Moneda Moves (146): 💰The State of Latinos and Money In 2023
Welcome to the first newsletter of the year, Moneda Moves followers! If you’re new here, welcome. And if you’re returning, it’s been such a pleasure to have you be a part of the community. I look forward to deepening our conversations about money and culture in the new year.
You opened this newsletter likely because you want to learn more about the state of Latinos and money in 2023. That will come below the fold. First, I’ll reintroduce myself and share more about why I’m here and why you’ve come to the right place.
My name is Lyanne Alfaro and I’m a builder and storyteller by trade. Growing up in a working class Latino neighborhood as a daughter to two Mexican immigrant parents, I saw hustle and business owners everywhere: the restaurateurs, owners of panaderias, carnicerias, grocery shop chains all the way to carpentry businesses like my father is. But when it came to talking about money and business, I also saw us absent from the national headlines when I worked in these newsrooms.
I set out to change that. I built my career as a reporter at CNBC, Business Insider and NBC Latino and Nasdaq and doubled down to learn the industry and increase headlines about BIPOC, Latinos and money. Two years ago, I created a media platform to cover these stories — you’re reading it now. This is Moneda Moves.
In this newsletter, podcast and platform I share stories about the Latino leaders, their relationship with money and our cohort's contributions to the American economy. The end goal is to empower first builders of legacy to create generational wealth. You can find us at our Moneda Moves in-depth newsletter biweekly in 2023 and our Instagram or LinkedIn (TikTok to restart this year and YouTube coming soon).
2022 was an incredible year filled with prototyping, better getting to know our audience and doubling down on our mission. In the last year alone, we published dozens of episodes, were one of seven teams around the world chosen for the Google Podcast Creators Program with PRX and named one of the New Most Influential Voices of Money by NextAdvisor in partnership with TIME Magazine. I also wrote for a handful of magazines with national reach about our community wins and money from Huffington Post to TIME via NextAdvisor.
I am so happy to have you here, and eager to cover even more ground in 2023. Vamos! Onto the takeaways for 2023 (h/t to Nicole Casperson’s WTFintech newsletter which inspired us to bring back GIFs today).
Con poder,
Lyanne
The State of Latinos and Money in 2023
The Latino cohort is gaining wealth at a rate that
should notcannot be ignored
You may have heard from reports last year that if the Latino GDP made a country, it would be the fifth largest in the world. And that’s no small deal. According to the Latino Donor Collaborative’s 2022 study, the Latino GDP last collected in 2020 stood at $2.8 trillion. A report by Ipsos notes that growth in wealth is due in part to the size of the Hispanic population in the United States with significant growth among higher earning younger Latines. In other words, 2023 is the year our cohort cannot be ignored.
Despite Latinos’ growth in wealth, they are an underserved market
Simply put: Latinos aren’t that happy with the products they’re buying. Think everything from financial products all the way to beverages and food. That’s according to McKinsey and Company. Despite the fact that Latinos outspend other groups at similar income levels, there is a lack of marketing spend towards Latinos as the report calls out, but I’d likely point more importantly to the need for products that are created by makers who understand the needs of their consumers, and the funding necessary for these company founders to thrive. There is particular a dissatisfaction when products are bought from non-Latino White counterparts.
Investing in Latino entrepreneurs would help solve for this gap
Latino entrepreneurs are one of the cohorts that creates new companies and often. The Stanford Latino Entrepreneurship Initiative is known for reporting on this: That not only do Latinos create a great number of new companies, they often outpace their counterparts. Yet, according to McKinsey they receive less than five percent of venture capital funding (by other counts it has stood at less than two percent in recent years). With proper access to capital be it bank loans or private-equity funding, our cohort could make a contribution of an additional $2.3 trillion in revenue to the economy and create 750,000 new employer firms. There is so much to be gained on this point.
But we still have other serious issues. Among them: the Latino wealth gap and how it was impacted by the pandemic
The dismal number above representing the wage gap for Latinas is in fact from 2022. But unfortunately this is only part of the issue when it comes to closing the Latine wealth gap. Per the aforementioned McKinsey report, if Latinos were represented paid same as non-Latino Whites and represented at adequate job levels for their population in the United States, they would be compensated an additional $281 billion in annual income. When you look at the bigger picture, Latino people have only one fifth of the median wealth of their non-Latino White counterparts. Recent years have offered no respite, as nearly 60 percent of Latinos lost jobs or took pay cuts during the pandemic when they were overrepresented in jobs vulnerable during COVID-19.
The pandemic showed that Latine business owners and community had great resilience
The pandemic had grave effects on the Latine community: 60% percent of Latino-owned business had to decrease or change operations during the pandemic. They wouldn’t have been able to survive without government aid. What has been most astounding to see is the percentage of Latino businesses who stabilized their businesses back to 2019 levels by the second half of 2021: a whopping 80 PERCENT, mi gente. Incredible. Now imagine if we had proper access to capital? The way we would be ready to put it to work!
Following Latine behaviors is important as the community embraces its economic power
Big developments are happening around the way that the Latino cohort manages its money and it is important more than ever to track. One one hand, we see some parts of the cohort less likely to invest and more likely to save for retirement. There is room for financial literacy education here. At the same time, luxury brands as of late are getting a bump from Latine consumers who are entering higher income brackets, making a portion of the cohort fastest-growing for the income category to afford luxury. Of course, this opens up a conversation on socioeconomic class within the community and how in order to elevate the cohort, we need to discuss how to help improve well-being of the FULL cohort.
Overall, the Latino cohort is becoming more relevant than ever when it comes to money, but it is important to address disparities at this inflection point as well, and in the aftermath of a pandemic. These are all topics and trends we will be exploring in 2023 via our podcast and newsletter. Join us in our next.
Thank you for joining us! Until next time, catch us here on Moneda Moves.