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UCLA LPPI Releases Report on Arizona Ethnic Small Business Owners

The third research report of The Economic Recovery and Entrepreneurship Project series sheds light on financial, environmental, and pandemic challenges faced by ethnic-owned businesses in Arizona.

LOS ANGELES (December 6, 2023) – The UCLA Latino Policy and Politics Institute (UCLA LPPI) has released a new research report focusing on ethnic small business owners in Arizona. This report is a part of The Economic Recovery and Entrepreneurship Project (TEREP), which provides insights into ethnic small business owners’ access to capital, their engagement with environmental sustainability practices, and the impacts of COVID-19 and climate change on their enterprises.

After collecting data from over 400 Arizona small business representatives using phone and web surveys, this groundbreaking study has revealed several key findings:

• Black and Latino-owned businesses face more barriers than white-owned businesses to accessing financial capital. Among those experiencing challenges obtaining funds or capital, the most common barrier Black- and Latino-owned businesses identified was an insufficient amount of financial capital (71% and 68%, respectively).
• Ethnic-owned businesses continue to fight an uphill battle to recover from COVID-19. Black-owned businesses were more likely to report that the COVID-19 pandemic had a “large negative effect” (60%) than Latino- and white-owned businesses (41% and 46%, respectively).
• Ethnic-owned businesses were more likely than white-owned businesses to acknowledge the impacts of climate change. Latino- (43%) and Black-owned businesses (42%) were more likely than white-owned businesses (29%) to rank climate change risks as a high or medium priority.
• Ethnic-owned businesses are actively engaged in environmental sustainability planning. Black-owned (38%) and Latino-owned businesses (23%) were more likely to report that they intended to develop a formal sustainability plan in the future compared to white-owned businesses (19%).

Economic and environmental burdens that small businesses face have tangible consequences that affect the viability of minority-owned businesses. John Samora, owner of The Greenhouse on Woodland, a wedding venue, acknowledges the impact climate change will have in the coming years. He shares that he doesn’t think “there’s any question that climate change is going to impact [his business]” considering the rising temperatures in Arizona. He reflected, “Even though we have a big canopy of trees that keep things cool…we don’t have air conditioning in our building.” Climate change, Samora imagines, will have a material impact on his business. His experience is just one example of the multiple firsthand accounts capturing the complexities of small-business ownership in the study.

“As ethnic enterprises continue to grow in number, it is imperative that they be incorporated equitably in economic development processes as well as environmental sustainability planning. Ethnic enterprises play a vital role in their communities through job creation, generation of revenue, and promotion of social and cultural diversity,” said Rosario Majano, UCLA LPPI Research Analyst for the project.

“The racial and ethnic disparities that this research highlights are important for Arizona policymakers to consider as the state continues to recover from COVID-19 and faces increasing challenges due to extreme heat that disproportionately impact communities of color,” said Silvia R. Gonzalez, UCLA LPPI Director of Research.

This report was made possible by the generous support of the Wells Fargo Small Business Philanthropy, the JP Morgan Chase Foundation, and the James Irvine Foundation.

Read the full report here.

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About UCLA Latino Policy and Politics Institute 

The UCLA Latino Policy and Politics Institute addresses the most critical domestic policy challenges facing Latinos and other communities of color through research, advocacy, mobilization, and leadership development to expand genuine opportunity for all Americans.