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In the months immediately after September 11, the Hispanic market got a lot of press highlighting its resiliency to recession. The Wall Street Journal, for instance, reported that even with dwindling consumer confidence and retail sales, businesses in heavily Hispanic areas were experiencing sales growth.
But since then, the impact of the economic slowdown has trickled down. "I cannot support the view that Hispanics are 'anti-recessionary,' " says Carlos Santiago, co-founder of Santiago & Valdes Solutions, a San Francisco multicultural marketing consulting firm. Santiago points to reports showing Latino unemployment rates hit 7.6 percent in December due to job loss in the tourism, restaurant, agriculture and textiles industries, as well as layoffs among part-time workers, who, Santiago says, tend to be Hispanic and African American.
While Santiago won't go as far as to say that Hispanic consumers are recession-proof, he says the Hispanic market is more resilient than most because 40 to 50 percent of its population immigrated to the United States from far worse economic conditions, like severe inflation, 40 percent unemployment and currency devaluation. "These are hard times, but not the worst they've seen," he says. Hispanics are most likely to hold two jobs; and while they may be considered lower-skilled, they're also multiskilled.
Despite the recession, Santiago says Hispanic consumers won't be cutting back on children's clothing, educational merchandise and toys; music, "one of the main culture havens for Hispanics in the United States"; and personal care products.
Adrian Martinez, the founder of Morusa Records, a Los Angeles music label focusing on Latin artists, and Monica Ramirez, founder of Zalia International Ltd., a line of cosmetics for Hispanic women, both attest to the steady buying power of Hispanics. Ramirez, 29, says she hasn't felt the recession: traffic at her Web site has doubled in the past year, and sales for the Woodmere, New York, firm have gone up since September 11. Similarly, Martinez, 30, December 2001 saw sales of 1,800 CDs, compared to 1,500 a month normally.
"I think people will always need music in their lives, especially when times are tough," says Martinez. "They'll always have to turn to something upbeat. Thank God!"