Merchants Attribute Latino Sales Slump to Change in Immigration Law

Sales have dropped significantly for some merchants along Pacific Boulevard-- the Southeast’s largest shopping district catering to Latinos--as uncertainty over the new immigration law looms over illegal immigrants, businessmen say.

The decline has affected mostly stores offering big-ticket and luxury items such as home appliances, furniture and jewelry, but vendors of inexpensive merchandise such as baby clothing also report slumping sales.

Merchants say the declining receipts coincided with the new immigration law, which took effect May 5.

The businessmen speculated that sales have dropped because illegal immigrants are saving their money to pay fees to qualify for legal residency under the new immigration law’s amnesty program. Those fees can amount to hundreds of dollars per family.

‘Unknown Is Out There’

Immigrants also are not buying large and expensive items that would be difficult to take back to their home countries if necessary. And finally, some potential customers have left the country and taken their savings with them, merchants said.

“I think what they’re doing is saving up the money because the unknown is out there,” said Rudy S. Griego, president of the Huntington Park Chamber of Commerce. “They’re not spending like they (were) before. They’re buying the necessities, just food and clothing and medical.”

Griego owns Americo International Immigration Inc. in Huntington Park, which provides various immigration services, including assistance with amnesty applications.

Arturo Saro, manager of Medrano Jewelers, said a decline in sales has prompted his store to reduce its budget for advertising on Spanish-language radio. He said he first noted the decline in February, three months after President Reagan signed the immigration bill into law.

Cash sales, which account for about 70% of Medrano’s business have declined 60% to 70%, Saro said. The jewelry store, he said, is relying on income from credit sales of months before to survive the dry spell. Ninety-five per cent of Medrano’s clientele is Spanish-speaking, Saro said.

‘Luxury Is Secondary’

“They’re going to want to save their money if they have to return to Mexico,” Saro said. “Luxury is going to be secondary. (The law) affected us too much.”

At nearby La Popular Furniture store, salesman Hugo Gomez said he first noticed a decline in spending by Spanish-speaking consumers last December, when he worked at a furniture store in heavily Latino East Los Angeles. He started working at La Popular in April.

“It’s been like day and night,” said Gomez, who stood steps away from a new refrigerator that carried the sign, Quiero Ser Tuyo (I want to be yours). “All I sold yesterday was $59 (worth of furniture), and this is an established store.”

Store manager Ray Gutierrez said business is down at least 5% from last year.

Huntington Park is the only city in Southeast Los Angeles County where merchants say they have noticed a sales slump. Chamber of Commerce presidents and managers of nine other heavily Latino cities in the area said they received few, if any, reports of declining sales from their members.

Too Early

One Huntington Park official said it’s too early to worry about declining sales, which could affect city revenues from sales taxes.

The city posted record figures for taxable sales in the second quarter of 1986--$84.7 million--and nearly duplicated the figure in the third quarter, said Donald L. Jeffers, the city’s chief administrative officer. Huntington Park has not received sales reports from the state for the last three quarters, he said.

“I don’t see any negative trend right now, but we’ll be watching the figures,” Jeffers said.

Nevertheless, many merchants say life is a little slower these days along Pacific Boulevard, the Southeast’s answer to the Broadway commercial district in downtown Los Angeles, Southern California’s major Latino shopping area.

Many of the signs on Pacific are in both Spanish and English, and Mexican music blares from some storefronts. It is as easy to find a Spanish-speaking salesman as it is to find one who speaks English.

Street Scene

On a recent afternoon, couples walked the boulevard window-shopping. Mothers pushed baby carriages and young girls laughed and ran by. A young man handed out an advertisement in Spanish for a business offering legal help on immigration matters. Another passed out a handbill for a baby-clothes store.

“There used to be more people,” said the 24-year-old man, who worked for the clothing store and asked not to be identified. “That’s why they lowered my salary ($1.25 per hour.)”

Illegal immigrants have always been in a precarious position, but the new immigration law has amplified the uncertainty, critics say.

Under the amnesty provision of the law, illegal aliens who have lived in the United States since before Jan. 1, 1982, are eligible to apply for legal residency in this country. The application period ends May 4, 1988.

Community leaders say many immigrants will have trouble documenting their stay. And for those who do not qualify for amnesty, it will be increasingly difficult to find or hold a job because the law will eventually penalize employers who knowingly hire illegal aliens.

‘People Are Scared’

“People are scared,” said Father Rody Gorman, pastor of the St. Matthias Catholic Church in Huntington Park and an organizer of the newly formed southeast chapter of the United Neighborhoods Organization. “There is a great fear of deportation if they don’t qualify.”

Some of the merchants on Pacific Boulevard said they have helped long-time customers document their time in the United States. And the same businessmen said the new immigration law has forced them to modify business practices.

John Lara, manager of Joyeria Azteca, said the jewelry store has tightened its credit policy. In the past two months, six customers left the country and either returned merchandise or took it with them without retiring their debt, Lara said. As a result, he said, the store is closely examining credit histories.

However, Lara said 90% of his sales are on credit and he must be careful not to drive away customers. The store manager said he uses subtle techniques to determine how long a potential buyer has been in the United States, an indication if he is likely to qualify for residency.

“We really can’t ask, ‘Do you qualify?’ We’re not Immigration (and Naturalization Service),” he said.

Downturn in Business

If a potential customer has not been in the country long enough to qualify, Lara said, he is not likely to receive credit.

In the past two months, business at Joyeria Azteca is down about 10% contrasted with last year, he said.

Some merchants said business appeared to be on the rebound after falling off about the time the new law went into effect. Other said they hoped the trend would reverse itself soon.

Eric Park, manager and salesman at A’s Children Shop, said business at the clothes store has fallen as much as 15% in the past two months.

“I’m considering putting on a sale to attract more people,” he said.