Hispanic Economics

Look Who’s Doling Out BP Compensation

Commentary by Louis E.V. Nevaer, director of Hispanic Economics, Inc. 

If history offers any lesson, it is that there are powerful reasons why Hispanics, and other minorities, cannot trust Ken Feinberg, as claims against British Petroleum move forward.

Ken Feinberg has been tapped to administer the $20 billion fund BP has promised to set aside in an escrow account to compensate victims of the Gulf of Mexico oil spill. He just toured the Gulf States to make the case that those with claims against the oil giant should participate in the fund.

“This program I am running is absolutely voluntary — nobody has to do it,” he told listeners, many of whom were skeptical that a deluge of claims could be settled fairly and quickly, given the tens of thousands affected. “It’s my opinion you are crazy if you don’t participate.”

Feinberg was tapped for this position because of his history of negotiating settlements to extraordinary claims in the past. Most recently, he was appointed “Pay Czar” by President Obama, with the authority to review pay at seven of the financial institutions that took the largest bailouts. His report showed many banks, including Citgroup, J P Morgan Chase and Goldman Sachs, had paid out record bonuses causing a public outcry but no real action.

Prior to this appointment, Feinberg became famous in his role as the “Special Master” in charge of the Victim Compensation Fund (VCF) set up by Congress weeks after the September 11, 2001 terrorist attacks.

Before that, he successfully negotiated a settlement between Vietnam veterans injured by the herbicide Agent Orange and the companies that manufactured that defoliant, and before that, he represented women who were harmed by the Dalkon Shield birth control device.

But for Hispanics – and some other minorities – the question remains: Will Ken Feinberg be fair this time?

An examination of his history demonstrates that minorities, especially Latinos, got the short end of the stick when it came to compensation.

It is true that there are powerful forces working against Hispanics – demographic and cultural – but it is also true that Ken Feinberg has appeared to be indifferent to ameliorating these biases.

Consider the VCF case. When Congress set up the Victims Compensation Fund, its purpose was not to protect the interests of the families who lost loved ones on September 11. It was to protect the airlines from the victims. Congress was concerned that the airlines would be liable for tens of billions of dollars in potential legal claims. In a desperate effort to save the nation’s entire transportation system from collapse, it quickly established the Air Transportation Safety and System Stabilization Act to protect the major carriers from civil lawsuits. Families that chose to receive VCF compensation surrendered all claims against the airlines, the Port Authority, which owned the World Trade Center, and any other potential party which may, or may not, have contributed to events leading to the terrorist attack.

For Hispanics, there were two fundamental flaws. The first arose from demographics: Hispanics are almost a decade younger than non-Hispanics, 9.5 years to be precise. This means that, regardless of job or position, Hispanics will be, statistically, almost an entire decade junior to their non-Hispanic colleagues. And the younger one is, and the more junior position one holds, the less one is entitled to receive. Reporting on the VCF in the New Yorker, Elizabeth Kolbert summed it up this way: “At first glance, the tables defy most notions of equity; the more needs a family is likely to have, the less well it fares.” 

Another factor worked against Hispanics. Not unlike other minorities – Asian immigrants, for example, Hispanics are slow to challenge authority or speak up for their rights. When Feinberg made a Hispanic family an offer, almost all meekly accepted the deal.

This was a far cry from non-Hispanics – Caucasians and African-Americans especially – who have a long history of fighting powers that be. African-Americans and Jews fared well under Feinberg under the VCF program. Asian victims, for the most part, were primarily Japanese citizens working for Japanese banks located in the World Trade Center, and their government defended their nationals’ interests.

That left Hispanics and Latinos without any advocate and left to Feinberg’s whims. “On one occasion, I heard him promise to give a widow an additional half million dollars for no other reason than that she had come in with her two small children and asked for it,” Elizabeth Kolbert reported in December 2002.

How did Feinberg justify his capricious behavior? “The law gives me unbelievable discretion,” he told Kolbert. “It gives me discretion to do whatever I want. So I will.”

If one examines the cumulative impact of Hispanics’ younger demographics and cultural reluctance to rock the boat – especially in the current climate of hostility against Hispanics engendered by the raging immigration debate – it is easy to see how the average life lost on 9/11 was valued so radically differently by Feinberg: A Hispanic killed in the World Trade Center had his or her life valued at almost $800,000 less than the average non-Hispanic killed that same morning.

