Article

Exodus

By Hannah Wallace July 31, 2008

José Luis Ramírez spent much of the past winter tinkering in his tiny workshop in a trailer park off

Orange Avenue
in Sarasota. The results: a glass floor system with embedded decorative lights, a remote-control electric window blind for car interiors and a two-story aquarium. He was also trying to get his idea for a paint dispensing machine patented. And he took up teaching Latin dance, which provided him the social life he was never able to enjoy in his past eight years of working long days here.

But his new laid-back lifestyle wasn’t his choice: Since late last year, Ramírez hadn’t been able to find the full-time, $10-an-hour painting jobs in construction he had relied on in the past. His inventions and ballroom talents didn’t produce any income, and the pay for odd jobs and bussing tables on weekends was not enough to make ends meet, let alone to allow him to send money to his family in Mexico. In February, a Sarasota cop stopped him while he was riding as a passenger in his car, treated him rudely and ticketed him. The last straw was the death of his father back home in March.

“I didn’t even get to talk to my dad before he died,” says the mild-mannered 20-something. “And they don’t like us here. I think it’s time to go home.”

So in April, Ramírez stuck “For Sale” signs on his trailer and motorbike and decided to head back to central Mexico, after eight prosperous years in Sarasota.

Ramírez isn’t alone.

The flock at St. Jude, Sarasota’s leading Hispanic Catholic church, has shrunk between 10 percent and 15 percent since 2007, says Father Celestino Gutiérrez. Some, like Ramírez, are returning to their native countries. Others are moving to New Orleans, Texas, Tennessee, northern Georgia or the Carolinas, where there still are some construction jobs.

In many cases, fathers have left wives and children behind to look for jobs elsewhere, says Gutiérrez. And many of those who stayed put are struggling. The church is collecting donations to offer one-time financial help for parishioners who can’t pay their utility bills.

“There’s a lot of despair,” says Gutiérrez, a native of Spain who worked for years in Guatemala. “This is very costly in human terms; the biggest drama is the impact on children. The only reason many are not leaving is their children at school.”

Many Latino businesses in Sarasota are seeing drops of up to 70 percent in revenues this past year. On a late Friday afternoon, the La Villita store, which sells apparel and jewelry, was virtually empty. "Before, you would've seen this place full,” the owner says.

Without difficulty, she rattles off at least five Latino business owners who had to close locations for lack of clientele. Antonio Santa María is one of them. He had two Botas 3 Hermanas stores—one in Palmetto and another along U.S. 301 in Sarasota—that sell mostly boots. But at the beginning of 2007, people started leaving and his clientele started diminishing, he says. When Santa María could no longer afford the Sarasota lease, he shut down there. The store now sits with its green, white and red logo covered by a “for lease” sign.  

Retailers’ problems have traveled up the economic food chain. Luis Eduardo Barón has built a small but fast-growing Spanish-language publishing company since he arrived in Sarasota a decade ago. But he depends on retail advertising. When the numbers began declining last year, he mothballed most of his ambitious growth plans for his La Guía publishing group.

Most Latino businesspeople are still hanging in there. César Gómez, executive director of the Gulf Coast Latin Chamber of Commerce, says he hasn’t seen any bankruptcies among member companies. But most businesses have seen sales shrink, says the Colombian lawyer who came here in 2005. And he has seen smaller real estate offices and independent agents join bigger agencies, he adds.

“We Latinos are more used to coping with economic troubles,” Gómez says.

This is a harsh U-turn for the GulfCoast region. During 2000-2006, the Sarasota-Bradenton metro area ranked among the Top 10 in the United States for growth of the Hispanic population, according to U.S. Census Bureau estimates, not far behind Fort Myers-Cape Coral, which led the nation. But over the past six months, the area probably dropped a few dozen spots in that ranking.

Most economists agree that an immigrant influx translates to economic growth. There are no estimates as to the economic contributions of immigrants in the bicounty area. But according to a University of Georgia study, the buying power of U.S. Hispanics in 2007 reached $872 billion. To put it in context, this is larger than the GDP of all but nine nations in the world.

To be sure, it’s too early for statistical proof of a lasting remigration trend, says Stan Smith, director of the University of Florida’s Bureau for Economic and Business Research. The factors that make people emigrate from Mexico, Central America and the Caribbean—inequality, lack of support for agriculture, rural poverty, low-paying jobs for high-skilled workers—are still in place, and it people may continue to flock to El Norte.

In three out of four cases in this area, “immigrant” means Hispanic. And more than half of the nearly 50,000 Hispanic residents in the bicounty area have a Mexican background. So whatever happens in Mexico has a big impact on immigration here. But given the uneven state of the Mexican economy and the dependency of its manufacturing sector on the slowing U.S. market, Mexicans will probably still migrate north. Adding to Mexicans’ economic woes, as of Jan. 1, Mexico had to drop protective tariffs for imported corn and beans under the provisions of NAFTA. The influx of U.S.

and Canadian grains and beans is likely to push hundreds of thousands working in agriculture out of business, because Mexican growers cannot compete. This, in turn, will fuel emigration.

And if they keep coming, expect more economic growth here. Extrapolating from previous growth, the authors of the University of Georgia study expect U.S. Hispanic buying power to grow nearly 50 percent to reach $1.2 trillion by 2012.

