Senate Select Committee on Select Committee on Minority Economic Development

Good afternoon. Thank you everyone for joining us here today. Today we are going to have a full agenda and we're asking all other Members who are in the building to come and join us in room 2100. We know that there's other committees happening and a lot of movement, so hopefully you can all join us today.

I'm State Senator Susan Rubio, chair of the Senate Select Committee on Minority Economic Development. I would like to welcome everyone here, invited guests testifying today in the audience, as well as thanking our colleagues for being part of this Committee. We have with us, I'm sorry, Senator Susette Valladarez and she'll be part of the discussion as well.

The impetus of the work that we created in this Committee started about a year ago. This was discussions with a lot of business groups, just talking about some of the important issues that we needed to tackle as a state, state, as communities and business leaders.

Long before our recent national politics and discourse, a number of stakeholders came together to discuss issues that were important. And again, we needed to tackle in a more precise way.

We wanted to first of all, provide an open space, a positive space so that everyone could share their thoughts, their concerns, and then we can move from there in a way that creates synergy in terms of tackling those important issues.

And more importantly, we wanted to create opportunity and access for all businesses and all those wanting to get into to the business. And how do we bring you to the forefront and expose you to opportunities that otherwise you may not have.

We have a lot of wonderful partners in this endeavor that I would like to take a moment to thank. These are thought leaders who have served a steering Committee to this Select Committee and have been doing the work for much longer than I have and are critically important to the discussion today.

If I may take a moment to thank Dr. David Hayes Bautista at UCLA.

Julian Canete, California Hispanic Chamber of Commerce Jose Attilo Hernandez from ID8 Elizabeth Martinez, Morello Enterprises Inc. Orson Aguilar, Latino Prosperity Raul Anaya, Bank of America Genev Villecres TikTok Jennifer Garcia Stanford Latino Entrepreneurship Initiative so we have a lot of talent here today, a lot of wealth of knowledge, a lot of background that I think is going to be critical for us to move forward and come up with a lot of innovative ways of tackling the issues that are going to be before us.

And my observation as why I decided to take on this challenge is that around the year 2000, California ceased to be a community that is very homogeneous. It has grown tremendously and we have now become a majority minority state, which means that we are no longer one ethnic group. Majority. It is very diverse.

We've noticed that as California changes in terms of demographics, in terms of the growth, the, the growth in numbers has grown, but yet is not reflected in the growth and economic opportunities for most groups. Most groups are still struggling to be at the table and be at the forefront of the opportunities.

And that is what we plan to tackle today. And once again, I want to thank all of you for being here. I'm going to turn it over to Assemblymember Valladares. I'm sorry, she used to be an Assembly woman, so I have to correct myself, Senator Valladares, to say a few words before we proceed.

Seat thank you, Madam Chair, and thank you for championing this Committee and this conversation.

You know, Latino opportunity has always been a top priority for me, from my past work engaging Latino voters to my ongoing advocacy for the special needs community, for early learning, and even as a business owner, Latina business owner that provided childcare to Latino families and families across Southern California. This isn't just policy for me, this is personal.

So I'm really looking forward to this conversation. And for years I've really said that the California dream starts with a good education and a good job. And these are truly, I believe, the building blocks for what comes next. Whether it's starting a business, owning a home or raising a family with both dignity and stability.

This has been my passion and bringing this work to the Legislature as well. So excited to be here with you. I'm looking forward to our conversation.

I'm eager to dive into this data, you know, where I want to know where we're falling short, where we're making progress, and let's talk about what real steps and smart policies we need to move forward to expand opportunity for everyone.

So again, just want to thank the chair for leading this conversation and looking forward to the panelists today.

Thank you for that. So, again, the way I see it, today we have a real economic and moral imperative to figure this out.

We are grappling with some of the disparities in our state, and it's important that we should we put a spotlight on these issues and collectively, again, all those that are in the room and all of us as legislators that we come up with strategic ways of tackling these issues.

And so today I'm really honored by the information we're going to receive. I have been in some of the other hearings and opportunities that I've been provided to hear some of the data, and it's really fascinating Most of you know that I am an educator, I'm a teacher.

And I was just sharing with my colleague how it almost. I'm a self proclaimed nerd. I love data, I love statistics. And I think once we have the information at our fingertips, then we see why things are necessary. And so as well, providing opportunities to our small businesses has been also a centerpiece of my years in office.

Going back to being a council member in the City of Owland Park, a small immigrant community, to now being a state Senator. It's always part of my conversation. And if you did not see the Committee hearing that we just had on the Olympics, again, I brought that up.

I want to make sure that everyone has the opportunity in terms of what's coming our way. And the Olympics, it's going to be massive. And this is why this Committee matters.

We want to make sure that all of you are at the forefront of trying to procure some of these important contracts and navigating the complex world that is at the Olympics because it's so massive. But today we are going to move forward with some of the people that are going to be sharing some words with us today.

And I understand that we have a couple of folks, I'm sorry, Dr. David Hayes, who will be joining us via Zoom. But we have our first panel that will focus on maximizing economic development and capitalizing on community growth.

I would like to invite Matthew to join us from the Latino GDP, UCLA, who has partnered with Dr. David Hayes. So we'll have him join us in the front here. Please join us. And then we know that we have David on Zoom. So we're going to start today with Matthew First.

Then we're going to allow Dr. David Hayes to join us after. Thank you. And so I also know that we're going to engage Orson Aguilar. So if you don't mind joining us as well. Is he in the room as he comes up? Once again, the first panel will be maximizing economic development and capitalizing on community growth.

Dr. David Hayes Bautista, Matthew Finop and Orson Aguilar. We will begin with you, Matthew, and you may commence whenever you're ready. Thank you.

Good morning. Thank you so much for having me here today. I sort of wanted to set the table because I've been involved in a really ambitious research initiative that was started by Dr. David Hayes Bautista more than a decade ago. And I think it really highlights just how dramatic the economic contribution of California's Latinos are.

Latino population is and why this is such an important area for investment for the future of California. I have a couple of slides that I'd like to share. Wonderful. All right, so the research initiative that I've been involved in is the Latino GDP Project.

And at this point, this is now about nine years of research, more than 30 full length reports documenting the large and rapidly growing economic contribution of Latinos across every corner of the United States.

Now, this was sort of David's brainchild in that he recognized very early that GDP was a really, really important summary statistic understood by policymakers, by leaders in business and other realms, and that it was an excellent way to really capture the extraordinary contribution of US Latinos.

Now, more importantly and relevant to this conversation is that we care about GDP and GDP growth in particular. Not just because it's an important summary statistic, but more importantly because increasing GDP or economic growth results in things that we care about tremendously. Increasing GDP results in rising wages, higher standards of living, and greater social mobility for all.

And for that reason, sort of one of the things that motivates us in this research is to try and highlight and shed and bring understanding regarding the drivers of GDP growth.

Because when we understand those drivers, there's an opportunity to invest in those drivers which will produce even greater GDP growth, even more rapidly rising wages, more rapidly rising standards of living, greater social mobility for all. So what does this research highlight? Well, we started years ago doing the US Latino GDP report.

And across the now eight different vintages of that report, what we see is unmistakable. And that is that Latinos enjoy substantial economic growth premiums relative to non-Latinos across a wide range of indicators. So just to give you a sense, this is just for the US and then we'll jump into California.

In the United States, the Latino component of the US labor force is growing nearly eight times faster than the non-Latin Latino labor force educational attainment. The number of Latinos who earn a bachelor's degree or higher education is growing more than three times more rapidly for Latinos than non-Latinos.