So what can minority victims of BP hope to expect from Ken Feinberg? Given his track record, it is important that Latino advocacy groups -- from MALDEF to the National Council of La Raza -- step up to the plate and help Latinos know their rights, know the built-in biases against them, and know Ken Feinberg's history of short-changing them and demand fair and just compensation. It may have eluded them after September 11, but it need not be outside their reach this time around.

“It’s a campaign,” Feinberg told reporters on July 15, 2010, when he was touring in the Gulf region. “It’s a road show. It’s a seminar.”

If they don’t watch out, Hispanics and other minorities might find it’s also a farce.

The North American Academy of the Spanish Language, known as La Academia Norteamerican de la Lengua Española  (ANLE), has made it official: a person who speaks Spanish and lives in the U.S. is a "Hispanounidense."  Now that the United States is the second-largest Spanish-speaking nation in the world (only Mexico has more Spanish speakers) this word clearly establishes both linguistic and cultural heritage (hispano) and nation-state of residency (the United States).  "Latino" always proved problematic because, technically, it also includes Italians, French and Portuguese.  Similarly, "Hispanic" offered no indication of a person's nation-state of residence. 

"Hispanounidense" clearly defines both cultural and linguistic heritage, and residency in the Hispanic Diaspora of the United States.

¿Se habla español?

Demographers anticipate 2050 Hispanics will account for 35 percent of the U.S. population.  They’re already reached this level in California, where they represent 32 percent of the state’s residents.  And Hispanics, Latinos and Latins are not only growing in numbers, but in political and financial power as well.

So what does this mean for your industry?

The United States is in the throes of becoming a bilingual consumer economy, and it is experiencing a growing demand from clients who want to reach the Hispanic, Latino and Latin consumers.  The number of bilingual marketing, merchandising and branding campaigns is steadily increasing.  To be successful in business today – and not embarrass your organizations – managers need to be sensitive about how they develop and implement their campaigns aimed at Hispanic, Latino and Latin consumers.

Lost in translation

Traditionally, non-Hispanic managers took existing ideas and press materials and simply translated them into Spanish.  Unless you’re translating “Sale” into “Venta,” or “Exit” into “Salida”, that approach is just loco. Too many cultural nuances are lost in direct translations and you will do more harm than good by trying this approach. As with all effective campaigns designed to reach consumers and clients, to make that emotional connection that means the most to your audience you must put yourself in the position of the end user, and approach “in-culture” authenticity. The Hispanic public is much more likely to respond positively to messaging developed by people – and being “Hispanic” is not a requirement – who understand their culture, aspirations and ambitions best. 

Simply putting Spanish language text onto an English-language campaign does not mean it is suitable for the Hispanic, Latino and Latin markets.  Manager and marketing professionals need not only to generate fresh media materials that will convey the proper meaning, but also to develop targeted campaign strategies and tactics. 

Consider, for instance, how Wal-Mart spent a year conducting focus groups and analysis of the differences among Hispanic consumers – between “Caribbean Hispanics” versus “Mexican Hispanics” and the differences between Hispanic consumers and Latino consumers and recent Latin American immigrant consumers, before they opened “Más Club,” a Hispanounidense version of Walmart’s Sam’s Club, which has 143,000 square feet and is located in Houston.

Internal change

If you are not of Hispanic ancestry you are, of course, at an initial disadvantage simply don’t know all the ins and outs of the culture.  But don’t assume that by virtue of being “Latino” means that you are informed about the differences between the ranges of “Hispanicity.”  This is true for everyone.  Just because you’re as “American” as they come, doesn’t mean that you automatically know that the “lift” is an “elevator” in England, or that a “biscuit” in Australia is what Americans call a “cookie.”  Culture is not something that can be taught in one training session, but being aware of your limitations is the first step in surpassing them.  Culture is a process, one of being informed and trying to get to the grain of the matter.  Cinco de Mayo is an American holiday, not a Mexican holiday, and if you presume it is Mexican Independence Day, you’re mistaken.  (Mexicans celebrate their independence on the eve of September 15, and then celebrate the Independence Day throughout September 16.  Remember, the worst thing you can do is fake it, which is the quickest way to turn off an audience. 

