The US economy is floundering as others rebound quickly. We’re struggling just to return to where we were a few months ago. But is that enough?
Of course not. Recovery isn’t sufficient. We have to reimagine. This COVID-induced catastrophe presents an opportunity for a stronger, fairer, and more prosperous America. We can speed the process of regrowth in the short term and rebirth in the future by turning the economic potential of an underestimated, overlooked group of Americans into economic activity.
That group is Latinas.
Helen Torres, CEO of HOPE (Hispanas Organized for Political Equality) argues that their new study shows that female Hispanics are uniquely positioned to power the engine of economic growth and create a more vibrant, prosperous America.
To date, Latinas have been excluded from full participation in our financial system, with fewer opportunities to invest and to save; fewer assets that drive wealth creation like homes, inheritances, retirement accounts and stocks; and less basic financial education. This constrains their growth and limits their potential.
Unleashing that potential will rebuild our faltering middle class, provide disproportionately large economic returns in the near term and the future, and help to eliminate the racial and class tensions that poison our current conversation.
This isn’t a social-justice argument (though I could certainly make one.) This is about numbers. Latinas will drive economic growth for a number of reasons.
There are a lot of us.
Latinas are about 9% of the population, rising to over 13% by 2060. We are the largest growth cohort in the U.S., so any improvement in our economic condition produces large improvements for everyone in our country.
We are young.
The median age of US-born Latinas is 19 compared to 45 for White women. So we’re able to take more risks, aim higher, and our economic contributions will continue to grow longer into the future. Supporting Latinas now will produce the best results — the longer we wait, the less impact we’ll have.
We are entrepreneurial.
Latinas opened 2.3 million new firms nationwide between 2014 and 2019. That’s 18% of all women-owned businesses in that period. We also grow quickly: we increased employee headcount by 30% in that period, so we’re creating lots of new jobs. Supporting the transition from microbusinesses to larger enterprises will increase economic activity and create even more jobs.
We have a large gap between actual and potential performance.
Latinas currently earn about 54 cents for every white male dollar — the least of any demographic. This is deplorable. But it also means that every dollar deployed to a Latina goes almost twice as far. In the short term, investing in Latinas is cost-effective and produces greater lift. In the long term, as Latinas approach pay parity — and we must — we’ll generate more revenue, more taxes, more spending and more saving.
We have the power of the purse.
Latinas control 75% of household and discretionary spending in Latino homes. Given that by 2024 Hispanic buying power will be a projected $2.34 trillion, the benefits of financial education and access to investment resources are obvious.
Long story short, empowering Latinas economically is how we’re going to grow the economy more quickly and build a new way forward. Small investments in each of three categories will produce large returns for all Americans.
Here are the actions we should take.
- Require Latina-specific student aid from Federal and State governments. More Pell Grants, more Work Study programs, less discrimination in providing them.
- Deploy Reach-and-Teach programs to proactively provide culturally-relevant Financial Basics education. Push the info out to Latinas, don’t make them come find it.
- Develop community support. Create Latina-to-Latina peer networks for financial tutoring, mentoring and advice.
- Create Latina-specific Federal microloans and direct grants.
- Fund studies through Q2 2021 on the Latina Pay Gap, then start fixing it in Q3.
- Pressure banks to make more microloans to more Latina businesses.
- Demand more local and state support for organizations that provide grants and loans to Latina microbusinesses.
- Mandate fair access for all to bank accounts and investment vehicles.
- Organize social campaigns to pressure companies to sign the “Equal Pay Pledge.”
- Finally fix healthcare. Everyone benefits from this, but freeing Latinas in particular from these expenses allows them to reinvest the savings in economic growth.
Empowering Latinas to propel themselves to greater economic achievement propels us all. We’ve got a lot of work to do. Let’s get to it.
Beatríz is a three-time Emmy award-winning producer, community builder, entrepreneur and philanthropist. At SUMA Wealth, she’s promoting financial inclusion by engaging, educating and empowering US millennial Latinos to close the wealth gap. Her previous startup mitú continues to be the leading digital media brand for that audience. Beatríz sits on numerous boards and advisory boards lending her unique cultural insights to The LA2028 Olympics, Annenberg Foundation’s PledgeLA, Delta Airlines, The Latino Community Foundation, Homeboy Industries, 9th Wonder, Latino Donor Collaborative, LA Collab, Pocketwatch and Encantos Media. She is an advisor to the Mayor of Los Angeles, Eric Garcetti, as part of his Tech Council, and recently featured in Inc’s Top 100 Women Entrepreneurs of 2020 list, and Ellevest’s 14 Latinx Women+ Disrupting Money and Fighting for Equality.
This is an opinion column. The thoughts expressed are those of the author(s).
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