Katia Chesnok is a Latina money expert and coach and the founder and content creator of Economikat, a personal finance educational platform. She educates Latinx on all things money and empowers them to earn more, save more, side hustle and start investing to build wealth.
As Latinas, and especially as first-gen Latinas, we were not taught financial planning from our parents because most of the time they didn’t know how to do it themselves. Latinas face many barriers to economic opportunities, like systemic and historic discrimination, generations of inequity and wealth gaps, and a lack of access to resources on financial literacy to name a few. Here are some of the major barriers we face and what we can do to combat them.
The Pay Gap
Women get paid less than men for the same job for many reasons including discrimination and the lack of opportunities in higher paying jobs. Women who work full-time, year-round get paid 82 cents compared to $1 a white man gets paid. Latinas, on the other hand — also working full-time year-round — typically earn only 57 cents for every dollar earned by white non-Latino men. As noted by Equal Pay Today, a campaign being led by a coalition of organizations to close the gender wage gap, at the current pace, Latinas will have to wait 185 years to earn the same pay as white men.
What can be done to close the pay gap for Latinas?
— Be aware of this situation and create awareness through your social media or conversations with friends/family
— Proactively ask candidates running for office about their plan to close the gender and racial pay gap.
— Keep a list of all your achievements in your current job/position and negotiate your salary.
— Check your industry salary range by going to websites like Payscale and Glassdoor.
— Start investing now. Ownership is so important…we can own businesses, real estate, stocks, etc. and build wealth that way.
Lack of opportunities for high-paying jobs
It’s harder for Latinas to find a job that offers higher salaries and benefits including retirement-sponsored plans such as a 401k. Latinx workers have substantially lower-paying jobs than white workers. We usually earn lower salaries, are less likely to have health insurance, and have no retirement benefits through our jobs. Because of this, we tend to have higher unemployment rates and shorter time with employers thus we tend to get less access to the full benefits a job can offer.
Latinas have also had higher unemployment rates compared to white women even before the start of the pandemic and, early in the pandemic, Latinas experienced the highest unemployment rate of all demographic groups. The pandemic only exacerbated this reality. A report released by the UCLA Latino Policy and Politics Initiative in June noted that Latinas dropped out of the workforce to a larger extent than any other demographic group during the first year of the pandemic. One of the main drivers of this exodus was the disproportionate share of unpaid caregiving work shouldered by Latinas that increased significantly with the closures of schools and daycare settings.
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The Wealth Gap
There is a higher wealth gap for Latinxs compared to white men and women. Unfortunately, most of the advice we get as women regarding finance revolves around saving money, couponing, and living a frugal life but rarely do we see investing or wealth-building advice geared towards women. Latinas have one of the highest life expectancies in the U.S., second to Asian American women, thus understanding their retirement can lessen the financial burdens we could face as we near retirement age.
Most of us are also in charge of helping our parents and are the ones helping them buy a house: Nearly three-quarters (72 percent) of millennial Latinxs provide financial support to their family, according to Bank of America’s Better Money Habits. These familial responsibilities tend to tie up an individual’s income, decreasing their ability to save and invest for long-term goals like retirement.
In order to close the wealth gap, after not having enough representation in personal finance, now we are carving a space for ourselves in the industry and improving financial literacy for our community. We need access to this vital information, which should be a required subject at all schools. We have achieved so much, but still, we have to achieve so much more. With access to information, financial education, equal pay for equal work we will build generational wealth for us and our families.