As professionals we need to attract more talented managers, Hispanic and non-Hispanic alike, who can offer guidance to the “in-culture” nuances, the right buttons to push and the right way of framing messages.  This is one reason Mexican companies in the U.S. from Tecate beer to Wonder Bread (I’ll bet you didn’t know Wonder Bread is owned by Bimbo, a Mexican company, which is the largest baked goods company in the world, and some of their brands are so ingrained in American culture that most Americans think they are American – Oroweat, Thomas’s English Muffins, Wonder Bread). 

In order to reach out effectively to the target demographic groups, you must understand the culture.

What is your organization doing to prepare for the future that has arrived?

Apple chose "Managing Hispanic and Latino Employees" as one of the select titles to be offered for sale at the iBookstore, part of the iPad. This is the only book selected for the iPad's official launch that deals with management issues and Hispanic employees. To purchase this title on your iPad, go to the iTunes section, then look for the iBookstore tab.

If you don't have an iPad, you can purchase the book on Amazon.com by going to:

http://www.amazon.com/Managing-Hispanic-Latino-Employees-Supervising/dp/1576759458/ref=pd_rhf_p_t_1

“Univision Communications, the nation's largest Spanish-language media company, is lending its TV and radio airwaves to the “Ya Es Hora” (It's Time) campaign to motivate [Hispanics, Latinos and Latins] to participate,” Meg James reports in the Los Angeles Times.  Cesar Conde, president of Univision Networks, answered a few questions:

What does this year's census mean to [Hispanics, Latinos and Latins] and Univision?

The 2010 census is going to go down in history as the census of the [Hispanics, Latinos and Latins]. We have the opportunity as a country to really embrace the fact that we are moving to a multiethnic society. That is one of the strengths of our country today. We as a company, and we as a community, are very excited by that.

How did the 2000 census change Univision's business?

It helped us to begin to have more conversations with organizations that were starting to realize the role that this community would play across all aspects of our country -- social, economic, political and cultural -- through the coming years and decades.

Fast-forward to this coming census in 2010, and I think it's going to be a big wake-up call. What will surprise people is the exponential growth of the Latino community, coming off of an already big and growing base. Second, we are going to begin to see growth in the Hispanic market in parts of our country that people don't necessarily expect. To see the growth of the Latino population in Los Angeles, Miami and New York is wonderful but somewhat expected. You are going to see more growth in geographic pockets, places that people don't intuitively think of as part of the Hispanic community.

How great is the fear that Spanish speakers and other immigrants might not recognize the importance of the census form?

This is why we have become so proactive in ensuring that we communicate to our community how important the census is. We have to communicate what is the benefit, what is the value, of filling out this census not only for themselves as individuals but also for their local communities, and our community. Univision is in a unique position because of our unique connection and relationship that we have with Hispanics.

How do you reassure people that filling out a government form will not invite problems?

Confidentiality is a big issue in the census. We tried to pick our most trustworthy talent on Univision to speak about the importance of this issue, putting our most trusted voices out there to become the face of the "Ya Es Hora" campaign.

[Univision news anchor] Maria Elena Salinas is our primary spokesperson. She and the others talk about why people can trust this process. We literally allocate material airtime to walk our audience by the hand through the process. We will be running this series of stories and public-service announcements through and past April 1 to address this concern and talk people through some of these issues that are, at the end of the day, important for them and beneficial for them.

Not only that, but an increasing Latino population benefits Univision.

Our mission here at Univision is to inform, entertain and empower. Most people can get their arms around the first two, informing and entertaining, because they are such a key part of what we do. That third one, empowerment, is sometimes a little more nebulous. This concept is that we need to make sure that we are working on the issues that most impact our community. We have this incredible privilege to have this leadership position and to have this unique relationship with our audience. And with that privilege comes a responsibility, one we take seriously.

2010 is a very big year for many [Hispanics, Latinos and Latins] and Univision. Which is more important: the World Cup or the census?

(Laughs.) It's going to be telling [Hispanics, Latinos and Latins] how important it is to fill out the census during the World Cup.