And that's to say Latinos are rapidly accumulating human capital. And Latino labor force participation across the United States is about is nearly 7 percentage points higher than their non-Latino counterpart. And all of this is translating into rapid Latino GDP growth and with it, rapid US GDP growth. Now, in California, many of these premiums are even larger.

In fact, in California, the Latino labor force is growing 15 times faster than the non-Latino labor force educational attainment growth. The number of Latinos earning a bachelor's degree or higher is growing 3.4 times faster. So these are even larger so we see this every single day in California.

And that's to say that Latino economic participation is more active, more intense. It's driving economic growth that produces rising wages and higher standards of living for all Californians. And it means that the vitality of the broader California economy depends on Latinos in the United States. So we recently released the California Latino GDP.

Now, the 2023 is the most recent year for which we have data. In that year, the direct economic contribution of Latinos living In California passed $1 trillion for the first time. And over the entire period that we study, the Latino GDP in California is growing more than twice as fast as the non-Latino GDP in California.

Now, the biggest component of GDP is consumption. It's about a little more than 70% of GDP in the United States. And Latino consumption is now over $700 billion in California. To give a little broader sense about what this means, what is $1 trillion?

Well, if California Latinos, so Latinos living in the State of California were an independent US state, their GDP would be the sixth largest in the nation. That's to say the California Latino GDP is larger than the entire economy of the State of Pennsylvania, larger than the entire economy of the State of Ohio.

And amazingly, we see that California is now the fourth largest economy in the world. And that sort of climbing the scale of global economic ranking really flows directly from the strength and dynamism of the Latino economy in California.

In fact, in 2023, if it weren't for Latinos, California's economy would not be then the fifth largest, it would be the eighth largest. And in 2024, when California rose to fourth largest GDP, California would still be the eighth largest GDP in the world.

That's to say we see this impact every day and these dramatic contributions of Latinos providing drivers of economic growth and a source of resilience for the California economy is producing benefits for all Californians. And with that, I'm going to invite David now to share some remarks.

Thank you. If we can get the next slide, Matthew. Now, as California began to pull out of COVID we started to see California regrouping itself. While we had lost population during COVID for the past two years, California has actually gained population. A lot of that, by the way, due to births.

Second, if we go to the next slide, California rose to have the number four GDP in the world. But that's thanks to Latinos driving up to number four. Again, without the Latino portion, California would only be number eight, about the size of Italy. Next. And while we've much maligned the higher education system.

Money just recently magazine listed of the top 20 public college University campuses in the United States, 18 of them were within the UC and CSU system. So California was just beginning to really position itself for really fantastic economic growth throughout the rest of the 2000s.

But next, suddenly the policy parameters began to shift with tariffs, with immigration raids, things that were not helpful for economic growth. Next. For example, we want the labor force part, the labor force to grow, not to shrink. We want the labor force to actually unleash its full potential, not to have its potential frozen.

Next, we want to see that businesses remain strong, that the economies at the city, county, and state level grow strong. We have every possibility of that happening here in California, but we are in a current policy crisis. Next.

And I'm going to let Matthew explain a little bit about some news he just received last night from the Dallas Federal Reserve.

Yeah. So just to sort of wrap up our initial introductory comments, you know, just to restate, really, the case that we're trying to highlight is that Latinos are drivers of growth, a tremendous source of resilience, and that economic growth that Latinos drive produces benefits for all Californians.

And that means that we need to make investments in Latinos, and we need to make investments in all Latinos in the United States. It's interesting that about 41% of California's Latino labor force is immigrant. And now the Census Bureau doesn't tell us what share of those immigrants are documented versus undocumented, but 41% are immigrants.

And that means immigrants account for over $400 billion of economic activity in Ventura or in California. And interestingly, the Dallas Fed just released a paper on Tuesday doing a series of scenario forecasts for the United States.

And what's amazing is they actually conclude that the current wave of immigration raids that are happening across the United States are predicted to shrink GDP growth by about 50% over the next two years. About 50%. So 1 percentage point relative to the baseline forecast.

And again, so that's to say that in California, we need to understand the drivers of growth, invest, make the investments in the realms of education, health care, homeownership, entrepreneurship, to continue investing in the driver, California's sort of economic growth engine.

We just want to add, just as a final point, that we really believe the Latino GDP Project is a really important framework for analyzing these impacts. And stay tuned.

The project that we're working on, raising funds, funding for now is an economic development dashboard that actually allows us not just to do annual reports, but to really highlight data that's arriving on much higher frequencies, some of it quarterly, some of it monthly, so that we can do the same kind of scenario forecasting that the Dallas Fed did for the United States right here in California, and also analyze, do some policy analysis looking at what are the returns on investment to various policies related to education, healthcare care, homeownership and the like.

And so thank you very much. We're grateful for this opportunity to be here today.

Thank you.

Thank you very much. I'm going to go over now to our next guest and after you're done, we'll see if there's questions for both of you. So I will let Mr. Aguilar continue with the presentation.

Sounds great. Good afternoon, Senator Rubio, Chair Rubio and Senator Valladares for allowing me to the opportunity to speak today, but also for doing this and for fighting for Latino economic opportunity. It definitely means a lot to many of us out there that are out there in the field doing what we can to advocate for our communities.

Also, my parents send their regards and reminded me to tell you that they voted for you because they live in Baldwin Park. So they're very proud of you and thank you for that. Again, my name is Orson Aguilar.

I'm the President and CEO of Latino Prosperity, a national organization dedicated to closing the Latino wealth gap through national, state and local advocacy. Our core strategy focuses on relentless advocacy for policies that empower Latinos to build and sustain wealth.

We bring together leaders from diverse sectors, conduct research to inform our policy, and most importantly, advocate for their adoption and implementation. Our efforts are rooted in the lived experiences of Latino community members and enriched by insight from academics, community organizations, government and business leaders. So we really believe in working across the aisle with the business community.

We're a nonpartisan, non-ideological organization. We just want to do what's right and what the data tells us to do for Latino wealth building. Our work in California focuses on the 16 million Latinos, approximately 40% of the state's population, as you know, whose economic future is closely linked to California's overall prosperity.

Today I present findings from an upcoming report from Latino Prosperity entitled Building a Blueprint to Close California's Latino Wealth Gap. The most comprehensive analysis to date of Latino wealth trends in the state, co authored by Dr. Marlen Orozco and made possible by funding from PNC Bank and Daily Pay. The scale of California's Latino wealth gap is unprecedented.

Latino households hold just 11% of the wealth of white households, a devastating 9 to 1 gap that is more than twice the national average. So think about that the wealth gap in California is twice as worse as it is in the country as a whole.

This makes California home to one of the widest racial wealth gaps for Latinos anywhere in the country. Which is remarkable when you think of everything that we do in the state. While income differences contribute, Latino households earn a median of 99,000 compared to 136,000 for white households. The true divide emerges in net worth, not wages.

Wealth represents accumulated assets that build security and are transferred across generations. It's in this critical measure where Latinos families face the greatest barriers. First, as we all know, homeownership remains a primary wealth building vehicle for Americans and also for Latinos. Yet only 40%, 46% of Latinos own their home, compared to 66% of white household.

And when Latinos do purchase, they face triple jeopardy. We buy at peak market prices, we have limited down payment and experienced slower equity growth. Also, growing crisis looms. Latino homeowners are disproportionately concentrated in wildfire from flood prone regions like the Central Valley and the Inland Empire, threatening their primary source of wealth accumulation.

