Houston investor and entrepreneur Tom Castro feared some Latino households might miss out on money coming to them in the latest pandemic relief package, so he started by helping the Ramirez family find more than $20,000, to start.
Then he helped the family, who own a restaurant, realize that they could tap a loan of thousands of dollars more for their employee payroll under the Paycheck Protection Program. It's a loan, but it has lenient rules for forgiving the loan. That put the funds available to them at over $100,000.
The news stunned the husband and wife, who have four children under 18 and preferred not to be interviewed. The family and Castro met through his charter school work.
“They were skeptical. They were skeptical,” Castro said of the Ramirezes' reaction when he added it all up for them. “They said, ‘This is a loan, right?’ No, it’s a gift.”
The Ramirez family raised other concerns. They hadn’t filed their 2020 taxes yet. They thought the aid was for people on food stamps or welfare. There was a pride factor and fear that their futures in the country — they're legal residents and hope for citizenship — could be in jeopardy.
Many immigrant families stopped using public benefits or steered clear of them, even if they were eligible for them, fearing that Trump administration policy changes might jeopardize their chances for legal permanent residency or citizenship. And the first aid package left out many immigrants who pay taxes.
“They are immigrants, and the word on the street was immigrants weren’t eligible” for stimulus checks “because Trump said they couldn’t participate,” Castro said.
A majority of American families will get money from the latest relief package, but Castro and others fear that some Latinos won’t seek out all the law offers them for reasons similar to those the Ramirez family raised.
Latinos were disproportionately hit by the pandemic — economically and in deaths and illness.
Hispanics had just regained earnings and wealth at levels they had had before the Great Recession in 2008. Missing out on the aid could slow not only their recovery, but also the economic recovery.
“This could be the biggest single injection of capital into the Latino community — by a factor of 10 — in history,” Castro said. If all Latinos claimed what they are entitled to in the pandemic package and the paycheck loan program, the total could be nearly $60 billion, he said.
At the U.S. Hispanic Chamber of Commerce’s legislative summit last week, President Joe Biden and Treasury Secretary Janet Yellen hailed the potential for Latino families and business owners to help drive the economic recovery because of the share of American workers who are Latino and the number of small businesses Latinos create.
Democrats designed the stimulus payments the way they did not because they thought everyone was missing meals, but to stimulate the economy, Castro said.
Many Latino families don't have the luxury of hanging on to the payments or putting the $1,400 away in savings or 401(k) accounts, Castro said. They will spend every penny because they need to, and “they are going to pay taxes, sales taxes and help create jobs,” he said.
Every member of the Ramirez family is entitled to a $1,400 stimulus check — a total of $8,400 for the six family members. Married couples who file jointly and earn less than $150,000 get $1,400 each, and so do their dependents who are 17 and under.
In addition, three Ramirez children are eligible for another $3,000 — paid in monthly allotments — and their child under 6 is eligible for $3,600. Altogether, that's $21,000 in cash benefits.
The monthly allotments for the children, if that's how they're done, would come through a reworking of the child tax credit.
The White House has estimated that 85 percent of Americans will get some sort of payment.
A tough year
For Claudia Gonzalez, 49, who worked as Castro’s assistant before she left for health reasons, the additional money for her children will be a big help. The family had a tough pandemic year.
They missed the first round of $600 checks because her husband wasn't yet a legal resident, and at the time he didn't have a Social Security number. He is a legal permanent resident now, and she is a citizen, as are her children.
Gonzalez said the couple had to let go of three of the four employees of her husband’s “very small” commercial and residential landscaping business. Some hotel clients whose rooms were vacant failed to pay him for months of work.
When one of their business trucks broke down, they used the truck their son had bought with savings from Christmas and birthday gifts. They tried to get a $25,000 to $30,000 loan through the Payment Protection Program, but they couldn’t get through the red tape.
Last week, Biden extended the deadline to apply for paycheck protection loans to May 31.
Gonzalez said she and her husband will apply again, expecting the worst. She, too, expressed hesitance about taking any money.
“People have painted Latinos as people with their hand out,” she said. “There’s a lot of Latinos that will do everything in their power to not go to the handout."
The paycheck protection loans can make a difference in rebuilding Latino wealth.
Juan Proaño, founder of Plus Three, a technology company that assists nonprofits, said the company lost more than 30 percent of its revenue in the second quarter of last year because of the pandemic.
He was unable to get a paycheck protection loan through Bank of America, his bank, despite three tries. He eventually got a loan through PayPal’s loan builder program.
'The money is available, but people have got to use it'
And that’s the challenge, ensuring that Latinos are educated about what they are entitled to, despite cultural hesitation and ways they may disqualify themselves, Castro said.
Ramiro Cavazos, president and CEO of the U.S. Hispanic Chamber of Commerce, said the organization dispensed grant money to the many Hispanic chambers around the country. The grants were then given to Latino-owned businesses. The chamber is also trying to help the businesses get the money available to them in the Paycheck Protection Program.
"We are a community that believes in comebacks," Cavazos said. "It is part of our DNA as a community."
Castro suggested mobilizing college students, churches, Latino groups and employers with large Latino workforces to ensure that Latinos get the money they are due.
“This is a little like the vaccination program,” Castro said. “The vaccine is available, the money is available, but people have got to use it, or it doesn’t work.”