Speech to The Tomas Rivera Center Dinner, Los Angeles, June 27, 1996

Thank you very much for the opportunity to speak before you today. I very much appreciate that you have asked me to discuss my perspective on the role of Latinos -- and particularly Mexican-Americans -- on the future, particularly in the southwestern United States.

In essence, the real debate today is whether multi-racial , increasingly Latino communities such as Los Angeles have any real future, other than as settings for sci-fi dystopias. The real debate is really about the future for a recreated America in the 21st century.

This is a future that will no longer be written in black and white, but in colors, most particularly brown and yellow. It is future that is being conceived first in regions such as Los Angeles, where roughly two-fifths of the population is already Latino and one-tenth Asian, where immigrants, in particularly, are transforming the cultural, economic and social landscape at breathtaking speed.

What we do in cities like Los Angeles, as well as multi-racial communities such as San Antonio, Houston, Chicago and New York will say a great deal about whether this recreated America will usher forth a new, great creative resurgence of the nation or lead to a stunning fragmentation that will see the anglo populations drift ever more to the suburban fringes and the lily-white hinterlands.

More than any group, Latinos will be the ones who will determine which future we will face. Last year, for example, the growth in the Latino population nationwide --- in absolute terms --- was greater than that for the entire Anglo population. As a younger and more fertile group ---the median age for Mexican-Americans is more than ten below that for anglos-- this pattern of Latino predominance is certain to grow, particularly in the southwestern United States.

Here's a look at the Latino future by the year 2020. By then there will an arc of states and regions that will be predominately Latino in nature, particularly in terms of young people. According to the University of Michigan population studies center, the Latino portion of the population under 17 in the year 2020 will reach 20 percent in New York, 26 percent in Florida , 29 percent in Colorado, 39 percent in Nevada, 46 percent here in California, 49 in Arizona and 52 percent in Texas. New Mexico, by the way, will be ever more like old Mexico, with 73 percent of its young people being Latino. In all these states, Latinos will outnumber African Americans; in many, they will also outnumber whites.

At the same time the other great dynamic population --- Asians --- will be ascending as well. Last year Asian population growth expanded at two and half times that of African-Americans. By 2020 Asian youths will make up 42% of Hawaii's young people and twenty percent here in California. Particularly in the southwest, America clearly will certainly no longer be a nation of black and white, but in colors.

Now the real question is then what does it mean --- particularly for cities that will be the focal points of this new multi-racial reality. To me again the key question is what will be people with skills do? Where is capital --- both domestic and international --- going to flow?

I raise this issue because, in reality, this is very issue which occupies businesses, families and institutions as they decide whether to stay and invest in this region or chose to escape to the seemingly, safe secure confines of the edge cities and distant Valhallas. The most multiracial centers, such as Los Angeles, are essentially in a severe competition with other regions for capital, investments and skilled workers to the area.

Capital, for example, could decide to do with multi-colored America what it has long --- and has continued --- to do when faced the dysfunctionality of predominately poor minority cities as Detroit, New Orleans, even the city of Atlanta --- choose to put their money in other regions or place the bulk of their investments in the suburban fringes, away from the minority urban cores. And in a globalized economy, they have many choices, not only in North America, but elsewhere, particularly east Asia, parts of eastern Europe and Latin America --- that may provide more lucrative venues.

Some may call such decision making racist and socially irresponsible, but it is also, rational. Why invest in a crime-ridden city with dysfunctional schools, where the political costs of doing anything are far greater in the peripheral areas and the media is almost always hostile towards business.

Now there are many --- particularly within academia, the media and the political class --- who say this is not the real issue. They insist on focusing on such things as redressing racial wrongs, redistributing wealth through government programs, that cities most appeal --- on moral-political grounds --- for assistance in meeting their fundamental challenges.

Although this makes for good copy and pleases the intellectual classes and the media, such an approach simply reflects nothing more than a kind of virtual unreality --- good for newspapers and posturing but without any real chance of actually improving conditions on the ground.

For one thing, political power in Congress has shifted from the urban core and there is little, I would say virtually no way, to expect the federal or state governments to dedicate themselves primarily to the task of bailing out failing cities.

Even a democratic resurgence in November will not significantly change this picture. Given the budget deficit and the current high rate of taxation , the age of big government spending, even Bill Clinton knows, is over this means, inevitably, more and more power to determine the future of multicolored urban communities will lie with private investors, as well as the firms, communities and individuals in those areas. Fundamentally, the challenge for the emerging multicolored, Latino oriented region then is the challenge of an economy that employs its diversity to capture unique market niches in the emerging world economy. Without building that strong, multi-racial economic base there can be no real way to deal with the issues of education, investment and maintaining the urban infrastructure.