With approximately 1,281 executive and director positions available at the companies surveyed by the Hispanic Association on Corporate Responsibility, Hispanics held only 61 of those positions.  The face of America is changing rapidly. U.S. Census Bureau estimates that by 2050, one out of every four Americans will be of Hispanic decent. With the current Hispanic population nearing 50 million and expectations of it more than doubling, why hasn’t there been a stronger effort for corporations to attract, hire and retain Hispanic employees? Couple that with the inequality of pay for Hispanics in the corporate workplace, one has to ask, “Has Corporate America missed the boat?”  This May, we encourage executives throughout the nation to participate in the Hispanic Association on Corporate Responsibility’s symposium in San Francisco.  More information is available at HACR.org

We fully endorse the Immigration Policy Center’s recommendations on immigration reform as described in the report, “FOCUSING ON THE SOLUTIONS: Key Principles of Comprehensive Immigration Reform” which consist of:

Legalization: Requiring the 10 to11 million unauthorized immigrants residing in the U.S. to register with the government and meet eligibility criteria in order to gain legal status is a key element of comprehensive immigration reform. This section examines key principals to a successful legalization program.

Employment Verification: It is likely that Congress will transform the way employers verify the work authorization of their workers. Since this will affect immigrants and citizens alike, and because an error in the system can cost a worker his job and paycheck, it is important to make the system effective. This section lays out the must haves for any broad employment verification system and explains why a system like this must be implemented as part of broader immigration reform.

Enforcement: Comprehensively reforming our broken immigration system will necessarily transform the role of immigration enforcement. Legalization of unauthorized immigrants already in the United States will result in a significantly smaller unauthorized population, and the creation of flexible legal channels for those immigrants we need will ensure that future flows of illegal immigration are minimal. However, there will continue to be a need to enforce our nation’s immigration laws. The challenge is designing appropriate, effective enforcement mechanisms for a new, well functioning legal immigration system. This section examines key principles for immigration enforcement within the context of comprehensive immigration reform.

Family: Family based immigration has always been a pillar of the U.S. immigration system. However, many close family members of U.S. citizens and legal permanent residents are currently waiting years, if not decades, to reunite with their loved ones. Reforming our broken immigration system will require us to transform our family based immigration system, clear out the backlogs, and allow law abiding families to reunite with loved ones in a humane and reasonable timeline.

Future Flow: Comprehensive immigration reform must address the future needs of the U.S economy and create a well functioning and flexible system of permanent and temporary visas for both high skilled and low skilled workers. Policymakers must recognize that if we create a legal immigration system that functions well, there will be less pressure on immigrants to come to the U.S. illegally and for employers to hire unauthorized workers. Given the current weakened economy and high unemployment rates, it is difficult to estimate the U.S.’s future labor needs. However, the economy will eventually improve, and a reasonable, flexible legal immigration system must be put into place to fill our future labor needs. If the U.S. is to thrive in the globalized 21st century economy, employment based immigration must be seen as a strategic resource that can both meet labor market needs and foster economic growth and competition while still protecting U.S. workers and improving wages and working conditions.

Naturalization and Citizenship: Immigrant integration benefits everyone because it enables immigrants to realize their full potential, contribute more to the U.S. economy, and develop deeper community ties. While the United States encourages legal permanent residents to become citizens, there is no national strategy for facilitating integration and insufficient infrastructure to facilitate a smooth transition from immigrant to citizen. Failure to address this problem in the context of comprehensive immigration reform could lead to endless delays for the millions who currently seek services from USCIS and the millions more who will become part of the applicant pool following legalization. This section examines the benefits of a comprehensive integration strategy as well as key principles for naturalization and integration.

As the Census 2010 begins to go underway, there are a few eye-opening facts indicating the rapid ascendance of Hispanics and Latinos in the American workforce.  Consider:

·                     Hispanics are almost a decade younger (9.5 years) than the general population;

·                     More than a third of Hispanics are younger than 18 years old;

·                     Fertility rates of Hispanics are higher than the natural replacement level;

·                     More than 34 million Mexicans have a legal claim of some kind to seek to emigrate to the United States, which will be discussed later in the discussion presented;

·                     Hispanic women who attain graduate degrees earn more than 15 per cent than their non-Hispanic counterparts;

·                     In September 2008 the United States replaced Spain as the second-largest Spanish-speaking nation in the world; only Mexico has more Spanish speakers; and

·                     By 2050, although 1 out of four Americans will be Hispanics, because of the majority of Hispanics and Latinos will be of working age, 1 out of 3 Americans in the workforce will be Hispanic or Latino.

