Latino spending power up but savings depleted, report finds
U.S. Latinos account for the fastest-growing portion of the nation's total economic output but their overall financial health is at risk thanks to a lack of savings, a new report says.
Why it matters: The McKinsey & Company study is the latest to paint both a promising — and bleak — financial future for Latinos coming out of the pandemic.
By the numbers: Latinos' spending power had 6% compounded annual growth in the last decade, compared to 3% for the non-Latino U.S. population, per the report, titled "The Economic State of Latinos in the US: Determined to Thrive."
- Latinos’ net wealth has increased over the past decade at a 9% rate, compared to 4% for non-Latino white Americans. This is narrowing, but not closing, the overall wealth gap between the two groups, the report states.
Yes, but: Almost half of Latinos have little to no retirement savings and find it difficult to access financial products such as bank accounts, according to the report.
- Latino savings have been depleted since the pandemic, with almost half having little or no retirement savings.
- Only 23% of Latinos are considered financially healthy in 2022 compared to 35% of non-Latino white Americans.
What they're saying: "Latinos have also been more heavily impacted by COVID-19 and inflation than other populations, and this has exposed their vulnerabilities," the authors wrote in the report.
- Those vulnerabilities include a lack of representation on Fortune 500 boards and in C-suite positions.
- The authors recommend more investment in Latino entrepreneurs and say that more access to capital would contribute an additional $2.3 trillion in revenue to the economy and create more than 6 million jobs.
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