And as you know well, the growing insurance and energy costs, not just home insurance, not just home energy, but rising gasoline prices really makes a big dent on Latino wealth and Latino wealth creation. Second, Latino owned businesses in California grew by 38% in just five years. Yet they remain systematically under capitalized and underbanked. Here's the opportunity cost.

If Latino owned businesses generated the same average revenue as white owned businesses, it would inject an additional $260 $68 billion into California's economy. That's the scale of prosperity we're leaving on the table due to persistent lending discrimination and limited access to capital. Third, only 38% of Latino households have retirement savings accounts, compared to 60% of white households.

Latinos are underrepresented in jobs that offer equity and or retirement plans. Yet when Latinos do have access to retirement plans, their participation rate exceeds 95%. The lesson is clear. The barrier is not interest, it's access. Fourth, with the Latino community disparities within the Latino community disparities are Stark.

Latinas earn just 52 cents for every dollar earned by white men. Immigrant and undocumented families face heightened financial exclusion. And Latinos in the Inland Empire and Central Valley may have slightly higher homeownership rates, but confront lower wages and fewer quality job opportunities. These internal gaps necessitate targeted solutions. Not one size fits all approaches.

We cannot ignore the current climate of fear in our communities today. Driven by the increased immigration enforcement and raids this fear is already forcing Latino families, including those with legal status, to retreat from using financial institutions, avoid opening bank accounts, and withdraw from economic participation.

When families live in constant fear of deportation, they cannot engage in the long term financial planning essential for wealth building. Parents are pulling children from school programs, families are avoiding interactions with government agencies that provide provider services, and entrepreneurs are hesitant to formalize their businesses. Latinos are the backbone of California's economy.

We compromise 40% of the population, drive growth in labor, entrepreneurship and consumer spending. Yet the systems that enable wealth building are not working for us. California cannot thrive unless all residents, including 16 million Latinos, have a fair shot at building and passing on well.

Our upcoming report will include policy recommendations to expand access to homeownership, improve financial inclusion by strengthening banking access and digital financial services, increase capital to Latino owned businesses through targeted lending programs, and promote workforce mobility with wage equity initiatives and expanded retirement benefits.

Closing the Latino wealth gap will require bold equity standard decisions, much like the Governor's recent CEQA reforms that will accelerate housing and infrastructure development. Just as those changes recognize that outdated systems hinder progress, addressing the racial wealth divide requires similarly ambitious action. The time for incremental change is passed.

Whether it's removing barriers to home ownership, unlocking capital for Latino owned businesses, or expanding access to retirement savings, we need policy solutions to match the scale of this challenge.

We look forward to sharing our results with you and welcome the opportunity to engage further as we release other reports, including a FinTech report looking at how Latinos are impacted by the growing use of fintech, a Home Lending Report to Latinos where we look at the disparities in mortgage trends to Latinos and a National Latina wealth report exploring unique financial barriers faced by Latinas across the country on their path to wealth building.

With that, thank you for the time and opportunity to speak with you today and happy to answer any questions that you have.

Thank you very much. It's a lot of information that I find very fascinating. So I'm going to start over with my colleague here, give her the opportunity. Then I have a couple of questions for you Senator Valladares.

Well, thank you very both very much or all three of you very much for that wealth of information and data. I do have actually quite a few questions. First for Matthew Finep. Did I say that correctly?

Finep. Just looking at some of this Latino GDP data just for some clarity on what really is the source of the growth of the Latino labor force. Is it the growing Latino labor first and GDP, is it Immigrant, is it first generation, second generation? Where are we seeing that growth come from?

Thank you for that. Great question. So actually, in the full length Latino GDP reports, one of the most important analysis that we do is we actually look at age cohorts, four year age cohorts, by first generation, second generation, third generation.

And what that actually reveals is that first of all, under the age of about 25, you know, California's Latino population is overwhelmingly US born. And so, and what's interesting, and that is to say There are about one in the United States, about 1 million Latinos coming of age and entering the labor force every single year.

And the overwhelming majority, again, are US born. And so getting back to the question about what's sort of the driver of this, this is this massive intergenerational human capital accumulation that has happened. You have young Latinos growing up, seeing the selfless work ethic of their parents and yet having much higher levels of educational attainment.

I'm really seeing explosive growth and productivity driving Latino GDP. And I'm going to ask David. This is something David has done a lot of writing on. David, do you have anything to add?

Yes. Basically, the world's fifth largest GDP, which is a Latino, was built by a labor force that was at its time predominantly nearly 40% immigrant. Now immigrants are aging out of the labor force. They're being replaced by the children.

And the basic equation is that for every Latino that ages out of the labor force, two of their children are aging in, thus we're getting labor force growth because of these young US born Latinos entering the labor force.

They have 50 years of productivity and they will in fact be comprising the California labor force of the year 2090. The investments we're making in them now, in their health and their education, will carry the state for the rest of the 21st century.

So then, I mean, that kind of goes to some of my follow up. Well, I'll just ask these follow up questions. Is, is the growth, Is it? Because I only see the data from 2023, is the growth in California, is it declining? Is it, is it stable? Is it growing?

And kind of my question here is, are we going to be losing this labor force to other states because it's so expensive to live in California?

That's a really interesting question. So actually again, the most recent year for which we have the GDP data is 2023. And we actually study from 2010 to 2023. And over that period, the growth of the Latino GDP has been fairly stable, with one exception.

There was a dramatic surge in growth relative to non-Latinos during the COVID 19 pandemic.

And so that's to say, even though we understand that Latinos were much more likely to get sick with the disease, much more likely to die from COVID they literally held up the economy and actually enjoyed more rapid growth relative to non-Latinos in California during the years of the pandemic.

So that's one really important footnote about the contribution of Latinos. I do think it's important. We've been actually looking at some county level data and we actually noticed that in 2024, the Latino population of some of the higher housing cost counties have started to decline.

You know, for example, in Southern California, while the Latino population of the Inland Empire continues to grow, the Latino population of LA County actually declines declined in 2024. So there is a nexus here with the housing affordability issue. And this is, as my colleague to restate what he said is this is really important.

This is important for wealth building, but it's also just important to maintaining California's economic growth engine is addressing the housing affordability issue.

Thank you. And so, I mean, again, my concerns are that we have a phenomenal workforce and that it is so expensive to live here. So how do, how can we be more competitive in keeping this workforce here? And that kind of leads into, I know, you know, one, it's housing.

And two, as I mentioned in my opening remarks, it's, you know, a good education, a good job. Right. You need those two things. And there wasn't a lot of discussion in the. And Mr. I think Hayes's or Batista's. No, Mr. Aguilar's presentation about that connection. Right.

So if you can't read, if you can't write, are you ready for the workforce? Probably not. And we, I am very worried about education, but would love to kind of dive into a little bit more. What is the biggest barrier? Obviously, it's supply. We know we're 3 million units short housing in the State of California.

Outside of the supply issue, why do Latinos have such a difficult time moving into homeownership? Is it financial literacy? Is it down payment? Like, what are the actual barriers that are post Latinos to becoming homeowners?

Yeah, that's a great question, Senator. One of the things I mentioned is we're working on a mortgage trend report and we'll be able to show you some of that data. And what's remarkable is that some institutions, some banks, are doing incredibly much better in terms of making loans to Latinos than others are.

And so the question is if a certain institution, and I don't want to name names yet, but certain institution is doing so well and others are far behind, clearly it's because they care and they're trying. Right? So I think that's the first important piece is who really wants to serve the Latino market.

And if you truly want to serve it, you figure out solutions to it. And so that's part of our research follow up is we're going to reach out to those institutions, the ones that are doing good, the ones that are not doing so good, to say, like, hey, why do you have this disparity?

