Latina-Owned Businesses Are Taking Over the U.S. Economy — And We Have Receipts
As time passes, Latinas are better versed in concepts such as generational wealth and wage gaps. This knowledge, and our resilient and hardworking spirit, is a multi-billion dollar combination.
Or so the numbers seem to show.
There are about two million Latina-owned businesses in the United States, a growth of more than 87% since 2007.
As The 19th reported, Latinas created businesses at six times the rate of all other groups before the pandemic. This included white men and Latinos.
That trend has continued, and strongly.
A matter of Latina resilience
We have previously discussed the wage gap Latinas face in the United States. According to the most recent Census data, Latinas earn only 52 cents for every dollar earned by white men. This represents the largest wage gap between men and women of any group.
In addition to the apparent gender disparity in industries, this is also due to the overrepresentation of Latinas in the lowest-paying and most unstable jobs in the country.
According to the Economic Policy Institute, about one-third of the service sector comprises Latinas. This field faced the greatest job loss at the beginning of the pandemic.
During the worst months of COVID-19, unemployment among Latinas reached 20.2%, the third-highest rate ever recorded in a single month.
However, the resilience of our community turned the tide.
Latinas are the strongest entrepreneurial force in the country
Latinas have always been the masters of the side hustle before it was a thing.
We are often mothers and caretakers of older family members. We are the ones who run the household, have a 9-to-5 job, and several side hustles that are often born out of our passions and always out of necessity.
According to White House figures, about 20% more Latinas are opening businesses now than before the pandemic.
Today, Latinas own about 30% of Latino-owned businesses with employees.
“Entrepreneurship is a powerful pathway toward building wealth, strengthening communities, and Latinas — and Latinos in general — are highly entrepreneurial, and they have been for the past ten years,” Isabella Casillas Guzman, the administrator of the Small Business Administration (SBA), told The 19th. “It’s become the chosen pathway, I believe.”
Despite the obstacles, Latina-owned businesses are thriving
One of the biggest roadblocks Latinas face when starting a business is access to financing.
However, Latina entrepreneurs are the least likely to use bank loans to get their businesses off the ground, according to an analysis by McKinsey & Company.
In fact, recent figures showed that 58% of Latina entrepreneurs seeking capital turn to family and friends for investment.
And when they do get bank loans, they are less likely than white entrepreneurs to get the total amount they request, McKinsey found.
This is particularly acute considering that Latinas have far less cash on hand to survive beyond six months compared to Latino men, according to the Stanford Latino Entrepreneurship Initiative.
However, about 17.9% of Latinas run their own business while still being the head of the household.
Despite any obstacle, Latina-owned businesses generate over $380 billion in revenues. This implies the creation of jobs and a significant impact on the country’s economic development.
The latest figures show that Latina entrepreneurs create businesses 50 times more than the national average. Similarly, these entrepreneurs control 44% of all U.S. Latino businesses.
In short, despite the challenges, Latinas are the economic potential of the future.
