Big Changes to Public Service Loan Forgiveness Program
“As black and Latino households grow to become the majority of the population, their inability to spend due to the lack of wealth and paying down debt will slow economic growth. We owe it to ourselves and future generations to start correcting this problem now.” – Brian Thompson, Forbes
In the past few years, a growing group of Latinx consumers are driving the U.S. economy, with a total buying power of $1.7 trillion dollars, far outpacing the rest of the nation’s buying power. We can expect an influx of young, educated Latinx to enter the workforce, which will continue to build Latinx buying power. However, for every dollar earned by a white non-Hispanic male, Latinx still only earn 58 cents of that dollar. This means that any changes in the economy are likely to impact Latinx groups more and may be less prepared to handle financial hardship.
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The median wealth for single women is about $3,210 while the median wealth for men is $10,150. However, if we look at individual racial lines it’s clear that there is an even bigger gender wealth inequality. The median wealth for single white woman is about $15,460. However, single Latina women hold only $100 in median wealth. Latino men hold about $850 in median wealth.
This wealth gap is also evident in poverty rates. In the U.S., 13.4% of women and 9.9% of men are living in poverty. But if we look at individual races, again we see that Latinas experience poverty at a higher rate of 20.9%, compared to 9.6% of white women.
Data also shows that 60% of Latino households do not have enough liquid assets. If an emergency arose and families had to cover three months of basic living expenses, more than half of Latino families wouldn’t have an emergency fund that could cover all of it. We saw this happen during the Great Recession, which hit the Latino community particularly hard. As a whole, they lost 66% of their wealth, compared to 53% for black families and only 16% for white families. The recession had long-lasting consequences on Latina households and their financial situations. Many of them had to pay down debts years after the recession hit, and experience more difficulty in securing mortgages and loans due to foreclosures and bankruptcies.
The gender-based wage gap is particularly damaging to Latinas. It not only hurts women and their families, but our economy in the long-run as well.
More than three million family households are headed by Latinas, and a whopping 34% of these households fall below the poverty line, meaning that over a million Latina families are in poverty. Additionally, more than half of Latina mothers are the breadwinners in their families, so eliminating the wealth gap would provide income for many of these families.
Racial wealth inequality also has long-lasting implications on our economy. About 70% of our economic growth relies on consumer spending. As Latino households grow to become the majority of consumers, their inability to grow buying power as a result of lack of money and paying debt will ultimately slow our economic growth. Solving the racial wealth divide is not just about implementing policies to support Latina economic security but also about strengthening the U.S.’s health as a whole.
It’s up to the next generation to change this! Are you Latinx? Check out this 5 day email course designed for Latinx in mind.