer or bank customer, who is from a low- or moderate-income households and belongs to a minority, immigrant or ethnic group, but primarily immigrants, especially Hispanics. The growth in the Hispanic population in the last few years represents a market that businesses ignore at their own peril. There are currently 38.7 million Hispanics in the United States, exceeding the United States Census expectations. If the trend continues, by the year 2020 there will be 82-85 million Hispanics in the United States-one out of three U. S. residents will be of Hispanic origin. Mr. Prieto outlined a few steps Wells Fargo has undertaken that support the immigrant community, and that are used to attract potential bank customers:
Mr. Prieto ended by noting that the greatest advantage any company can have in reaching out to the immigrant community is an interest in its people. Finding out what they are interested in and understanding how they conduct business in their home country goes a long way to attract and retain customers. Andria Macias-Castillo Ms. Macias-Castillo discussed the difficulties undocumented workers encounter accessing traditional bank products and services, and noted the demographics of families that use HER services. Most parents are in their twenties and have three to five children. Households frequently include grandparents, aunts, uncles and cousins. Families typically pay for services with cash; check use is rare. Ninety-eight percent of families are either at or below poverty level. Ms. Macias-Castillo answered the question, "why don't Latinos worry about financing?" by explaining that Latinos do save, but in ways different from Americans. Latinos usually have cash stored at home, which is perceived as safer than a bank. This attitude stems from mistrust of banks in many Latin American countries, and the lack of understanding of the secure nature of the U.S. banks and concepts such as compound interest. Latinos also do not save for retirement, she stated, relying on extended family care for relatives in old age. "We provide for each other as a family," Ms. Macias-Castillo noted. Because of the differences in perception, Ms. Macias-Castillo pointed out that to penetrate the Latino market, financial institutions must adapt their products and services. Financial institutions need to appeal to the family as a whole, as individuals in the family rarely adopt new methods independently. Ms. Macias-Castillo also pointed out that financial institutions need to recognize that Spanish, as the dominant language spoken in immigrants' homes, will not diminish even in successive generations. The proximity to Mexico and ease of travel south of the border, and the accessibility of information in Spanish makes English proficiency a low priority to many immigrant families. Ms. Macias-Castillo concluded with a list of five aspects of the Hispanic culture that must be considered to succeed in penetrating the Latino immigrant market:
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