Why is it that Jp just to kind of share a little bit of the data, why is it that JPMorgan Chase, a bank from New York, is doing better in lending to Latinos than Bank of America? And Wells Fargo, who continues to fall behind, actually is headquartered in San Francisco, but just showing a downward trend.

So Latinos go up. Wells Fargo mortgages to Latinos have been dropping. Right. So the point of that that I raised is there are solutions. Right. Supply is important.

I just spent half a day in the City of Austin with council member Chito Vela who showed me the amazing work that they've been doing to just make it easier to build housing. California still has sequel. Reforms are great, but there's just way too much red tape still that we have to look at.

A lot of barriers to look at, including for small businesses, a lot of regulatory red tape that makes it hard for them to succeed. But that's a long winded answer to say we're trying to get to that point.

So I'm hoping that there might be information or research really digging into this data, whether. And I come back to kind of the financial literacy component of it. You know, if you don't know how to manage a credit card, right. That impacts your FICO score in order to apply for a mortgage.

Do we have data on, is that happening within our Latino community at a younger age? Right. I was a young, obviously young Latina that messed up my credit really early and I had to work really hard to rebuild that before I could buy my first house.

And I was the first of my siblings to, to buy a house. And now I think the last one, we have one more, one more needs to buy a house and he's working towards that. But the supply is, is, is just so low right now. So I'm hoping that that is what your report might get into.

Some of the more granular I know you have, the very high level it's it's, I would imagine, easier to look at the data to see who's doing better. But it's the why, right? Why are they actually not lending to more Latinos for home ownership?

And then my last question is kind of recent data and really data for the last 10 years has shown that Latinos and specifically Latinas are the fastest growing group of business owners in the State of California. Is that still the same?

Are businesses, Latino businesses finding barriers from growing from a micro sized business into a small size business? What is that sector looking like?

Yeah, I think you captured some of that. So we do see exponential growth amongst Latina businesses, which is quite promising. I don't have the statistic. I can get back to a lot of those Latinas. Businesses, as you know, are single employers, right? No employees.

And so what we're seeing is what would happen if those Latina businesses started to employ more people? What would that do for the State of California and how do we make sure that these businesses are there for growth?

A lot of what we're finding in our research is a lot of Latinas are becoming entrepreneurs because that's the only opportunity that they have. Right. It's hard to get into corporate America. Even with higher education degrees. We see a big unemployment rate for recent college graduates, especially Latinos and Latinas.

And so you go into entrepreneurship one because it's a passion, but also because of necessity. And oftentimes you're going into a business that's really hard to scale and really hard to grow. So we need to bring up a lot of that detail and nuance. But the positive is a lot of business growth amongst Latinas.

The question is what types of businesses and are those the type of businesses that will scale and be the next employers for California?

Thank you, thank you both so much for your wonderful conversation and data.

Thank you for the question.

Well, I have a couple of questions along the same lines because I was listening to the conversation about the lack of home ownership. And my thought process is, you know, since we're here, I wanted to make sure that you're thinking in terms of what policy recommendations can you provide that we as a Legislature can implement.

And I know it's difficult. You only have two people up here and there's a whole body that we have to speak with. But I had similar concerns in that we know that there's a lack of ownership and I know that you mentioned that there's a lack of access to capital.

But I was thinking along the lines, are we not doing our job as Communities as leaders to put out education information, not necessarily going to college, that type of education, but as community leaders, mayors, council members. Are we not doing enough to educate our community on the process of homeownership and work?

What can we do to close that gap?

Yeah, I think it's take the whole ecosystem. We need everything, right? When I think I grew up in Boyle Heights, when my parents finally purchased their first home in Baldwin park, they were able to purchase because it was a townhouse. Right. It was more affordable.

We know we have a building crisis, but in particular, not that many developers are building condos anymore. Right. Construction defect, you know the issues well. So we need to figure out how to tackle those barriers to build entry level homes like we used to, not just big homes. So that's 12. There are.

We have anecdotal evidence about programs, right? Whether it's Cal FHA or other programs that don't penetrate the Latino community as well as they do other communities. And a lot of that is just organizing, right. Whether it's our nonprofits on the ground. I'm on the board of the East LA Community Corporation.

We do a lot of work to do home buyer assistance. The problem is there's not that much home. Not that many people are buying homes in Boyle Heights versus they are in the Inland Empire or in Covina or West Covina or in Monte. So I think we have to organize better around getting our communities those resources.

I would ask Cal FHA and I haven't seen the data in terms of the state down payment programs, what percentage of those programs go to Latino families? I would guess that we are probably under indexing in that. And a lot of that has to do with outreach and perhaps other systemic programs that we can look at.

Thank you. I want to go Back now to Mr. Finep and Dr. David Hayes. There is information that you shared about, I believe under 25, predominantly US born citizens. But I didn't hear. I want to hear about this bubble. I know that we have a group of DACA students, Dreamers.

Do we have data information on that group of individuals? Because I know that some of them are professionals. In fact, I had one working for me, I think, last year here in the Capitol. And where are they going? Is there a path for them? What's happening with that group of individuals?

Well, if I can add in, we don't get a lot of information at a population base about DACA students. I have been one of the proponents on DACA students being admitted into medical schools and into residencies. Lord knows we need them. So we need better information systems.

We are creating more of an undocumented youth program as we're no longer extending DACA the way we used to. We are creating an undocumented program, but highly educated group. And we need to make sure that they can unleash their energies to benefit everyone in the state. That should be a top priority for us.

Thank you. And I know that because my former employee had a master's degree, well read, educated, and yet I'm not sure we've captured that data.

I'd be interested to know if there's another way of capturing that data because I would like to see if there's a path for us to help out, bring them out of the shadows and make sure that we're placing them and using that talent that we have already grown in the states to ensure that they are being productive citizens and contributors in a way that reflects their hard work.

But I have another question for I think it's you, Dr. Bautista. We talked about the Latinos being, if they were, let's say, a state by themselves, the eighth largest economy in the world. But I'm talking about is there another state that mirrors. They're not going to catch up.

But is there any other state that's close to California in terms of their growth in Latino population and the GDP?

Well, in fact, almost the entire country looks very much like California. There's very little difference whether we're talking about New York, Illinois, Florida, Texas, Colorado, California, we see similar patterns.

Doesn't matter whether the Mexican, Cuban, Puerto Rican, Dominican, Colombia, we see very similar patterns of labor force participation, high economic growth, high rates for labor force participation, strong families. It's a very Latino thing to be.

And that is the very population that will provide the economic edge for the United States economy for the rest of the 21st century. We should be investing like crazy in it, not disinvesting.

And I would add in the various regional reports that we've done, we've seen some really striking ones, like in Illinois, if it weren't for Latinos in the Chicago metro area specifically, we would actually see that the Chicago area population, labor force and number of homeowners would be declining.

So that's to say the non-Latino labor force, the non-Latino population and number of homeowners is declining, but the contribution of Latinos are large enough to push all of those variables positive for the entire metro.

So we've seen dramatic, I remember in the Houston metro area something really close to 70% of GDP growth since 2019 is because of Latinos in Houston. So we see this remarkable pattern, really striking figures. But what's amazing is when we an obvious question is, okay, so where are the most rapidly growing Latino populations in the United States?

And this gets a little bit to the Senator's question about should we worry about losing some of our labor force to other states? If you just think what are the fastest growing Latino populations, Would you guess that it's places like Idaho and Tennessee and North Dakota.

And what's interesting there is the following question is, okay, well why is it those, why are those the fastest growing Latino populations and percentage? Well, those are the fastest growing state economies. Wherever we see economic growth in the United States, we see Latinos driving that growth and again driving growth, producing benefits for all members of those economies.

