5 Reforms that Can Close the Wealth Gap for Latinas

Latinas suffer the brunt of workforce inequities in the United States and the pandemic has only emphasized that with many suffering disproportionate financial losses

Latinas economic stability — Photo: Pexels/ Vlada Karpovich

July 21, 2021 - 18:50

Latinas suffer the brunt of workforce inequities in the United States and the pandemic has only emphasized that with many suffering disproportionate financial losses. For the nearly 30 million Latinas living in the U.S., financial recovery will be much more challenging because of pre-pandemic structural inequalities, according to a report released earlier this year by UnidosUS, the nation’s largest Latino civil rights and advocacy organization.

The UnidosUS report focuses on structural barriers that have long impacted Latinas economic mobility, while responding to immediate needs where policy and programs can bring about significant relief. UnidosUS is hosting a conference July 26-28 featuring panels with leaders and changemakers to discuss policy changes and reform. Clarissa Martinez, Deputy Vice President of policy and Advocacy at UnidosUS, spoke with HipLatina about the struggles Latinas face ahead of her panel at the conference centered on racial justice. UnidosUS focuses on structural barriers that have long impacted Latinas economic mobility, while responding to immediate needs where policy and programs can bring about significant relief.

“There is no doubt that Latinas have increasingly become a central pillar of our economy. Yet despite being such essential contributors, Latinas continue to fall behind in wealth-building and overall financial success, and their issues and concerns have too often been invisible. It is in the best interest if the country to address those issues, and doing so will benefit not only Latina workers, for millions of similarly situated women workers in other communities,” she says.

In the report it states that “Economic justice requires a recovery plan and long-term structural reforms that address the systemic economic exclusion of Latinas,” and Martinez breaks down some of those reforms that need to happen.

Ensure our tax system better serves workers

Martinez states one way to do that is to make permanent the Earned Income Tax Credit and the Child Tax Credit, which help low- to moderate-income workers and families get a tax break. To qualify your investment income must be $3,650 or less though starting this year (filing in 2022) that amount increases to $10,000.In 2021, the earned income credit ranges from $1,502 to $6,728 depending on tax-filing status, income and number of children (those without kids can qualify). It’s also important to expand to as many workers as possible by widening the age range, refundability, amounts, and inclusion.

“Wealth is an important component of building the safety net so that Latinas and Hispanic families will be more resilient to future economic downtowns or personal financial disruptions, such as illness or job
loss,” the report stated.

Provide health benefits and paid sick leave

It’s also vital to expand child care and it’s essential to reduce its cost, which can be upwards of $800 a month. Increasing/providing worker benefits, subsidies and access to health care for low-wage and hourly workers, and paid sick and family leave for all workers, and portable retirement accounts. Workers at lower-wage companies pay an average of $7,000 a year family plan — $1,000 more than employees at companies with higher salaried workers, according to the 2019 Kaiser Family Foundation Employer Health Benefits Survey. While the Affordable Care Act (aka Obamacare) has provided more access for BIPOC, Latinos are still nearly 3 times more likely to be uninsured than non-Latino whites.

Provide debt relief

Predatory loans are a major issue afflicting Latinas but students are also in major need of debt relief. More than half of Latinas are extremely or very concerned about medical debt, according to the report, with medical debt surpassing concerns of credit card debt, car loans, or home mortgages. Martinez emphasizes that it’s crucial to prioritize efforts to strengthen enforcement of borrower protections as well as provide more aid to Latino business owners. As of May 2020 only 12 percent of Black- and Latino-owned small businesses had received any of the assistance for which they had applied. Furthermore, 50 percent of Latinos that participated in the report did not receive any of the federal government relief they applied for.

Make economic mobility real

“We must understand there are barriers baked into our systems that make it difficult or impossible for workers to achieve economic stability, even when they work multiple jobs. Factors like redlining, predatory loans, jobs with no upward mobility or benefits, keep families trapped,” Martinez shared. One way to change this is to increase investment in skills training, job placement, and other workforce development programs, especially in the food supply chain, domestic work, child care, health care, and education.

The report also found that Latina-owned businesses suffered at disproportionate rates during the pandemic. Latina entrepreneurship dropped by 30 percent, more than than for Latino men, white women/ men. For small business owners, real access is critical – this means, for starters, ensuring that information on available supports is reaching those most in need, and that application processes are simple to navigate/streamlined.

Make housing affordable and accessible

This can be done by reducing home financing costs, and the housing cost burden for Latino renters to help them save and build assets, according to Martinez. The upside is Latino housing wealth reached nearly $1 trillion in 2019, increasing by 400 percent in a decade due to an increasing number of Latino households
versus an increase in the homeownership rate. However, the share of Latino homeowners lags that of white people, and Latinas have a lower rate of homeownership than Latino men.

Provide a path to citizenship for essential workers

In March of this year members of Congress introduced the Citizenship for Essential Workers Act that would provide a pathway to U.S. citizenship for undocumented essential workers. “They have risked their lives and health serving our communities on the front lines to keep our economy moving,” Martinez says.