When it comes to the difference between what white men and Latina women earn in the United States in this decade, it’s hard to call it a wage gap.
It’s more like a gulf.
Latina Equal Pay Day falls on December 8, 2022 — pushed back seven weeks from last year’s October 21 date. This means that in the last year, Latina women have lost earning power — a trend we cannot allow to continue. This year’s date of December 8 means that Latina women have essentially been working for “free” for nearly the entire year, when you compare their average full-time earnings to the average earnings of a white man. That’s because Latina women are paid just 57 cents on every dollar a white man earns.
And of course when your earnings are low, it’s far more difficult to build wealth, or to set aside money for your future. So, how are Latina women really faring financially?
In 2021, Latina women working full time, year round, were usually paid a little more than half of every dollar paid to white men who were non-Hispanic. That giant divide in pay typically amounts to a loss of some $29,700 annually, and roughly $1.18 million during an average 40-year career, according to survey findings from the National Women’s Law Center.
A Hispanic family of three is situated somewhere close to 200% of the federal poverty level in the United States, with a Latina woman’s median annual earnings falling at roughly $38,700 for a year of full-time work, according to the Institute for Women’s Policy Research.
Unfortunately, those dismal statistics may not change any time soon. Consider this: If a Latina woman and her white, non-Hispanic male colleague both begin work at age 20, she would have to work 30 years longer – until she is 90 years old – to be paid what the white man earned by age 60, this study found. While Latina women are known for their longevity, the odds are not in their favor of working at full throttle another three decades after 60.
Pandemic Job Losses Increase Poverty
The pandemic was exceptionally harsh on Latina women and their families, as it sent hundreds of thousands of females home due to job losses or caregiving responsibilities. In just one year, from March 2020 to March 2021, the number of Latinas in the workforce fell by 2.74%, the biggest drop in labor force size of any demographic group, according to the U.S. Bureau of Labor Statistics. Because the pandemic hit members of service industries the hardest, some 700,000 (43.5%) of Latina women in the U.S. working in leisure and hospitality industries lost their jobs in a span of two months, from March to May 2020.
And these women have yet to fully bounce back. A U.S. Census Household Pulse Survey released in October 2022 revealed that nearly 1 in 5 Latinas (19.4%) reported not having enough food to eat in the previous week. A similar number of families also reported a loss in income during the same time period.
As of August, some 1.4 million Latinas were not working because of responsibilities related to family care, which happens to be nearly the same number reported in August 2020. In other words, the figure has remained virtually unchanged during the last two years. As early as August 2020, data shows that 1.5 million Latinas were not formally working outside the home because they needed to care for children and elderly family members.
Building Wealth Remains Challenging
When it comes to earning power and an ability to save for the future and retirement, Latina women (and their families) continue to operate at a disadvantage. Data from the U.S. Census Bureau showed notable differences in accumulated wealth among different sectors of Americans, which they measured by net worth.
In 2020, Hispanic people lived in households with a median net worth of $52,190 (which basically means half lived in a household with net worth at or below that number and half with a net worth at or above that amount). That figure was much lower than the median household net worth for people who were not Hispanic ($195,600).
The number of Hispanic people attending college has risen dramatically for several decades, according to data from Pew Research Center. Between 2000 and 2020, the number of Latinos enrolled at four-year institutions jumped from 620,000 to 2.4 million, a whopping 287% increase. To put that in perspective, overall enrollment at four-year institutions in the U.S. expanded by 50% during that time period.
Challenges remain. The inability to save money long term, because of such historically low income, has a dramatic impact on a Latina woman’s quality of life and those they care for. Data on retirement, collected by Prudential Research in 2014, found that only 19% of Hispanics had an individual retirement account (IRA), compared with 39 percent of the general population at that time. The numbers were slightly better when it came to workplace retirement programs with 38% of Hispanics saying they took part in such plans, including 401(k)s, 403(b)s, and 457, compared with 51% of the general population.
As they age, Hispanics are at greater risk than the general population of having low levels of retirement savings and will likely have to rely on Social Security benefits as a major source of retirement income, according to the Social Security Administration. Most retired workers can expect to get about 40% of their previous pay from SSI benefits.
Climbing the Corporate Ladder
Latina women (and men) make up the largest minority in the U.S., with more than 62.5 million people. By 2060, Latinas are expected to represent more than one-third of the U.S. female population and are the fastest growing sector of the entrepreneurial market.
Even still, they continue to be underrepresented in management and leadership roles in corporate America, accounting for a little more than one percent of executives. They also hold, on average, an estimated two percent of all corporate board seats, according to research from the Hispanic Association of Corporate Responsibility.
An American Dream Sometimes Out of Reach
Given all this, Hispanic homeownership falls woefully behind that of white households by more than 25%, per a 2021 survey from Washington Center for Equitable Growth. The same report also shows wide gaps between single Latina women and single white women who own homes, with the gap increasing as women mature. In women older than age 54, 74% of white women owned a home, while 50 percent of Latina women were homeowners.
Longer Life Expectancy = More Retirement Savings Needed
With a life expectancy of 84, Hispanic American women are one of the longest-living demographic groups in the U.S., according to the Centers for Disease Control and Prevention. Unfortunately, a longer life can also create financial burdens.
The Hispanic population age 65 and older is projected to quintuple from 2012 through 2050. By 2050, the share of Americans age 65 or older who identify as Hispanic should exceed 18 percent, thus increasing the number who will need benefits.
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