Latinos are crucial to the growth of the US economy. The community continues to face barriers such as less education, lower-paying jobs, and discrimination. However, their resilience to overcome these challenges has indicated a strong potential and basis for economic mobility.

The pandemic has shown that Latinos are uniquely vulnerable to income disruption. The Latino community is vastly overrepresented in industries most impacted by COVID-19, such as hospitality and restaurants. Furthermore, there is a higher concentration of low-wage occupations among Latinos than among their non-Latino White counterparts. As a result, almost sixty percent of Latinos had to take a pay cut or lost their jobs, leaving community members more vulnerable to high inflation compared to other ethnicity groups.

Supply chain disruptions, high inflation, and the lasting economic effects of COVID-19 have all posed longer-term challenges for both Latino consumers and Latino business owners. Collectively, sixty percent of Latino-owned businesses were forced to limit or alter their operations during the pandemic. Some owners required government assistance to keep their businesses open. Fortunately, by the second half of 2021, eighty percent of Latino-owned businesses had re-stabilized sales back to pre-pandemic levels.

Research has shown strong signs of economic growth among economically active Latinos. A recent report published by McKinsey & Company states, “Over the past year, Latinos have increased their share in professional occupations, raised their raised their net worth faster than their non-Latino White counterparts, and shown their mettle as the fastest-growing minority entrepreneurial group.” Latino consumers represent a $1 trillion market, and the community’s spending power continues to grow. The published report found that Latino spending power has experienced a six percent compounded annual growth rate in comparison to three percent for the non-Latino White population.

Although Latinos have remained resilient and experienced critical growth over the past decade, the community is still facing vast economic challenges in the aftermath of the COVID-19 pandemic. Companies, investors, nonprofit groups, and policymakers must address these barriers to close the economic gap. Purposeful policy and cultural changes are necessary to promote full economic participation by Latinos and further fuel a stronger US economy.

Both structural and immediate interventions are necessary to accelerate Latino economic advancement and prosperity. The McKinsey analysis states, “Action is needed in several key areas: improving Latino representation and inclusion in decision-making bodies; expanding product portfolios, optimizing value propositions and targeting marketing and sales strategies for Latino consumers; increasing access to capital for Latino entrepreneurs; improving access to education, reskilling opportunities, and better jobs for Latino workers; and removing bias and discrimination.”

Earning the trust and business of the US Latino market is an immense opportunity for organizations. The community is made up of consumers, workers, savers, and entrepreneurs all of whom have been vastly ignored and disregarded by corporations. If businesses choose to act and invest in the right people, processes, and systems to cater to the needs of Latinos, the consumer growth potential would be limitless.

For more information please visit: McKinsey.com