And that's why this is such an investment opportunity for California, addressing the housing affordability crisis, investing in education and health care. These are investments that will produce benefits for all Californians.

And one last question. I know our Senator Gray. Senator is going to have to leave shortly, but it may not be in your wheelhouse. But you talked about just the workforce and how there's so many entry into the workforce. I think you said 1 million every year. Right.

Is there birth trends that may affect how we grow in the future just based on new generation, new thoughts about having either small or bigger families? Have you seen those trends?

David can speak to that.

Well, yes, actually, across the the entire developed world, birth rates are going down. Now it just so happens that Latinos started with a higher birth rate. Our birth rates too are going down. They're going down in Mexico, Central America, South America.

But because of the nature of whom we get as immigrants here to the U.S. immigrants, particularly from Latin America, tend to start off at a relatively much higher birth rate than everybody else. This too will pass.

Basically, this Latino bump that we're getting in the Labor Force, this million 1 million Latinos that enter every year for the next 20 years are a bonus. That is a bonus that no other advanced country, Uk, Japan, China, don't have, that they all have declining.

We have this one time bonus of these 1 million per year Latinos entering the labor force. We should be investing like crazy. They are our economic advantage for the rest of the 21st century, for the entire country.

Well, thank you for that. And I did visit Japan and that's one of the issues that they're going to have to contend. They don't have enough workforce now and they're begging people to come into this state. I believe it's a generational crisis where everyone's in the elder population.

They're either 708090 and everyone that's young is leaving Japan. So they're really struggling. In fact, they're trying to invest in trying to incentivize people to come into the state. So I was just wondering if that would ever be our issue, but we'll leave it there. Thank you so very much, Dr. Batista.

Thank you for showing up and sharing your information with us as well. Mr. Finop and Mr. Aguilar, your information is really valued and we're going to look forward to continuing to ask you questions, maybe offline, since we don't have a lot of time and we really appreciate your time.

So we will now invite our second panel up to share some of their information. And the second panel is going to discuss the grain business and quality jobs sector.

We're going to invite Julian Canete from the California Hispanic Caucus, Luis Armona from Morello Enterprises, Elizabeth Martinez with Morello Enterprises, to share a little bit of the information that they have on this topic.

Thank you very much for joining us today. So we will start with Julian Canete and looking forward to hearing your thoughts on the growing businesses and quality of jobs here in California. So you may proceed when you're ready.

Well, thank you. Senator Rubio and Senator Valladares. Appreciate the opportunity to address you address the Select Committee. As we all know, California is the fourth largest economy in the world and powering that economy are about 1.8 minority owned small businesses representing and that represents about 45% of all small businesses statewide.

You know, and the Governor has credited California's economic success in part to the diversity of California's hard working workforce and small businesses.

Yet we feel that to maintain and grow California's economy, the state must do more to further support the Latino business Committee who represents the largest and significant part of California's minority business community comprising over 52% of all the minority business community.

Despite Latinos being the largest ethnic community in the state, Latino owned businesses just represent 11% of employer businesses of more than 4 million small businesses in the state. So we have always recognized that there is an issue with parity between our Latino businesses and white owned businesses and the growth that they're not growing.

We have a lot of businesses, but we got a lot of catching up to do. Latino businesses contribute over almost 200 billion in economic output and support more than 2 million jobs in the state.

However, we can't help but wonder what could be achieved if we actively champion these businesses, creating an environment that allows them to thrive rather than merely survive. Latino businesses encounter various systematic barriers that stifle their growth.

From difficulties in accessing capital to navigating complex state regulations, obtaining the financial resources and technical assistance and and accessing procurement and contracting opportunities necessary for success. Securing capital has been a challenge for Latino business owners. The challenge is even greater for Latino business owners. I'm sorry.

In the first half of 2023, funding for Latino business owners represent less than 1.5% of all VC investments in the US and only two out of every 10 Latinos who sought a national bank loan exceeded exceeding 100,000 got approved. We must continue to support funding as well.

So we must also continue to support funding for technical assistance programs such as programs coordinated through Cal OSB such as the Capital Infusion Program, the state's technical assistance program, short for tap. These programs fund lending programs that have helped us increase lending and loans to Latino owned businesses.

Technical assistance programs such as SBDCs and other local programs that help businesses survive and achieve business success. In today's time we need to look carefully at the dollars in these programs, though. I want to put this in there because of what's going on nationally.

I think we really have to look at the State Dollars that we spend to supplement federal programs. Because now what's happening is once those dollars are in the federal. Into that program, they now, we are not dictated by the federal rules. And we just recently got orders that we cannot service undocumented businesses owners who.

This is experience because these undocumented business owners that we've helped pay their taxes, legally licensed and are creating jobs, and now we cannot service them, at least with those federal dollars. So I think, again, that's something we need to look at closely is how are we investing those programs when we supplement a federal program?

And then also our small businesses need more assistance in navigating California's complex regulatory environment. This presents another challenge. While regulations are designed to protect workers, promote fairness, they must also impose. They also oftentimes impose significant burdens on small businesses.

Just before this hearing, I was at CARB and the Executive officer took a meeting with us to discuss just that. Right? How can we support the goals of CARB, but how can we get there with the least amount of impact on our small business owners here in California and especially our Latino business owners?

And then let's talk about procurement. This is a big area because we truly believe that procurement is an answer to achieving both more jobs, a stronger economy here in California.

We must continue to ensure that that Latino businesses get their fair share of contracts at the state local levels and with private industries that benefit from California's large Latino population. The Legislature two years ago passed AB 2019 at the state level, as you both know, which established a 25% procurement goal for all state agencies.

The issue here is that the goal refers to all small business, not just Latino or not just people, diverse businesses. But we need to make sure that Latino businesses get their fair share of the opportunities with the state agencies. And the state agencies aggressively reach out to our Latino businesses and our diverse business owners of these opportunities.

And also I think here with the state, the programs that we do with tap, et cetera, again, developing competitive businesses so they can win these contracts. We must continue to collaborate with the utility industry and ensure that the intent of G0156 established by the Legislature is truly met.

You have to remember, Latinos represent over 40% of the utilities ratepayers, and Latinos need to get their fair share. If our communities are investing 40%. We. Shouldn't just be getting, you know, 16% of diverse spend. We ought to be getting 16% of the total procurement dollars that are out there.

So again, an area where we think there still needs to be continued collaboration. We've done good, we've done well, we can do better, we believe.

But we still think that the state Legislature needs to have their eye on it and, and making sure that the utilities are working to meet these goals with our business organizations, but as well with our business owners. The Legislature recently passed AB 1392, which was the state chambers bill on hospital procurement and supplier diversity.

This is a huge potential for growth for Latino businesses, especially at the regional level. As we all know, health care is really regionalized. And we feel that increasing the procurement opportunities will assist our regional communities to continue to grow and those Latino businesses to grow and create jobs.

This is an important area because currently with all the major hospitals in the aggregate, they spend almost 8 billion in procurement and contracting, but yet they only do 2% with diverse businesses. And in our mind that's not very good, right? When you know, the total minority spend with GL156 is what, about 48% now.

So we're working with the hospitals and the state agencies to make sure that these reports are given. But again, I think it's something that this Committee needs to look at as well and see if they're achieving their goals that we've set for them.

And then finally, in regards to local government, we think that local government should also meet a 25% goal. That is why the state Hispanic Chamber, the State Asian Chamber and the California African American Chamber have collaborated and introduced SB 781 by Senator Reyes.