Many on both Right and Left say such multi-racial regions are incapable of being competitive. This notion is widely supported both on the Right and Left.

On the Left we have usual masters of victimology whose view of immigrants and minorities is that they are always victims, rarely able to make it in this country through the application of such fundamental values as family, work, faith and community.

"In this view, Los Angeles," as Mike Davis puts it, "is a little more than Ichiapas with freeways." And the 1992 riots were a "rebellion" that is uniquely a product of this region's fundamental evil --- and something that we can look forward to again if maximalist demands are not met.

Ironically, this view of the multiracial metropolis dovetails with those on the right, such as George Gilder, who maintain that the great multiracial cities have become 'the leftover baggage' of the industrial age --- stinking , dysfunctional areas full of what the left calls victims and the right sees as victimizers.

Such attitudes about immigrants and Latinos is precisely what breeds such obscenities as proposition 187. If a population is called largely dysfunctional --- even by many of its advocates --- than it stands to reason the existing majority will feel little reason to welcome its presence, much less expansion.

Between these two negative views of the multi-racial metropolis, I would posit a third alternative. Cities such as Los Angeles, Houston, San Antonio, San Francisco and others have a unique opportunity in the world economy today. With their pooling of talents, the commingling of sensibilities, they can create a new cosmopolitan, mixed race economy that can develop a new paradigm for global economic, technological and cultural development.

The Latino community will be a critical, the critical player, in developing this new paradigm. It is nothing less than has an opportunity to truly help fashion a modern version of what earlier cities throughout history have done. From the days of Alexandria and early Islamic Baghdad, to Kaifeng at its height, to the Renaissance of Venice, and later Amsterdam and London, diverging populations have made such cities crossroads of the emerging global economy. As the great french historian Fernand Braudel, writing about the low countries, once observed: commerce flourishes best where the spirit of tolerance convenes.

Recent economic trends show that this can indeed be done. Over the past five years, heavily Latino states such as Texas and Arizona have led the way in economic growth. After the horrendous disaster-laden years of the early 1990s, California has also begun to reassert its economic and technology preeminence, creating over 600,000 jobs over the past two and half years. Even the Los Angeles area, considered the heart of darkness by both radicals and nativists, is now experiencing job growth at 50% faster rate than the nation. Last year the region added roughly 150,000 new jobs --- nearly 90,000 here in Los Angeles county.

A close look at this economic recovery reveals its essential global and multi-racial character. First and foremost has been the growing role of international trade, particularly with the pacific rim. Today California's economy is nearly 25% dependent --- a full quarter above the national average --- and that sector, is now growing twice as fast as the rest of the state economy. The economic impacts of this trade have been enormous, helping to produce as many as 300,000 jobs in the region since 1990.

Much the same process has taken place in two other key Latino oriented cities, Miami and Houston. Miami's Latino population has helped forge a new role for a city many thought was dying. In 1994 the Miami area accounted for nearly one quarter of all US trade with South America, including nearly two-fifths of all exports. Miami also accounts with two-fifths of all US trade with the Caribbean and almost 60% of all US trade with Central America. Throughout the 1990s Miami's trade has been headed upwards, usually a double digits annually, with Latin America countries such as Brazil, Columbia, Argentina, Venezuela, the Dominican Republic as the top five export destinations.

Simply put, Latino workers, entrepreneurs and government officials have helped turn a once sleepy tourist town into a major global provider of goods and services. Since 1984, for example, Miami International Airport has nearly doubled the number of foreign passengers AND accounts for a remarkable seventy percent of all air cargo transport to and from Latin America and the Caribbean.

Like Miami, Houston has been largely saved from economic extinction by a trade economy that , now accounts for roughly ten percent of regional employment. Since 1986, tonnage through the 25 mile long Port of Houston has grown by a full one-third, helping the city recover the jobs lost during the 'oil bust' of the early 1980s.

One critical factor behind Houston's resurgence is its heavily Latino, diverse population base. Like Los Angeles, the Texas city is a sprawling, sometimes seething melting pot of contrasting ethnic groups; nearly one quarter of the population in Hispanic and as much as another 8% Asian, up 139% in the 1980s alone. This polyglot mixture plays an important role in developing clients and contacts for exporters.

For these new multiracial, increasingly Latino dominated cities global ties --- accentuated and improved by immigrants --- is critical source of new, good paying jobs. Since 1986, according the US Department of Commerce estimates, the percentage of jobs supported by exports has grown from 7.6 percent to 10.9 percent. Equally important, jobs tied to exports pay an average of 13% higher salaries than those aimed at domestic customers.

