Fairlie on Hispanic Business Ownership

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UCLA Luskin Public Policy Chair and Professor Robert Fairlie was quoted in a ShareAmerica feature on the growing number of Hispanic and Latin American entrepreneurs in the United States and how their contributions are boosting the economy. The story cites research from Stanford Graduate School of Business’s “State of Latino Entrepreneurship” report published in March 2024 which showed a 57% increase in Hispanic entrepreneurship between 2007 and 2022, with about 5 million Latino-owned businesses contributing $800 billion to the U.S. economy. The story also cites U.S. Department of the Treasury data showing that almost a quarter of new entrepreneurs in the U.S. were Latino in 2021. Fairlie suggested that this increasing entrepreneurship is partially due to immigrants who start businesses at a higher rate than non-immigrants. “Immigrants take some initiative to leave [their countries of origin] and come to the U.S., and thus might be more risk-taking and entrepreneurial,” Fairlie said.

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Fairlie on Trend Toward ‘Pint-Size Startups’

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Robert Fairlie, chair of Public Policy at UCLA Luskin, spoke to the Wall Street Journal about “pint-size startups,” new business ventures that are operating with relatively lean staffs. While the number of people taking initial steps to launch a business surged during the pandemic, the average number of employees they hired fell sharply. Reasons for this trend include pandemic-related headwinds that have slowed hiring and entrepreneurs’ decision to keep operations small to maintain a healthy work-life balance. Keeping head count down can make it easier for young businesses to adapt to the ups and downs of the economic cycle, Fairlie said. “At some stages of growth for a small business, it can be pretty valuable. They have that flexibility,” he said. “At some stages of growth, it will hurt them.” Contractors tend to be less loyal than full-time employees, who are more likely to be committed to a company’s success, Fairlie explained.

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A Spike in Entrepreneurship Among Latin American Immigrants

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Robert Fairlie, chair of UCLA Luskin Public Policy, spoke to the Wall Street Journal about a spike in entrepreneurship among Latin American immigrants, who are starting businesses at more than twice the rate of the U.S. population as a whole. Startups of all types swelled in 2020, as COVID-19 upended work lives, changed consumer behavior and created business opportunities, according to an analysis of U.S. Census data conducted by Fairlie. “COVID has put us on a different trajectory,” he said. One reason that Latin American immigrants have maintained a strong entrepreneurial momentum is their focus on sectors that have experienced increased demand since the onset of the pandemic, including food, services and delivery, Fairlie said.

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Fairlie Discusses Economic Impact of High Unemployment in California

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Robert Fairlie, a professor of economics and public policy, recently discussed the long-term implications should the state’s job growth continue to lag behind the national average. Joblessness reduces overall earnings, said Fairlie, chair of UCLA Luskin Public Policy, and that lowers consumer demand and hinders investment. “There is a negative multiplier effect on the state economy from the higher unemployment rates we are seeing,” he said. The story in the New York Times, which was picked up by other news outlets, focuses on the impacts of California’s high unemployment rate — 5.1% in January, which exceeded the national rate of 3.7% and was behind only Nevada’s rate of 5.4%. Among the contributing factors explored in the story are layoffs in the technology sector, a slow rebound in Southern California from prolonged strikes in the entertainment industry and varying demand for agricultural workers.

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Keeping Guard Against the Forces Behind Jan. 6

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Sandeep Prasanna MPP/JD ’15 returned to his UCLA Luskin alma mater to share a pressing message about the Jan. 6, 2021, attack on the U.S. Capitol: The threat is not over. Prasanna served as investigative counsel for the House Select Committee that issued a comprehensive, 800-page report on the insurrection. “January 6th was not just one event. January 6th was and is an ongoing effort to undermine our democratic institutions,” said Prasanna, whose team spent months interviewing or deposing about 1,000 right-wing extremists who carried out the attack. Now a senior advisor at the law firm Miller & Chevalier, he travels the country to speak with election officials about continuing threats to free and fair voting — including how to safeguard the essential workers who keep the democratic process running smoothly. Prasanna’s comments came at a Feb. 12 event marking the 25th anniversary of UCLA Luskin’s Public Policy program. Chair Robert Fairlie presented him with the 2022 MPP Alumnus of the Year Award, and Professor Mark Peterson led a conversation that touched on Prasanna’s time at UCLA. “I don’t think anyone starts a career in D.C. feeling prepared because things that you learn in a textbook are so different from interacting with people in real life,” Prasanna said. “But the thing they say about law school is that they teach you how to think like a lawyer. What I feel I learned at Luskin was how to do.” He encouraged UCLA Luskin students to take advantage of internships and other opportunities on the East Coast. “There’s a lot of work to do in California, for sure,” he said, “but I think D.C. could use more Luskin grads.”