Remittances—the funds workers send home—are the best barometer for immigration. Although dropping below the customary two-digit growth rates of the past decade, overall remittances in 2007 to Latin American and Caribbean nations from family members working abroad continued to grow (see table, page XX). But that growth is slowing down. In Florida, the share of the 1.3 million immigrants regularly sending money abroad dropped from 70 percent in 2006 to 48 percent this year, according to the Interamerican Development Bank. On April 30, Mexico’s central bank announced that remittances to the country fell by 2.9 percent during the first three months of 2008. This came after a lackluster 1-percent growth in 2007 (see table).

Even so, the bank—which attributes the downturn in remittances to stricter enforcement of immigration laws in the United States—still expects 2008 remittances to break last year’s record.

Indeed, some businesspeople report new immigrant arrivals and people coming back from other states, after leaving Florida for a few months.

“They keep coming from Mexico and other countries,” says Rosalía Holmlund, the Colombian-born owner of El Mariachi Loco in Bradenton. Holmlund offers a host of services to mostly Mexican customers, ranging from a restaurant to insurance, money wiring and check cashing. Many of her clients left late last year and early this year, causing a 30 percent to 40 percent dip in revenues. Her numbers began to recover in April, though. While the restaurant business remained slow except for weekends, her insurance, money order and check cashing business grew by 10 percent in March and April, she says.

“Some of them are coming back now,” she says. “They’re discovering that the climate is warmer here. We have Latin climate here. And they discovered that they’re less welcome in other states that aren’t used to immigrants. The police and government are better here.”

Other signs back up Holmlund’s optimism. The owner of La Villita says one business that had closed, Jenny's Bridal, is reopening. The Mexican consulate in Orlando, according to publisher Barón, is receiving more applications for consular IDs than ever from Mexican citizens in Central and Southwest Florida. And even Father Gutiérrez reports that, “by mistake,” some recent arrivals from Mexico and Central America have shown up at his church.

Still, the Southwest Florida exodus is a wake-up call to businesses and economic developers. It’s a reminder that the flow of low-salary, “dispensable” immigrants that fueled the construction boom and reinforced the area’s population growth-based economic development is not endless. The “fourth wave” of immigration in U.S. history, a period marked by Latin American migration that started in the mid-1960s and set records in the 1990s and early 2000s, might have peaked.

And the Hispanic exodus adds to the overall economic uncertainty in the area. It compounds the demographic cool-down announced by University of Florida researchers in March: UF’s Bureau of Economic and Business Research now projects that Florida’s population growth will shrink to the lowest level in three decades. BEBR director Stan Smith calls the projected addition of only 209,000 new residents to the state per year between 2007 and 2010—down from about 418,000 between 2002 and 2006—a “tremendous slowdown.” Young newcomers will be particularly missing in this picture, according to BEBR.

The sudden absence of thousands of Hispanic immigrants also has an indirect impact on companies that don’t primarily sell to that clientele. The immigrants send a lot of money home. But they also pay rent, and what’s left they spend on food, entertainment and, in many cases, cars, trucks, appliances—and beer.

“It’s been a huge hit to retail,” says John Saputo, owner and president of the Sarasota-based Anheuser-Busch distributorship.

The mainstream retailers hardest hit by remigration are chain convenience stores and gas stations near Hispanic neighborhoods, according to Saputo. And slowing retail sales eventually hit suppliers as well. For the first time in the 11 years Saputo has owned Gold Coast Eagle Distributing he is seeing soft sales.

Saputo’s distributorship has been able to compensate falling Hispanic sales with rising tourist sales this winter, thanks to a strong season. But he believes the full effect of the exodus will be felt once the tourist season is over, with a 1 percent to 2 percent sales decline.

“This summer, we’re going to miss the immigrants,” he says.

Saputo, who has access to sophisticated check cashing data from convenience stores in Sarasota and Manatee, mainly blames the disappearance of Mexican immigrants. “These are young people, the 21- to 40-year olds, that we’re missing. They’re the best consumers we’re losing.”

“We did a study of 16 convenience stores,” Saputo says. “We opened, for instance, a file under ‘A,’ such as ‘Alvarado,’ and we realized Mr. Alvarado hadn’t had any check cashing activity in the last months. When we asked, [the convenience store owner] told us the gentleman was a painter, but the paint company had laid him off. He has no support system, so he just got in his car with his family and drove to another state with jobs.”

“I’ve been through recessions before, in Michigan and New York,” he adds. “The difference between this recession and other recessions is that in most recessions, the people stay put and collect their workman’s comp. They don’t move. But in this recession in Florida, people are getting into their cars, packing up their families and leaving Florida altogether.”

Since an estimated one-third of immigrants are undocumented, the fallout from that exodus doesn’t trigger headlines. But if the Hispanic exodus continues at the pace experienced at Father Celestino’s church, sales tax collections—upon which the state budget depends to a large degree—and school populations will shrink, which in turn will likely diminish resources for schools.

In fact schools are in for a double whammy. In the 2005-06 school year, Florida school districts received nearly half their budgets from property taxes. While only a few Hispanic immigrants are homeowners and pay property taxes, they are indirect contributors as tenants, says Anthony Olson, a Sarasota immigration lawyer. If landlords can’t charge rent, they may default on property taxes.

“I know some have broken immigration laws,” Saputo says. “But they’re working hard, and sending parents to another country without a notice to their children—that’s not the America I know.”

“The big corporations don’t have a heart,” says Father Gutiérrez, the St. Jude priest. “Society, on an institutional level, has lost sensitivity; it has lost the welcoming atmosphere so exemplified by this country. Instead of looking for humanitarian solutions, they want to enforce the law. The emigrants will always go to where there’s work. But there is resentment, and it’s growing.”

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