If you’re selling, Latinos are buying – that’s the conclusion of a market report done by the company Claritas.
The report pegs cumulative lifetime spending of the average Latino household a little over $2.5 million. But as record high inflation impacts every American’s wallet, Latinos spending patterns mean they could be feeling the pinch even more.
Latino households spend more than the average American household in everyday categories like groceries, cleaning supplies, and apparel.
Jaime Dominguez, political science professor at Northwestern University said those spending patterns are in part due to the typically larger families Latinos have, and in the short term, that can help families stay afloat.
“Traditionally Latino families have normally multi members of household, so you have multiple wage earners in the house. And so in terms of just neutralizing the impact of the pandemic, I think they were able to neutralize that by being able to kind of pull their resources together to help pay for costs such as electricity, rent, water, etc.,” said Dominguez. “At the same time, this pandemic has been going on for a long time. So … it’s just very difficult to kind of sustain in the long term just because the prices continue to go up and so what that can lead to is perhaps these individuals having to take on perhaps multiple jobs.”
Antonio Alva, financial advisor with Northwestern Mutual, said the habits many Latinos have developed for managing their money can hurt them in tough financial times.
“Latinos are taught to save cash — if you can’t pay for things, put it in cash. The problem with cash is the value of cash stays the same, but inflation goes up year by year. So a lot of vehicles out there that can hide your money work for you, versus you working hard for your money.”
Dominguez said Latinos are already in a precarious financial position, given the effects of the pandemic on the job categories they are highly represented in.
“If we look at just the unemployment numbers overall, Latinos have been hit the hardest. If you just look at pre pandemic levels, the unemployment rate for Latinos today is actually far and above that. And if we just look at it through gender, Latina women have actually suffered the most — I believe that according to the Bureau of Labor in 2021, Latinas made up the largest percentage of unemployment by almost 20%.”
Latinos who own their own small businesses are also feeling the pain, said Alva.
“Business owners, they’ve seen the price of paying more for the cost of goods, pay more for the employees … So that means that they increase the prices so they can be profitable at the end of the day, so now the consumer has to pay for that as well,” Alva said. “So it’s helpful for business owners to understand what can they do to save for the future that can keep up with inflation. Because mathematically the inflation is going to outpace cash value.”