And this would establish within local communities, local municipalities, the Small Business Utilization program and encourage 25% procurement goals at the local level with diverse businesses. And then also I think another area that we need to look at in regards to procurement is in regards to the state's media and advertising buys.

As you know, the state spends billions on advertising, on informing and educating our citizens throughout the state. But yet we do not know if this dollars are being spent properly, if in our diverse communities and further with our Latino owned media. Oftentimes it's spent with a media organization but is not Latino owned.

So again, that has been a concern of the state chambers for years.

And then finally, to truly support Latino business owners, we feel that the policymakers must introduce legislation that increases investment in targeted programs, as I said, provides resources for accessing capital, enhances financial literacy and technical assistance, and increases the use of Latino businesses and contract opportunities with government and private sectors of California.

Without these efforts, the economic potential of Latino businesses will remain untapped, and more importantly, California's broader economy will suffer. Thank you for your time.

Thank you so much. We're going to go over to Elizabeth. You're going to have to leave. Do you have time to. Okay, so we're going to go over to Elizabeth Martinez, and then we'll turn it over to Suzette Valladares for questions. So you may proceed when you're ready. Okay.

Well, good afternoon and thank you. Senator Susan Rubio and Senator Suzette Martinez Valladares. I am just so proud of you, too, because you guys are taking this serious. You know, this is something that I know we see you quite a bit here in Sacramento. My name is Elizabeth Martinez.

I'm the Vice President of government relations for Meruelo Enterprises. I'm sure you guys know our story, but I am here, very proud to represent one of the largest Latino enterprises companies, not only in Southern California, but also in California. And probably, I mean, I'm going to go as far as, you know, the nation.

I mean, if you really talk about the diverse companies that we represent, it's. And here outside of me, I do have one of the principal owners, Mr. Luis Armona, who's going to go into detail in regards to some of these challenges that I think many of us, as you know, Latino business owners are facing today.

But I do want to go a little bit further in regards to all our companies. We are, you know, we range from the construction, the banking, the real estate, the hospitality and the media.

And so what's unique about us is that every single enterprise that consists of these businesses go through the same challenges, as Julian was saying, you know, in the media, you know, the procurement opportunities. This is why we're here today, because we take this very serious.

And Louis is going to share a little bit of those challenges into detail. But what I see is that there's a lot of talk out there, let's be honest, you know, with legislators, and I know they all do an amazing job.

But when they really want to get the minorities and the Latinos active in economic growth, it's about putting actions in place. And one of them is today, you know, so I am just so proud to be here.

We are here fully invested, to continue to help other small businesses because let's be honest, as their success is growing, I mean, you know, we're blessed that, you know, I mean, Mr. Armona and Mr. Meruelo, they employ over 22,500 good paying jobs, most of them being union in California, that means something.

And when you have the principal owner come here every month, investing his own time, that means something.

So I want to take the opportunity to thank you and we'll have more discussions, but I know that you guys are limited on time, but I do want you to hear some of the challenges that we go through every single day. And here next to me is Mr. Liz Armona.

Thank you.

So I'll turn it over to Mr. Armona. Thank you for being here. And you may proceed when you're ready.

Hello, everyone. I'm Luis Armona, part of the Meruelo Group. And I wanted to thank Susan and Suzette for this. This is. You know, we talk about this all the time when I come down here every month. And why does this matter? Right? It's so first, me and Alex, we're very lucky.

My aunt Alex's mom, we've been so lucky. We live in the greatest state. You know, in the union, we are the fourth largest economy in the world. We subsidize 98% of all the states in this country. I mean, we've been so lucky. You know, we started a long time ago.

We were blessed that we didn't have the regulations that they have now. I mean, the regulations for small businesses, I don't know how they can start. It's just so much. It's so intense. You have to have such immense capital to start businesses because all the regulations in the State of California imposes. That's one part.

The other part is, you know, the litigation. The litigation is just completely out of control in this state. I mean, I'd love for someone to do some kind of research on showing how this state has so much more litigation than any other states. I mean, the lobbyists, you know, the lawyer lobbying here, it's just incredible.

And that's probably. I would say that's the hardest part for small businesses. You know, the bigger businesses, you know, you take the good, you know, you have expense, and you add that into all your fees. And at the end, we all know who pays for all these regulations, who pays for all the litigation? It's the consumer.

It all gets pushed when they decide that they need to have certain. Through aqmd, certain vehicles. You can't have this. You can't. That gets pushed. Now, when a truck used to cost 50,000 and now they cost $600,000, Semis, who pays for all that to all the consumers? And how can a small business run in that box?

It's so impossible. And we're here just to talk about that. And I think there should be really different rules for small businesses. That is the core of, you know, this country, the core of Latinos, the core of minorities, the core of everything. Small businesses is what built this country. So we gotta make some changes.

And at least, you know, like we said, you know, the bigger businesses, they can handle all the litigation, they can handle all the HR people you have to put in to manage everything. They can handle all that. But the small businesses need help. I think this Committee is a great start on that.

The other, you know, the other thing is a procurement side. There's so many opportunities for small business on procurement, but it's. How do we tell them that it's out there? Like, you know, we were so lucky. You know, GL156 was a utility company. You know, we complained a little bit. You know, what opportunity have they given us?

Especially the Morello Group, where 40% of their procurement has been spent on MBE money. I mean, that's a big thing. That's a big thing on that. So, you know, the utility companies, PG&E Edison, the gas company, those are the three big ones.

They're doing an amazing job on some other things, but on that part, you know, they're doing right.

Yeah, they're great partners of ours.

Yeah, they are. So I'll end it by we're here to help. We've been doing this. You know, we are in the field. We know what's going on out there. So anything, we can help our team, myself, Elizabeth, the whole team, you know, we're at your disposal. So I wanted to thank you.

Thank you so very much. So I am going to turn it over to my colleague. She has several questions before she leaves, and so I'll just turn it over to her.

Yeah, I have, like, three pages of notes here. So first of all, again, thank you for this wonderful conversation. And before I dive into questions, I've kind of discovered that, you know, through this, the first panel and now the second panel, we could be having additional hearings.

And like, some of the things, the reoccurring things I'm hearing is, you know, we really need to bring together California Realtors, lenders, Cal, FHA. I know that there's a. The National Association of Hispanic Realtors that's really invested in helping Latinos with home ownership.

We could have a whole panel and conversation about the barriers and how we can improve homeownership for Latino families. I've heard about the necessity to prioritize a pipeline for the workforce. And for jobs, I've heard that we need to look at the regulatory environment, right?

So whether that's aqmd, whether that's CARB, whether that's the probably thousands of boards that oversee licenses. Right.

And then obviously procurement feels like, you know, we need to start to dig into, you know, how is procurement at the county level, at the city level, at the state level, working for small business, for micro business and for those businesses.

Because I know that we have a lot of successful Latino business owners like the Meruelo Group, who you may have started off as a small business, but you're no longer a small business. Right. So how do we continue supporting enterprises like Morello and others to go into that next category? Right.

So there's a broad spectrum of Latino businesses that we need to be having conversations about how we get them to the next level. That's a lot of work for us to get to. But I have, you know, I do want to really look at two areas, one with some questions.

One is going to be, again my former comments, you know, a good education and a good job. The good job part, what from your perspective, whether the Chamber or at the Meruelo Group, what should we be prioritizing in terms of training and in terms of the pipeline of the workforce? Is it in healthcare?

Is it skilled and trained? Is it, you know, our University system? What does your do your businesses need and what is the Chamber seeing in terms of that workforce pipeline? Especially given that we're entering this new age in technology with AI, where things are going and already have so rapidly changed.