The dangers of a “little knowledge” are an increasing concern for many managers throughout the U.S. when it comes to the Spanish-language proficiency of their Latino employees.  Unlike Latin American managers, or Hispanics who have taken Spanish grammar classes, most “Latinos” in the U.S. are not familiar with standard business Spanish.

How does one say, “To whom it may concern” in proper Spanish?  Chances are, a Latino employee doesn’t know.

Indeed, many Latino employees tend to use English-influenced syntax and vocabulary in their daily speech, at home and at work.  An example?  One of the definitions of “application” in U.S. English is “a form to be filled out by an applicant, as for a job or a driver’s license.”  In Spanish, however, the proper word is “solicitud,” similar to the British usage of a “solicitation” for employment.  As a result, the business phrase “to fill out a job application” is not, as most Latino employees say, “llenar una aplicación de trabajo,” but should be, “llenar una solicitud de trabajo.”  This common error also occurs when there is a direct translation from English usage into Spanish: “to play a role,” is improperly translated into “jugar un papel,” when the proper words are either “desempeñar,” o “representar.”

The importance, of course, is that improper use of standard business Spanish can undermine an organization’s credibility.  Improper Spanish language usage diminishes the professionalism projected to customers and clients, and prospects for success are diminished.

As a result, an increasing number of companies are developing “Business Spanish 101” for their Latino managers.

When President Obama appeared on “Al Punto,” or “To the Point,” Univision’s weekend news program hosted by anchor Jorge Ramos. Ramos questioned the President about undocumented immigrants, health care reform and his promise to reform the U.S. immigration.   Ramos politely, but firmly, pressed President Obama to answer to his promises made to the Hispanic Diaspora in the U.S. —“la promesa de Obama”.  The answers clearly show that the president remains committed to immigration reform but who is also facing a series of practical challenges that have consequences for his full political agenda, with the realities of Washington challenges his promise of “change.”

A portion of the transcript as provided by Univision follows:

Jorge Ramos
Do you believe that undocumented immigrants should be required to buy insurance? Basically, what I would like to know is, could you clarify if they will have access to private insurance in the exchange?

President Obama
Right now, the plan that we’ve put forward, I want to be absolutely clear, should not include undocumented workers, because I think that as is true with SCHIP, as is true with all our various social insurance programs, you’ve gotta be an American citizen, or at least a legal resident in terms of access for those programs. Now, as I’ve said before, and as I did with SCHIP, I do think that children of legal residents, for example, should have access to care. That’s good for all of us. And that’s a principal that I will continue to fight for.

Jorge Ramos
But if an undocumented immigrant wants to buy private insurance…

President Obama
If they want to buy private insurance, then that’s between them and their private insurer, but they can’t do it through the exchange because the exchange is going to be part of an overall plan including subsidies and I don’t think it’s fair for American taxpayers to be including those subsidies. Particularly when there’s not gonna be a lot of money to go around.

Jorge Ramos
Then, there are going to be millions of people who are not going to be covered. So if undocumented immigrants can’t get either public or private insurance, then they’re going to keep on going to the emergency rooms of the hospitals, and this is too expensive. Isn’t that exactly what you wanted to avoid in the first place?

President Obama
Well look, the… Here’s what I’d like to deal with. I’d really like to solve our immigration problem, but I can’t solve every problem all at once. The immigration problem is one set of problems and a whole range of issues are raised through immigration. Healthcare is a problem that doesn’t just affect all Americans. It especially affects Hispanic Americans, who have the highest rate of uninsurance. Now I’m not talking about undocumented now.

Jorge Ramos
I have a specific problem and let me see how we can find a solution. There are four million children born in the United States who have at least one undocumented parent. What are they supposed to do?

