Latinas among hardest hit by Great Recession

150 150 Alexandra Bjerg

Latinas of California have been hit hard by the economic downturn. 

If demography is destiny, California’s future economic prosperity is undoubtedly tied to Latino economic success.

The California Department of Finance estimates that by early 2014 Hispanics will become the state’s largest ethnic group for the first time since California joined the union in 1850.

By 2030 Hispanics will make up the largest share of California’s workforce. With 9.6 million Latinos projected to be between the prime working ages of 25-64, the future health of our economy hinges on on how well prepared Hispanics will be to compete and succeed in the emerging knowledge-based economy of tomorrow.

California’s changing demographics have clearly increased Latino political clout, but has Latino economic power also grown? In honor of Women’s History Month, let’s take a look at how Latinas in the Golden State are faring economically.

The economic downturn impacted people across all ethnic groups, but Hispanic women are among the most disproportionately affected. How well Latinas recover from the recession has major economic implications for California.

A new report released by the Hispanas Organized for Political Equality (HOPE), a nonpartisan organization dedicated to the political and economic advancement of Latinas, analyzes how Latinas in California have weathered through the financial crisis. 

“To help us understand how best to participate in the shaping of new economic policy,” explained Helen Torres, executive director of HOPE, “it was important to first understand the impact the Great Recession had on Latinas and their families.”

Throughout the recession, the unemployment rate for Latinas has been at least 2 percent higher than the state average. The annual unemployment rate for Latinas in 2012 was 13.5 percent compared to 10.4 percent for the entire state.

Hispanic women that have found or maintained full-time employment have also suffered. In 2011, according to the report, Latinas in California earned just 45 cents for every dollar earned by a white, non-Hispanic man. Non-Hispanic women earned 77 cents.

Wage gaps have long-term consequences on economic security, lowing total lifetime earnings and sapping savings and social security benefits.

High unemployment and a wide wage gap help explain why at the height of the recession more than one in three Latinas in California, 34 percent to be exact–more than double the national average–lived in poverty compared to just 14 percent of non-Hispanic women.

But in spite of these hardships, Latinas are starting businesses at a rate 6 times the national average. Latina entrepreneurship is emerging as a bright spot in an otherwise lackluster recovery.

As Latinas are beginning to flex their entrepreneurial muscle, the report argues an increase in technical assistance and access to capital will ensure Latina-owned small businesses thrive. 

“Latinas are business owners, homeowners, and community leaders,” said Congresswoman Lucille Roybal-Allard (D-Calif.). “They represent an essential part of the ongoing economic recovery in California and across the United States.”

California faces a shortage of one million workers with bachelor’s degrees by 2025. Although college enrollment among Hispanics is on the rise, only 7 percent of California Latinos older than 25 are college educated. The report recommends investing in educational opportunities for Latinos through additional grants for students pursuing degrees in Science, Technology, Engineering and Math as well as increased job training for low-income earners.

Although there is a strong correlation between educational achievement and economic success, the report urges a reduction in the wage gap to ensure Latinas receive equal pay for equal work. Attaining a university degree will not necessarily guarantee pay equity for women.

A well-educated and well-paid workforce is vital to the strength of any economy. As Hispanics make up an increasingly larger share of the labor force in California, it is critical Latinos acquire the skills and education required to fuel sustainable economic growth. Promoting opportunities for upward mobility among Hispanics is key to ensuring California’s future economic health and prosperity.


Alexandra Bjerg

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