But trade is only part of what the new immigrants and emerging multiracial character brings to these new Latino-oriented regions. The newcomers --- Asian, Latino, Middle Eastern --- represent a healthier population, even adjusted for age, than the national norm. Nearly 35% of foreign born households fit the 'traditional American family' --- mom, dad and kids --- compared to only 25% of us-born household. Ozzie and Harriet are alive and well in America, except their names are now Estaban and Ofelia.

This pattern is also true in Los Angeles. Latinos here --- as David Hayes Bautista and Gregory Rodriguez has pointed out --- boast more stable family environments, higher rates of labor participation, and lower AFDC dependence than any major racial group. They even live longer, which baffles me because if I ate that diet, with my Eastern Europe genes, I'd already be dead.

Critically Latinos, more specifically Mexicans and Central Americans , also boast higher rates of labor participation and are far less likely to be on AFDC than the general population.

Your community should take pride in the ethics of work, family and faith. And explain to a skeptical anglo business world that the Mexican-American community is increasingly critical --- as workers, entrepreneurs, customers --- in building the economy not only here in Los Angeles, but throughout California, in Texas and elsewhere.

Just look at real estate. Unlike the 1980s where it was said that a chimpanzee could make money in real estate --- and many did --- the new leaders may be firms like California capital, a Latino real estate firm company based in Ontario, which in the tough times of the early 1980s saw their loans rise from 12.3 million to 51 million last year.

Such minority owned firms are critical to the future of our economy. Southern California leads the nation in women, Latino, Asian and African-American owned enterprises.

In recent years the growth of these minority business, particularly Asian and Latino, has been spectacular. Over the past decade in Los Angeles alone the number of Latino and Asian-owned have more than tripled. Over the past two decades Latino owned firms have enjoyed a 700% percent increase , three times the overall Latino population growth rate.

Ultimately this entrepreneurial and home-buying activity suggests something that, in an upcoming report now being written by Gregory Rodriguez for the Pepperdine Institute for Public Policy, is creating something very exciting and until now virtually unstudied: a burgeoning Latino middle class. Although poverty is certainly part of the picture, so is upwardly mobility. Nearly half of the us-born Latinos in Los Angeles, for example, earn over $35,000 annually --- compared to 36% for African Americans. And each decade in this country brings an ever larger group of Latinos here into the middle class.

This middle class is not emerging against the American grain or in opposition to the already existing capitalist system but are redefining it. In other fields such as garments and textiles, which do pay generally lower wages but also offer upward mobility for immigrants and their children. Los Angeles County, for example, now has the nation's largest garment industry, with nearly 11,000 more workers than second place New York and nine times as many as third place Miami. Since 1988 the industry's sales have expanded from roughly $5.6 billion in 1988 to over $9 billion in 1993.

Increasingly, these firms depend on a combination of factors: immigrant entrepreneurship, access to motivated immigrant labor and the kind of stylishness that has made California a trend-setter around the world.

Left-wing academics like to see only the abusive conditions in sweatshops or lack of unions. But these jobs are critical to the economy and are part of the first, admittedly difficult rungs towards ascending into the middle class.

Critically, I do not think the children of immigrant workers will be relegated to the sewing shops. My own grandmother was a sweatshop worker, my own mother sewed buttons in a Brownsville, New York tenement as a child. Yet in the next generation my cousins and uncles became managers, entrepreneurs and professionals.

This same process is taking place today --- too slowly perhaps, but that is how most great historical transformations unfold. Today the majority of students at the Fashion Institute in LA are Asian or Latino; the new hot companies in the apparel business in LA are largely Asian --- even the surfer look is largely produced by Chinese owned companies such as Bugle Boy or PCH.

Even in Hollywood this diversity is increasingly evident and critical. Film Roman and the Garfield, Simpson...You have the typical anglo dysfunctional family drawn by a heavily African-American, Latino and Asian work force, run by a Mexican-american who grew up in Fresno.

In the future this cultural influence, particularly from Asia and Latin America, will be critical to maintaining Hollywood's cutting edge. There is too much rich material East of La Cienega as well as growing markets that even the most imbecilic Hollywood types can not ignore.

Indeed throughout economic history, the migrations of work-oriented peoples have been critical to economic success and transformation of regions. I should remind you that at the turn of the century they were widely seen --- like today's immigrants --- as hopeless drain, indeed eighty percent were described as feeble-minded.

Yet when the Jews migrated they brought critical skills and work ethics to such as New York; Thomas Sowell once pointed out that economist noted the Jews were lucky to get to New York when the garment industry was about to begin. He compared that to saying that Hank Aaron was lucky to come up to the plate when a home run was about to be hit. Much the same can be said of the confluence of Jewish immigration to Los Angeles and the region's emergence as the world film capital.

Today immigration in Los Angeles, Houston, Miami, San Antonio ---indeed the entire archipelago of Latino- oriented cities has the similar potential to benefit from the work ethic and values of a new generation of newcomers. The key issue in the future will be whether or not we take advantage of our diversity or let it kill us.

