Understanding the Riots--Six Months Later : MONEY AND POWER / MAKING IT IN THE INNER CITY : Q & A: Joe Sanchez Jr., Founder, Mexican American Grocers Assn.
Joe Sanchez Jr., owner of Civic Center Foods (La Quebradita) Market downtown, helped found the Mexican American Grocers Assn., which now has 7,000 members nationwide. The businessman, who is in his 50s, has opposed the removal of liquor stores in the hardest-hit areas of the riots. He believes business ownership, “not just jobs,” is the solution to the deepest inner-city problems.
Sanchez says he has seen the problems of Latino business owners change only slightly since MAGA set its first agenda in a coffee shop back in 1975: Latinos are still reeling from banks that set different standards for their Latino customers and federal loan agencies that have not made a strong commitment to stimulating entrepreneurship in the inner city.
Sanchez and his wife , Laura Balverde-Sanchez, president of El Rey Sausage Co., together do $20 million in sales each year.
Q: How did the riots affect your company?
A: You combine the riots, the recession and the depression, it compounded the problem for us as business people. You have more people unemployed. It’s such a big problem; you can’t just blame the civil unrest. Look at what just happened in Sacramento. Welfare has been reduced. What happens to these people? You can’t take it from the utilities. So where do you take it from? The food bill. Our sales drop.
Q: How have you kept your businesses afloat?
A: Any small, independent business doing a minimum of $200,000 a week is probably losing $25,000 a week in sales. Thankfully, we have had no layoffs. What we’ve done is cut hours. All you can do is cut hours and try to put out better promotions and specials. The products that the people are buying are not what you call profitable items. They’re 6% to 8% markups. We’re not selling any hair spray or shampoo, the products you call 28% to 32% markups. People aren’t buying them. They don’t have the money.
Q: Do you have a plan for economic recovery?
A: We have manufacturers, retailers and distributors that would make a commitment to hire the people that were displaced in the riot areas if we were only able to go to the federal government or the banks to get some loans to expand our businesses. El Rey Sausage Co. could hire 10 people: one driver, two in the plant and seven salespeople. All it would take is for these commercial banks or SBA or the federal government to help us expand those businesses. The truth is, it probably makes too much sense. And bureaucrats don’t like things that make sense.
There is no way to increase Latino ownership now, because the banks are holding onto the money. They’re only lending it to (firms with) Double-A credit. Whatever Latinos are in business now (will) have to maintain. Most of them will survive, because we are survivors. We started with very little capital. We will survive more than non-Latinos, because we are used to less.
By 1993, we want to have big areas for (street) vendors to sell their products. Most of the independent grocers and the chains do not object to the vendors selling on their property. Street food vendors are educating themselves. They are learning English. They’re learning how to buy, how to sell. And eventually they will either be working for us in the food industry or be our competitors.
Q: Citizens and public officials have said liquor stores should be removed from the inner city. What is your position on this?
A: The riots were not caused by liquor stores. They were caused by the problems of society: the problems of racism, prejudice and bigotry. They were also caused by not investing in (disadvantaged) areas with meaningful jobs. The legislators need to increase the minimum wage. They need to start concentrating on health issues, immigration and employer sanctions. It’s very easy to blame the liquor stores but not blame society.
Q: Can store owners contribute to better race relations in the inner city?
A: Definitely. But they have to want to change. What some store owners do is look angry, so the customers are afraid to ask for an extra bag for the groceries that are falling out of their arms. Knowing how to respect your customers is important. It’s not just the money. I know what the Mexican customers want. When they come in, I ask them about their families. If the kids go to the bulk candy and take one out, we don’t scold them. You let it go. It’s part of doing business.
Q: What should be happening in the aftermath to stimulate jobs and business ownership that is not happening now?
A: To create new jobs is fine, but to create new ownership is better. Let’s take the gas stations. (One company) says it is opening up 10 large stations with 20 pumps. And they’re going to create them in South-Central Los Angeles. They’re planning to hire from the area. So what? You’re going to hire a guy to pump gas? What kind of job is that after so many years? What are you creating? Now if they said they were going to create 12 to 20 new gas stations and give ownership to the African-Americans or the Mexican/Latinos-- now you’re doing something. If there is no ownership in that area, they’re going to burn them down again.
