“Now that we have a road map for the future, this is the time for implementation,” says Domenika Lynch, the Executive Director of the Aspen Institute Latinos and Society Program (AILAS), about the research that has been produced to understand the current economic challenges and opportunities of Latinos in the U.S.
Lynch was recently in Southern California at two separate events that poignantly demonstrate the economic landscape for Latinos. Held in Los Angeles, this year’s Advancing Economic Mobility Summit, hosted by Aspen Institute Latinos and Society, featured the newly released report “The Economic State of Latinos in the U.S.,” from McKinsey & Company, the prominent powerhouse consulting firm and Summit partner. The report was subtitled “Determined to Thrive,” much more upbeat than last year’s “The American Dream Deferred.”
Lynch says that a renewed sense of optimism and resiliency is fueling Latinos despite the reverberating challenges of Covid along with ongoing systemic racial discrimination. Consider that 80 percent of Latino-owned firms had sales return to pre-pandemic levels by mid-2021 and that there was a 14 percent decrease in unemployment for Latinos from the pandemic high. Latino consumers are also back to spending at pre-pandemic levels.
“U.S. Latinos are a driving force of the U.S. economy and account for the fastest-growing portion of the U.S. GDP,” describes the McKinsey report. Lynch explains that with the right support, education, and leadership, “Latinos are poised to really embrace that American Dream.”
Representation and consumer needs
The recent L.A. summit also partnered with the entertainment media outlet Variety; panel discussions examined how Latinos are represented in front of the camera and behind it. Representation of Latinos in the entertainment industry is significant for reasons beyond mere cultural awareness.
“The notion of representation and the lack of representation of people of color, of Latinos, African Americans, Asian Americans, Native Americans, was important to highlight because it does impact at the end of the day,” Lynch says. “It also affects access to capital because people perceive our communities as communities that are not sophisticated enough for a certain loan or a business.”
In addition to advocating for more representation, Lynch is encouraged by “Latino-led production companies and studios who can relay the narrative of our communities and the growth of the business – which provides opportunities and consumption power.”
Indeed, Latinos as consumers are noteworthy; it also was the deep dive focus of the L.A. summit.
Lynch explained that overall, the Latino GDP is about $2.8 trillion annually, but when you examine that statistic through the lens of satisfaction, most of these purchases of products and services were ranked low.
The McKinsey report estimates that currently, the Latino consumer base has unmet needs of more than $100 billion.
“There’s a gap here, an opportunity to grow Latino-owned businesses that could cater to those unique preferences, whether it’s food, health, and wellness, financial products, etc.,” explains Lynch. And consider that Latino culture is not monolithic. “What may work for me would not work for someone who is Cuban American or Venezuelan American. There is a lot of opportunity to grow.”
The Digital Future, Small Businesses Lead the Way
Other discussions involved how COVID accelerated many Latino entrepreneurs to adopt a professional digital presence for the first time or finally develop social media plans they used to shy away from.
“Upskilling is so important for Latinos, especially those who are in service sectors and construction,” Lynch says. “You can’t have a little notebook with all your accounting notes; you really have to use QuickBooks and become more professional.”
When it comes to reshoring jobs in America, especially in advanced manufacturing and other high-tech industries, the Latino workforce will also need to be up to speed with these skills. Plus, having young Latinos see a career pathway is important.
Having Latino-owned companies with a digitally-skilled workforce means owners have more leverage when it comes to accessing capital to grow their businesses.
Right now, small businesses are typically left out. “There’s always a Catch-22,” Lynch says. “They are too small to get contracts, or they aren’t in the right sectors. So how do we grow them? Because small businesses could be a weapon to access capital for procurement opportunities.”
Strengthening the circular economy will help grow Latino businesses that can target those unmet needs of Latinos and, according to Lynch, strengthen local communities and economies.
Off the Ground in San Bernardino
The City of San Bernardino is one such community. It’s experienced a long bankruptcy, high unemployment, and an unsteady economic future. More than 60 percent of the population is Latino.
It’s been a year since the AILAS launched its City Learning and Action Lab here as a partnership with the Biden/Harris administration. It’s an initiative to spur economic growth using a committee approach: gather diverse local leaders to innovate and prioritize projects that can boost and sustain the local Latino business economy. Local funders are coming forward to connect to a national network (the “Build Back Better” Framework) for implementing solutions.
It’s the first program of its kind – taking place also in various cities like Chicago, San Antonio, Atlanta – and could be a model for other communities.
After the LA summit, Lynch traveled to San Bernardino to hear U.S. Education Secretary Miguel Cardona speak at the final White House Initiative Latino Regional Economic Summit of the year at Cal State University San Bernardino.
“The cabinet secretary talked about having strategic partnerships and to be your own problem solvers,” Lynch says. “The government can allocate funds, but it’s your responsibility to ensure that you can implement the solutions.”
Lynch pauses to take it all in.
“I had a lovely time at the summit in L.A., and conversations stemming from the McKinsey report were really important,” she says. “To come from that out to San Bernardino to visit with local leaders about their neighborhoods, their children, and how they want to see this moment, that gives me a lot of hope. This can really happen.”