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Want economic recovery? Start by supporting the Latina workforce

Beatriz Acevedo of Suma Wealth explains how advancing Latina entrepreneurs is key to closing the largest demographic wage gap and bolstering the economy.
Shot of a young woman using a laptop and  going through paperwork while working from home
Shot of a young woman using a laptop and going through paperwork while working from homemapodile / Getty Images

Latina Equal Pay Day is an observance and call to action that brings awareness to an issue that affects not just Latinas, but the entire American economy.

The Equal Pay Act passed almost 60 years ago, making it illegal to pay anyone less based on their gender or race. Unfortunately this problem persists, but for Hispanic women in particular, the gap only gets wider.

For a Latina to reach pay parity with a white non-Hispanic man, she would need to work past the age of 90 (6 years beyond her life expectancy). This is obviously unrealistic, which means there is no real way for her to ever catch up!

When I first learned about the pay gap, I was shocked. Growing up in Mexico, we had much more pay transparency with published wage scales, so we all knew how much everyone made.

Beatriz Acevdo
Beatriz Acevdo is the CEO of Suma Wealth and serves as president of the Acevedo Foundation.Courtesy Acevedo Foundation

Superstar employees could always qualify for bonuses, but even those had a clear and transparent way of being measured. When I first came to this country, I was surprised at the secrecy around pay. Thirty years later, it’s disappointing to see how little progress we’ve made.

How the Latina pay gap changed

Latinas have the largest pay gap among women, and sadly, it is the widest gap we’ve ever seen. This year it dropped to $.54 cents to the dollar for all Latina workers and $.49 cents for those in full-time jobs.

According to Monica Ramirez, who founded Justice for Migrant Women, she explained that the disparity accounts for all Latinas with reported earnings:

“We set the date for December 8th because per the 2020 census data, that reflected a $.49 cent to $1 dollar gap - we would not have had a day of action for Latinas in 2022, or ‘best case’ per one calculation, it would have been on New Years Eve. We could not let a year go by without acting as a collective, raising awareness and addressing the solutions … 33 million women's experiences overall are accounted for. We did not want to erase the experiences of part-time workers, gig workers, seasonal workers, etc. We also can't appropriately address a problem if we don't understand its scope.”

To address the scope of this problem, we must acknowledge the economic weight that Latinas bear in order to keep the U.S. economy competitive. Before the pandemic, their numbers in the labor force were projected to grow by almost 26 percent, significantly outpacing that of white women.

Unfortunately, this cohort was devastated by the pandemic, not just among deaths but also in economic hardship. According to the National Women’s Law Center, 324,000 Latinas were forced to leave the workforce in September 2020 – almost three times the rate of white women, and more than four times the rate of Black women. Taken together, Latinas are now on track to lose on average $1.2 million in their productive careers, but in states like California, which has the highest Hispanic population, the loss jumps to $1.8 million.

The gap persists despite education level

For some, unconscious bias might suggest this wage gap persists because Latinas only work in low-wage service jobs, but the disparity actually becomes wider among Latinas with bachelor’s and advanced degrees compared to those with a high school diploma.

The same is true even among the highest paid jobs held by Latinas. For example, those who work in legal occupations make on average $66,201 a year compared to their non-Hispanic white male counterparts who earn $156,908 annually for the same job.

While the global pandemic clearly exacerbated this gap, Latinas and their families were hardest hit by a year of record inflation, according to recent estimates from the New York Fed. Their share of income spent on basic goods and services – transportation, housing, food – far outpaced their average income growth.

Closing the gap by building economy, generational wealth

If we consider that potentially 30 million Latinas in this country will each stand to lose $1.2 million in their productive careers as a result of wage inequities, that amounts to $36 trillion in lost economic power.

Now imagine if a third of that went to taxes – that’s approximately $10 trillion that Latinas will not be able to contribute directly to schools, healthcare, parks, social security – measures that would benefit us all.

This massive wage gap also cripples Latinas from the ability to build generational wealth and potentially close the gap entirely. For instance, if Latinas invested the money they are not appropriately getting paid (on average $30K yearly), over the course of 40 years with the average return of the stock market just above 10 percent (S&P 500 index), their $1.2 million could turn into $13.2 million per Latina with compound interest.

But despite the headwinds so many Latinas face, their drive to overcome prevails. They are the primary decision-makers in their homes, they are increasingly more educated, and they are starting businesses at an accelerated rate on minimal capital.

On this day of action, let’s be intentional in supporting their growth. Here’s how:

  • Provide Latina entrepreneurs with access to mentorship and sponsorship to help them advance, beyond capital funding;
  • Connect them with influential contacts that can lead to transformational growth opportunities;
  • In leadership, increase childcare support, introduce mandatory paid family leave and expand the child tax credit to support those with growing families;
  • Encourage them to participate at important tables where decisions are made – conferences, panels, dinners, board rooms – even as observers this is critical for the next generation of Latina leaders to advance.
  • And finally, pay transparency and equal pay for equal work.

If you support equal pay, make your voice heard. Participate in the many live and virtual activations from the U.S. Capital to the United Nations. Even when most women and their allies have been able to make small improvements toward pay equity, we will not have true equity until ALL women are paid the same.