What are you seeing in terms of what we need to do to work on the pipeline?

Sure. Great question, Senator. I think, you know, first thing I want to say is that, you know, majority of our Hispanic businesses are middle class businesses. Right. Middle class individuals. But the great thing is they create middle class jobs. Right.

Elizabeth just referred to it that their, you know, 2,000 employees and those are all good paying middle class jobs. I think in the construction industry, I just saw some numbers that the average wage for a Latino owned firm that they pay their employees is about $75,000 a year.

And I think that's, you know, a great wage in the construction industry. But I think again, you know, as we're looking at all the different initiatives and changes, you know, earlier, you know, last year there was discussions around hydrogen. Right.

How do we start positioning our Latino businesses to get into that field or who is already in that field and what do we do to create those jobs or transition those jobs. Right.

For even a Company like Meruelo saying, hey, we can get into the hydrogen business and do contracting, but what do we have to do for our workforce and train them? So, you know, we're seeing growth across the board. You mentioned AI.

You know, that's another area that I was at a session on AI that we did, and someone goes, so who's the next $1.0 billion business? I said, well, you know, like you said, they all started small, right?

I said, it might be him right there, you know, but again, they need, when I talk about the technical assistance and access to capital, that's what they need to start developing their business and growing their business and then being able to bring on that workforce they need.

I also think that, you know, we have to do a better job at the, you know, high school level of educating young people of the opportunities that exist out there. Not only as an entrepreneur, but, you know, not necessarily being an influencer. I just saw a thing where everybody on the deal was an influencer, right?

But there are jobs, right? Good paying jobs. I mean, but again, start educating them on those opportunities that exist out there for them.

If I could add to it, Julian, it's obviously partnering up with the right organizations, obviously with the California Hispanic Chamber, our local chambers. But I know your question is actually something that's very. Something that I take very passion to the heart.

So, you know, the story that we share about the Meruelo Group and how they became this, you know, pizza joint, the bridal business. I mean, I love hearing Louis, every time he talks about it, I'm like, I learned something new, right? It's simple math.

But I think the story of us sharing that to our community, especially some of these communities that we serve, I think it's really important. But I know you mentioned, you know, there's so many good opportunities, right? So for us on the construction division, there's many opportunities that are good. Union paint jobs.

And let's be honest, you know, college may not be for everybody. There's a lot of good students from high school that want to come into the workforce to go after trades, to take two year, you know, trade schools, to be linemen, groundmen, you know, superintendents.

There's a number of opportunities out there, but it's really, we need your help, you know, on the legislation to provide these opportunities and Mary career fairs, you know, we could partner with you. You know, we could use social media. We could start educating our kids from high school. Hey, do you guys want to do some internships, mentorships?

And I know many of you guys see me I do. I am part of many panel discussions when I talk to some of these students and I tell them, go get it. You know, go get it. Go and ask questions. How do you want to become? Do you want to go into construction?

I mean, there's women, there's IBEW 47 that has a women group. You know, we all think, zero, these are men jobs. No, there's opportunities for women as well. So just continuing to have you guys be our advocates.

And then obviously with the resources that we have and the commitment from Lewis and the companies, you know, with social media, with the banking, with the construction, we're here to help. We want to continue the economy, the minority economy growth. And I think we're going to continue and we're not going to stop. We're fully committed.

And that's why he is here with me every month to continue that. But if you guys have any opportunities for us to work on, we'll definitely partner with you.

You know, I wanted to add just a little bit on that. I mean, like she says, there's so much opportunity for work out there. It's just like everything. You got to look for it. I mean, education isn't for everybody. My nephew went a couple years to, you know, and he didn't do it.

And I told him, come back to, you know, work with us. No, he didn't want to do that. So I made him a laborer. Right. Became a laborer. He's a foreman. He has a side hustle. He's, you know, he does a little bit of construction and stuff.

And, you know, he's 40 something years old, he has five kids, he's purchased his home, his wife never worked, taking care of the kids. And he's figured it out. Yeah, it's a lot of hard work, but there's so many opportunities out there.

We just got to kind of, I don't know, we have to have mentorship, like you were saying. We have to provide all this information out there. But he's your perfect. He's got his. He purchased his own house, he's got five kids. One just graduated from high school. And he's going to Cal State fully. No, he's.

He's going to Pomona. I'm sorry, he was going to go to Cal State. 410. And, you know, he's figuring it out. And that's what we're going to do, is help these guys figure it out.

And then my very last question, just before I have to catch a flight, because I would be remiss If I didn't ask, you know, when I was elected this past November, the biggest issue, hands down by far for working class families and for businesses is the cost of living and the cost of doing business in the State of California.

So if you could very briefly, because I do not want to miss my flight, if you could very briefly speak to what are the major cost drivers that your businesses are facing right now.

Well, obviously, you know the regulations that we talk, talked about at litigation, but we also have to understand the cost of everything has gone way up the last five years. Everything. I mean, I used to build houses for $100 a square feet. Now you can't build anything for less than $300 a square foot.

The kinds of fees that are, that the cities have to impose upon you are crazy. The time, it's just every, you can't have everybody making 75 or $100,000 and not expect for inflation to go way up. I mean, it's just, I don't think we can, obviously we can't go back on that. We can't.

But I mean it's, it's everything. It's not just one thing. It's just everything is so expensive in California, I mean, even in Florida, I'm also from Florida, even there, you know, crazy. But 10 years ago, a foreman used to make $4.50 an hour.

A foreman.

Those days are completely gone there too. They're not making $100,000 or $150,000 like they're making here, but they're still making 7080, $90,000. In Florida, any house is costing, it's still half $1.0 million. Everything across the board is up. I wish I could give you the.

Answer, but I mean, insurance cost insurance.

I mean, yeah, I also think, I also think the business plans for all these big companies are charge more, charge more, charge more because they're only going to make a percentage of the expense. So now are we going to make more money?

You know, is the insurance company, are they going to make more money on $1.0 billion or are they going to make more money on $1.0 trillion of expenses? They're going to make more money on $1.0 billion. 5%, same thing. There's a lot of state agencies the same way.

I think what's one thing that's driving the cost and it affects everything for our business owners and feel consumers is energy, period. Right. And we're talking about electricity, we're talking about gas, oil, et cetera.

Because as those prices rise, the cost of transport, something those vegetables just went up the price of those vegetables, you know, with, with the minerals, you know, when your truck's got to be on the street, the price goes up.

So, you know, if you just say one thing I would, the chamber would say energy has been having a big effect on everything across the board, not just driving our cars. So, you know, sounds good.

Well, thank you. And we've answered all your questions. I know she's going to have to.

Let's not forget taxes. Let's not forget taxes.

So, you know, this has been a really robust conversation. So I just want to thank Senator CeCe Valladares. I know Thursdays everyone rushes out and she hang out here to make sure that we have this discussion. Thank you. But we wanted to hear the top line items that can help businesses grow.

And, and I will mirror some of her comments as she exits today. That we want to make sure that we are really looking at policy that that will help the conversation along. And regulatory regulations are stifling the growth for small businesses. That's one of the top items I heard.

As well as making sure that we hold some of our agencies accountable. I believe you mentioned AB 2918 that was supposed to have a 25% procurement goal for minority owned businesses. And we're not quite there. We also heard AB 1392, another Bill intended to improve the supply chain with diversity. And that's not happening.

But you also mentioned the state technical assistance loan programs that are, they need a little bit of help in terms of funding. From what I heard your conversation is that you're basically, it's from the state coming down from the Federal Government, but now you're having all these regulations that are coming down from the Federal Government.