Learn more about events marking Public Policy’s 25th anniversary. 

View photos of Prasanna’s talk on Flickr.

A Conversation With Sandeep Prasanna MPP/JD ’15

 

Michael Stoll Joins Board of Directors of American Institutes for Research

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Michael Stoll, professor of public policy and urban planning at UCLA Luskin, is one of two new appointees to the American Institutes for Research Board of Directors. Stoll, an expert in labor markets and the impacts of poverty, joins Mayra E. Alvarez, a national leader in public health policy and systems, on the board of the nonprofit organization, which is based in Washington, D.C. “We are excited to have Mayra E. Alvarez and Michael A. Stoll on the board and welcome the deep expertise they bring to key areas of AIR’s work,” said Patricia B. Gurin, chair of the AIR board. “Their experience, knowledge and insights will help the board guide the institution’s strategic direction today, and in the years ahead.” David Myers, chief executive officer of AIR, said that Stoll will join a group of experts who will provide guidance and understanding to AIR’s leadership team and ensure that the organization’s research and technical assistance work is “relevant, meaningful and mission-focused.” Stoll has previously served as a fellow for the institute, which is focused on behavioral and social science research and providing technical assistance to solve national and global challenges. He has also been a fellow at the Brookings Institution, the Institute for Research on Poverty at the University of Wisconsin, Madison, and the National Poverty Center at the University of Michigan, Ann Arbor. He has served as a past visiting scholar at the Russell Sage Foundation. In congratulating Stoll, Professor Robert Fairlie, chair of UCLA Luskin Public Policy, said, “AIR is an amazing place doing extremely important and impactful work.”

 

A ‘Hesitantly Bullish’ Take on U.S. Unemployment Trends

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A WalletHub article on U.S. states where unemployment is ticking up cited Robert Fairlie, chair of Public Policy at UCLA Luskin and a member of the National Bureau of Economic Research. “I’m hesitantly bullish on the job market for 2024,” said Fairlie, explaining that national jobless rates are still relatively low and are not likely to increase rapidly in the coming year. But he added, “The major problem many people have is that their wages are not increasing as fast as inflation. That is making it hard for people to afford to live, especially in high-cost housing markets.” Moving savings out of non-interest-earning accounts and into money market funds that pay a higher interest rate is one way that people can protect their finances, Fairlie said. 

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New Book by Fairlie Reveals Risks and Rewards of the U.S. Startup Economy

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A new book co-authored by Robert Fairlie, chair of Public Policy at UCLA Luskin, provides a broad view of entrepreneurship that challenges the assumption that startup companies in the United States create jobs and power economic growth. Federal, state and local governments spend billions of dollars each year on incubators, loan programs, tax breaks and investor incentives to encourage the formation of job-creating businesses, yet these expenditures are often made without knowing whether they lead to lasting, decent-paying jobs. In “The Promise and Peril of Entrepreneurship: Job Creation and Survival Among US Startups,” published by MIT Press, Fairlie and co-authors Zachary Kroff, Javier Miranda and Nikolas Zolas use a comprehensive new data set to provide clarity. Their findings show that startup job creation and survival rates are much lower than those typically reported by federal sources. Official statistics indicate that each startup creates six new jobs on average, and 50% of startups survive up to five years. However, those numbers reflect only new businesses that have employees, not the millions of startups that launch without employees every year, the authors found. “Understanding the early-stage dynamics of entrepreneurship is important,” they write. “Starting a business is difficult, with many potential barriers and risks,” including the legal requirements and resources needed to hire employees. The authors also explore who owns startups, focusing on differences by race and ethnicity and documenting how some minority groups face significant barriers to entrepreneurship. Fairlie’s book is among five recently getting capsule reviews by the Financial Times, which lauds its use of reliably sourced data and says it will “help those seeking to nurture an entrepreneurial culture themselves: the policymakers, academics, incubator operators and business degree students.”

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