President Obama
Well, if they are born in the United States, they are U.S. citizens. And we’re gonna make sure…

Jorge Ramos
Yes, but one of their parents…

President Obama
We’re gonna make sure that those children are covered, as we already have expanding coverage with respect to SCHIP. As I said, Jorge, we’re gonna have to solve the immigration problem. That’s a commitment that I have made.

Jorge Ramos
I’m interested to know what happened after Joe Wilson said you lied in Congress. Was that the moment in which you think undocumented immigrants got involved into these healthcare debates?

President Obama
No, no, no…

Jorge Ramos
What happened?

President Obama
Well, well… Keep in mind, first of all, I said that undocumented workers wouldn’t be covered before Joe Wilson shouted. So obviously, if there was any cause and effect, it wasn’t from what I said. It wasn’t me responding to him. But this is a position that I have said consistently during the campaign. There’s been no change in my approach.

Jorge Ramos
Now, in your speech to Congress you used the words “illegal immigrants.” However, and I remember very clearly, during the campaign you were very careful to use the words “undocumented immigrants”. Why the change? You said words matter. Now, why do you choose to use the language that is being used by…

President Obama
Well, keep in mind…

Jorge Ramos
…those who criticize immigrants.

President Obama
Well, keep in mind what I was addressing. I was addressing misinformation by the other side that was engaging in scare tactics. So I was essentially quoting them. I was saying, “for those of you who are saying that illegal immigrants are going to be covered under this plan,” I said that’s not true. Right? So I’m using their language because I was addressing the misinformation that they are providing. And I was speaking directly to an audience, the American people, who because of this misinformation, I think actually were very responding oftentimes in a negative way.

Jorge Ramos
OK, so. But what I wanted to ask you is about what Latino’s call, “la promesa de Obama - Obama’s promise.” On May 28th you told me, and I am quoting, “what I can guarantee is that we will have in the first year an immigration bill that I strongly support.” And then I asked again, “in the first year?” And you said, “Yes, in the first year.” This is your promise and the question that many of them have is, are you going to keep your promise. Can you do it before January 20th?

President Obama
Here’s what I’ve said. I have met with not just the Hispanic caucus, but leaders from both the House and the Senate, Republican and Democrat. I’ve said I want to get this done. I’ve put Secretary Janet Napolitano, of Homeland Security, in charge of first making a whole host of administrative changes and eliminating the most negative practices that we have been seeing. And then what I’ve said is, start working up legislation that we think can, over time, move through Congress. Now, whether that bill gets introduced on November 15th or December 15th or January 15th, that’s not really the issue. I mean, it would be easy for us to get a bill introduced. The challenge is getting the bill passed. And there I’ve been realistic. What I said is that this is going to be a tough fight and that we’re going to have to make sure that we are working as hard as we can to do it. I am not backing off one minute from getting this done, but let’s face it, I’ve had a few things to do. We had an economic crisis that almost…

Jorge Ramos
I understand.

President Obama
…saw a financial meltdown. Healthcare has taken longer than I would have liked, but it’s a big, tough issue. Immigration reform is gonna be tough as well, but I think we can get it done.

Is your organization ready for the revelations bound to be made by the Census Bureau as it conducts the census this year?

No doubt the Census Bureau will confirm what you already are experiencing:  sweeping demographic changes that are fast transforming the role of Hispanics and Latinos in the American labor market. 

Consider two facts:

·                     Hispanics in 2005 comprised 14% of the nation’s population, but constituted 22% of workers today.  That Hispanics are almost a decade younger than the population at large means that Hispanics, Latinos and Latin American immigrants, disproportionately, are of working age, either leaving college and entering the workforce, or well on their way to establishing their careers; and

·                     Hispanics in 2050 will represent 32% of the nation’s population, but will comprise 55% of workers.  As America’s baby-boomers and Generation X-ers mature and retire, Hispanics and Latinos, native born and Latin American immigrants alike, will dominate the workforce.

These demographic changes are sweeping daunting, and proof positive of the ascendance of Hispanics and Latinos in the American labor market.  The closest phenomenon in living memory remains the entry of women in the workforce after World War II:  While women constituted less than 12% of all workers in the 1940s, women today constitute half of all workers currently employed. 

The lesson? Hispanics today are what women were to management in the 1950s: A challenge that must be met because it is a reality that cannot be ignored.