So we need to create our own sort of pool of money that we don't have to have the same, I guess, requirements. Can you talk about the state technical assistance loan program? So we know it's there, but where are the deficiencies?

Yeah, I'm not a real, real expert, but I know a little bit about it and I think that, you know, Director Tara Gray's done a wonderful job in trying to distribute dollars out to these programs to help small businesses and the economy of California.

I think one of the problems is, you know, I believe when we initially did the Bill, it was all about making sure that there was the full match for the SBDC program because for so long the state had not been investing in the SBDC program. So we said, hey, let's invest.

Let's get the full dollars from the feds for the program. And so that's now where those dollars become federalized. Now we have five SBDC regions in the state, throughout the state. And you're familiar with many of the programs, but I think our investment now in that program, one of the problems is those dollars are federalized.

So now they're setting down directives saying, you won't service this. I'm only waiting until they say you can't service. Spanish speaking Right. In Spanish. Programs in Spanish. So that is a concern of ours. Our thought has always been is that. And I said this way back when they first did the Fund, because initially they were doing enhancement.

They called it technical assistance enhancement program. They call it tape. And they were putting up money to enhance federal dollars, like the SBDC program, but also MBDA programs that were out there. And we always felt that California had a lot of bright people, a lot of bright CBO's that were doing business programming that should be invested in.

And Director Gray did go that route eventually and is investing in more, but we still feel that there needs to be more investment in those type of programs so that we're reaching to the people that, you know, the policymakers, State of California basically said we need to help, you know, immigrant businesses, all of our businesses there, to contribute to this economy.

And.

You know, I'd be remiss if I said we don't want more money in that Fund because we can always use more money.

And part of that whole fund is also a contribution to what we call the capital infusion program, which also helps us get guaranteed dollars, loan dollars out to our small businesses as well, or at least educate them and prepare them to get the lending.

I think so often, you know, that's a big investment, because so often, you know, you always hear about banks will tell you, well, we got money to lend. Our problem is that we need to make sure that our businesses are capital ready, right?

And that they know what they need in place, you know, and grow them so that they have the capacity to get that loan. And then we continue to, you know, argue that we need more money, more dollars. But, you know, we're working with the banks to improve that area.

But with the state, again, I just think that we need to start looking at are those TAP dollars being invested where. I think policymakers feel that it should be invested in their communities.

Just real something to add to that. I think what's important, too, is there's so much procurement out there and there's so much to that, but we need more Latinos on boards and commissions to manage that and I think if we had more, you know, they put more of an emphasis right. On trying to help.

Not, not saying that the boards and the commissions don't, but it'd be a little bit different. You know, we, we know how that works. Exactly.

Well, two things on that. Well, I heard you discuss earlier that there is, you know, the lawsuits to businesses is really causing a lot of, you know, heartache to, to small businesses.

In fact, I just had a press conference this last week with Senator Niello from the Inland Empire who had, who has a Bill, SB 84, that, that wants to, what we're intending to tackle the, I'm going to say, predatory practices of lawyers going into our small businesses and finding small little things to sue over.

And the reality is that small businesses can handle. It cannot. In fact, one of them says that every year they budget $50,000 just to put it aside.

So when they come coming, they just kind of hand over the money so they don't have to go to court and deal with all the, you know, they just can't sustain it. Bottom line. And I share it. There's a couple of women that I know, I work well with Latina Business Women Association.

And there's one particular woman who came crying to me one day. She did quite well. Small business grew over $1.0 million. She was almost hitting a $2.0 million mark and then there was a lawsuit and she lost everything. And she was crying for help.

And it really pained me because I didn't know how to help at the time because, you know, the lawsuit was underway and there was nothing I could do. Just for everyone listening, SB 84 by Senator Niello. I'm a co-author along with many other colleagues.

And that would give small businesses the ability to cure whatever the issue is and not an automatic payment or lawsuit. They have to give a certain amount of time to cure the issue. And I think that's the way to go.

In particular because it might be something as simple as a doorknob or a ramp that could have been fixed and yet it ends up taking down a business because they cannot sustain the hit. So, so that's underway. So hopefully we can get five of those a year. There you go. And so hopefully we can get it done.

He attempted last year and it didn't make it through. I believe it was vetoed. And so we know that these little fixes may be small but critically important, especially to those small businesses that don't have a lot of capital. And so we're looking at those types of solutions to help with that, I would say abuse of litigation.

And it's constant from disability rights. And again, it has nothing to do with disability individuals. It's just a matter of going from business to business suing. So we're trying to tackle some of those abuses.

But I know for me, like I said, I wanted to walk away with some tangible must dos for all of us to achieve the goal that we want to achieve in this Committee. And we did talk about the education and access to capital.

So it brings me to our next Committee hearing, which will it will happen August 14th.

We're going to do that in the Bay Area and that in particular is going to engage leaders in the financial space equity sector and making sure that we figure out opportunities for Latino businesses, minority businesses, to open up the doors to access for capital and everything.

The entire list that Senator Valladarez mentioned, there's so much to do in so little time. So our commitment is to continue having these Committee hearings in different parts of California. We know the next one will be down in Los Angeles after we do the Bay Area. And then we'll be tackling issue by issue.

But we are going to compile somewhat of a report for our colleagues. So it just doesn't stay here. So we have tangible deliverables for you at the end of the conclusion of these committees.

And what I'd like to do, I know that we had asked for top two ideas, top two or three, but if you can maybe write some kind of, I'm just going to say, top line items for us to share with our colleagues, that would be great. I have 20 that I've written myself from.

Again, the abuse of lawsuits and litigation just for the sake of suing.

But I'll tell you, when I heard some of the cost drivers and you talked about building homes, I remember when I became a Senator, I think it was 2019, I heard some of friends saying how expensive it is to own a home and how back in the day our parents used to be able to afford a home with very little.

And then I did an analysis and it turns out through my analysis that each home now costs, I think it was $50,000 more per average just based on the policies we implemented that year alone. And that was from like solar panels to everything that we mandate.

And so it's, you know, it's something that we as legislators have to also contend with, that we put mandates on builders and that mandate will eventually drive the cost up for families to own a home. And so I'm very mindful of those things.

And I'm going to continue to sort of push for analysis and data on that front because on one hand, we cannot be saying how expensive it is to, to buy a home. And you know, how it's so expensive that builders are building these homes that are unaffordable.

But yet on the other hand, we're the ones that are passing legislation and policies that are mandating such high cost on builders and businesses. So I think one of you said it, the cost will be eventually pushed down to our consumers. And, and so we have to find that middle ground.

You know, we want to do right by our environment, making sure that our policies are, are really focused on the next generation climate change and everything that we need to do.

But at the same time, consider where we're at in this moment and how unaffordable it is for the next generation coming up who share all the time they cannot leave home because they can't afford it. And so finding that balance will be a challenge, but nonetheless something that we have to look at.

And so I want to thank all three of you for joining us today. As I mentioned, for those that are listening, the next Committee hearing will be in August in the Bay Area. We really wanted to travel up and down the state to hear different perspectives and see different areas in California.

After that, it'll be in Los Angeles. But we'll certainly make sure that everyone gets the information. The next topic again will be access to capital and business opportunities and how we can grow our businesses, making sure that we bring the financial institutions to the table and also press them.

Why is it that some are doing great in terms of lending to minority groups and others are not? So we'll figure out that gap. And with that, I just want to thank all our guests today. I want to thank Senator Valladares and, and at this point, we are now concluded. Thank you very much.

And we'll see all of you very soon. Thank. Thank you.

Thank you, Senator. Thank you.