July 9, 2005


Embracing Illegals: Companies are getting hooked on the buying power of 11 million undocumented immigrants ( Brian Grow, with Adrienne Carter and Roger O. Crockett in Chicago and Geri Smith in Mexico City, 7/18/05, Business Week)

Inez and Antonio Valenzuela are a marketer's dream. Young, upwardly mobile, and ready to spend on their growing family, the Los Angeles couple in many ways reflects the 42 million Hispanics in the U.S. Age 30 and 29, respectively, with two daughters, Esmeralda, 8, and Maria Luisa, 2 months, the duo puts in long hours, working 4 p.m. to 2 a.m., six days a week, at their bustling streetside taco trailer. From a small sidewalk stand less than two years ago, they built the business into a hot destination for hungry commuters. The Valenzuelas (not their real name) bring in revenue well above the U.S. household average of $43,000, making them a solidly middle-class family that any U.S. consumer-products company would love to reach.

But Inez and Antonio aren't your typical American consumers. They're undocumented immigrants who live and work in the U.S. illegally. When the couple, along with Esmeralda, crossed the Mexican border five years ago, they had little money, no jobs, and lacked basic documents such as Social Security numbers. Guided by friends and family, the couple soon discovered how to navigate the increasingly above-ground world of illegal residency. At the local Mexican consulate, the Valenzuelas each signed up for an identification card known as a matrícula consular, for which more than half the applicants are undocumented immigrants, according to the Pew Hispanic center, a Washington think tank. Scores of financial institutions now accept it for bank accounts, credit cards, and car loans. Next, they applied to the Internal Revenue Service for individual tax identification numbers (ITINS), allowing them to pay taxes like any U.S. citizen -- and thereby to eventually get a home mortgage.

Today, companies large and small eagerly cater to the Valenzuelas -- regardless of their status. In 2003 they paid $11,000 for a used Ford Motor Co. van plus $70,000 more for a gleaming new 30-foot trailer that now serves as headquarters and kitchen for their restaurant. A local car dealer gave them a loan for the van based only on Antonio's matrícula card and his Mexican driver's license. Verizon Communications Inc. also accepted his matrícula when he signed up for cell-phone service. So did a Wells Fargo & Co. (WFC ) branch in the predominantly Hispanic neighborhood in northeast Los Angeles where they live. Having a bank account allows them to pay bills by check and build up their savings. Their goal: to trade up from a one-bedroom rental to their own home. Eventually, they also hope to expand their business by buying several more trailers. Matrícula holders like the Valenzuelas are "bringing us all the money that has been under the mattress," says Wells Fargo branch manager Steven Contreraz.

Growth engine
For more than two decades, America's illegal aliens have been the target of national attention -- largely for negative reasons. Their growing numbers put downward pressure on U.S. wages and new demands on schools, hospitals, and other public services. Fears of heavier social burdens and higher tax bills have led citizens and local officials to object with renewed vigor to what many perceive as an unwanted invasion from Mexico and other countries, especially to newer destination states such as Alabama, Georgia, North Carolina, and Tennessee (BW, July 4, 2005). Yet all the while, farms, hotels, restaurants, small manufacturers, and other employers have continued to hire the undocumented with little regard to the federal laws intended to stop them.

At the same time, though, the fast-growing undocumented population is coming to be seen as an untapped engine of growth. In the past several years, big U.S. consumer companies -- banks, insurers, mortgage lenders, credit-card outfits, phone carriers, and others -- have decided that a market of 11 million or so potential customers is simply too big to ignore. It may be against the law for the Valenzuelas to be in the U.S. or for an employer to hire them, but there's nothing illegal about selling to them.

So with a wary eye on the heated political debate, business is targeting the Valenzuelas and millions of others who have entered the country illegally.

Patricia Moo Garnaas sent a link to a similar story from the WSJ, that you can access if you're a subscriber: Welcome Mat: Banks Open Doors To New Customers: Illegal Immigrants

Posted by Orrin Judd at July 9, 2005 12:12 PM

Your argument appears to be that if one contributes to the economy one can break laws of one's choosing. I contribute to the economy, therefore I have decided I am no longer obeying regulations on where I can smoke. My smoking in non-smoking areas is a small price for society to pay for my positive contribution to the economy (unlike illegal aliens, who, as a whole, cost the economy more than they contribute to it).

Posted by: carter at July 9, 2005 2:17 PM


Yes, immigrating illegal is a social good. Smoking a social evil. By all means deport the ones who smoke.

Posted by: oj at July 9, 2005 4:44 PM

You can't deport anyone for anything, including the illegal aliens who actually are beneficial, like the ones who operate cigarette smuggling rings.

Posted by: carter at July 9, 2005 10:56 PM

Seems easy enough to deport the ones we suspect of terrorism.

Posted by: oj at July 9, 2005 11:06 PM