Economic Experiences of Hispanics and Latinos/Latinas
From September 15 through October 15, LSS Financial Counseling celebrates Hispanic Heritage Month and the contributions and achievements of Hispanic and Latino/a Americans. We also recognize their resilience, strength and optimism in the face of difficulties; the financial challenges they face; and our commitment to provide them information and support to meet those challenges.
The economic success of Hispanic and Latino/a communities is essential to their financial health and the overall financial health of the United States. An analyst for the Federal Reserve Bank of St. Louis stated, “Hispanic financial health is critical for the current and future economy.”
Hispanic and Latino/a Americans are a significant presence in this nation:
- 18.5% of the population is Hispanic or Latino/a.
- They make up the largest minority group in the United States.
- Their population growth is second behind Asian Americans.
- More than two million are entrepreneurs.
- They are a substantial economic force. In 2017, they possessed $780.7 billion in buying power after taxes and $1 trillion in total household income.
The economic experiences of Hispanics and Latinos/as illustrate their hopeful outlook as well as the struggles that some face in achieving and maintaining financial wellness.
Ongoing Financial Challenges
While Hispanic and Latino/a Americans are from a variety of cultures and backgrounds, many face similar financial challenges.
- Families with lower income are significantly unbanked or underbanked and face expensive fees to cash checks or access credit.
- 2019 data indicated that fewer than half of Hispanics and Latinos/as say they would pay for a $400 emergency expense with cash. This is a nationwide struggle, affecting all communities of color, existing well before the pandemic. Having savings for emergencies is important to increase the ability to recover from a loss of a job or unexpected expenses.
- A persistent wealth gap exists between non-Hispanic white and Hispanic/Latino/a households and has changed little over the past three decades.
Economic Impacts of the Pandemic
The pandemic has negatively affected Hispanic and Latino/a Americans’ employment and reduced their ability to meet basic needs, according to a Federal Reserve Bank of St. Louis analysis.
- In April 2020, they had the highest unemployment rate of any racial or ethnic group. While it has slowly improved, it has yet to return to the pre-pandemic rate.
- Half have reported someone close to them has died or has been hospitalized from COVID-19.
- Twenty-one percent of renters and eleven percent of homeowners were not current on their rent/mortgage payments.
- About 30% have reported having trouble paying bills and received help from a food bank, according to a recent Pew Research survey.
- The Pew Research survey also found that members of these communities were more likely to experience economic hardship if they worked in a job that required frequent contact with others.
Resiliency and Optimism About the Future
While the pandemic has created personal and financial losses in their lives, Hispanic and Latino/a Americans continue to show resiliency and strength and express optimism about their lives.
- The Pew Research survey mentioned above revealed that Hispanics and Latinos/as are “upbeat about the future.”
- More than 60% believe that the worst is behind them and that they expect their financial situation to improve over the coming year.
- A majority (58%) stated they have helped relatives or close friends in several ways – by delivering groceries, running errands or caring for children. We respect and celebrate the ways these communities lean on each other, especially during hard times.
LSS Financial Counseling is committed to supporting Hispanic and Latino/a Americans’ financial wellness and increasing their optimism and confidence about their financial future. Our trusted, nonjudgmental financial counselors are available for appointments in English and Spanish. They will work with you on budget solutions that fit your needs, start you on a path to saving, develop plans to manage debt, and prepare you for homeownership. Online, phone and video counseling are available to fit your schedule. Call 888.577.2227 for a free, confidential appointment, or get all your support online.
The following individuals co-authored this article. All are Certified Financial Counselors with LSS Financial Counseling.