In this new multiracial economy getting this message out is critical, and not only for Latinos. As long as Latinos are identified with dysfunction, which seems to be essential view of the local media, business will continue to flee; investors and middle class residents will lose faith with the promise of a multi-racial society. You end up, once again, with a Spanish speaking Detroit.

So what should be the strategy for the Latino communities? One critical element will be not to become engaged too heavily in the victimization strategy or to rely on governmental assistance, particularly from an increasingly ineffective and broke federal level. In this sense, Latinos are fortunate to be largely outside the governmental sector --- in California only 10% of Latinos work for government compared to nearly 27% for blacks.

The African American community's reliance on the government, particularly the federal government, is of a reasonable product of their own unique history and position in this society. But the Latino situation is different. You are not a permanent minority brought here against your will: you are, in the southwest at least, an emerging plurality or even majority made up predominately of people who came here of their own volition --- more like my own Russian forebears than the descendants of slaves.

Your new demographic preeminence and the decline of the welfare state needs a strategy quite different than that employed by the African American civil rights movement in the 1960s and 1970s.

For one thing changes in the economy have meant that, in terms of the overall population, that strategy has largely failed for a large part of the black community --- particularly in terms of dependence on both the public sector and large corporation just as both are shrinking.

Latinos as our new leading ethnic group need to find a strategy that is more in tune with the current economic realities. Rather than focus on government, for example, it makes more sense to enlarge the role played by Latino entrepreneurs and managers in shaping the community's strategy.

More importantly, with majority comes a responsibility of stewardship for not only each other, but for the society as a whole. Successful integration in these circumstances can not take place in the context of hostility against the prevailing Anglo culture. Promoting racial conflict might help politicians, thrill academics and journalistic voyeurs, but it is a strategy doomed to failure.

Here in Los Angeles for example, our media likes to crow about how we are a hotbed of bad race relations, perhaps the worst in the country. Yet as Gregory Roudriguez and David Hayes Bautista suggest we Angelenos of different backgrounds hate each other so much that our rate of racial intermarriage is five times the national average. One quarter of us-born Latinos here in Los Angeles marry non-Latinos; to me, that reflects the essence of mestizo culture and not a harbinger of race war.

Indeed I would argue that Los Angeles does not have the worst race relations in the country. But it is almost the only city that *has* race relations. If you co-habit, share a workplace or a classroom with other people, sure you will have conflict. But I doubt that totally segregated cities like Atlanta, or residents of Provo, Boise or Vermont can really instruct us in finding a better way.

Rather than stoke fears among anglos and global capital, a more appropriate Latino strategy would be to stress that this community possess values that strengthen our regions, rather than weaken them. Instead there is a need to focus on and opportunities, not only Latinos, but for everyone, in an influx of a population that believes in work, in family and god.

Under those circumstances, then you can make a powerful case for investing in education, in infrastructure because that makes this population more productive . As your most recent report suggests, helping the Latino community becomes not an act of contrition or charity, but a smart investment. As many as three-fifths of Californians, according a recent poll, might support such spending, particularly in education.

Finally, on a political level this means rejecting a philosophy based on racial redress. An emerging majority can not build a workable coalition with others by institutionalizing preferences. There is clearly little enthusiasm --- or just claim --- for immigrants or middle class Latinos to receive preferences in the name of past injustices that occurred when, the vast majority of their families were not even living here.

Finally, as our new preeminent group, whether in Los Angeles, or other cities, Latinos should avoid the suggestion that they want to turn, as Ruben Martinez put it, Los Angeles into another Mexico City or San Diego another Chiapas. It's fun for fashionable intellectuals to dream of a reconquista, but I doubt most Latino immigrants would sign up for that. If they felt that way why bother coming in the first place or sign up in huge numbers to learn English.

Ultimately like other immigrant groups, the Latino ascendancy can only succeed by accentuating its linkage to the fundamental American experience.

This does not mean you should ignore your great heritage --- any more than i would want my daughter to walk away from our Jewish historical, moral and spiritual tradition. Yet rather than seek an "apartness", Mexican tradition should be seen as an additional transformative factor that reinforces the Anglo-Saxon base of the country that, for all its many faults, has created the very political and economic system that still lures so many people from around the world to this county.

I say these things because ultimately the fate of all those of us who live in Los Angeles, or any of the emerging Latino-predominant cities, is tied to choices that Latinos, as individuals, families and communities will make in the next few years.

As a non-Latino in an increasingly Latino Los Angeles, I hope you make the right ones.

Thank you.

Joel Kotkin is a senior fellow with the Pepperdine Institute for Public Policy and the Pacific Research Institute.