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1、November 2022Diversity&Inclusion Practice The economic state of Latinos in the US:Determined to thriveCover image:ferrantraite/Getty ImagesCopyright 2022 McKinsey&Company.All rights reserved.This publication is not intended tobe used as the basis for trading inthe shares of any company or forunderta

2、king any other complex orsigni cant nancial transactionwithout consulting appropriateprofessional advisers.No part of this publication may becopied or redistributed in any formwithout the prior written consent ofMcKinsey&Company.The economic state of Latinos in the US:Determined to thriveNovember 20

3、22AuthorsAna Paula CalvoCarolina MazueraJordan MorrisLucy PrezBernardo Sichel3The economic state of Latinos in the US:Determined to thrivePrefaceIn December 2021,we published our inaugural report on Latino economic mobility,The economic state of Latinos in America:The American dream deferred.It call

4、ed attention to Latinos in the United States,highlighting their contributions as workers,business owners,consumers,and savers.The findings in this follow-up report,The economic state of Latinos in the US:Determined to thrive,provide an updated,multidimensional view of Latino economic life,with parti

5、cular attention on Latino consumers,who represent a fast-growing segment underserved by existing offerings.Our framework is similar to that of last years report but anchored by consumers,who fuel economic growth across the US.We have embedded examples of actions companies and nonprofits are already

6、taking to support Latinos in the US,as thought starters and potential sources of inspiration.Our goal for this report is to shed light on both the barriers and the enablers of economic mobility so that we continue building a stronger,more inclusive economy.Seven out of ten people across the world li

7、ve in societies with growing inequality,and this is particularly true for Latinos,who have been disproportionately impacted by the COVID-19 pandemic and inflation.1 As a firm,we are committed to enabling sustainable and inclusive growth.We have invested in over 23,000 Asian,Black,and Latino leaders

8、through our Connected Leaders Academy to date,a program focused on capability-building and driving transformative personal and professional change.Additionally,we have helped launch Ownership Works,a new nonprofit aimed to create$20 billion of wealth for working families.The research was led by Ana

9、Paula Calvo,who is a consultant in McKinseys Miami office,where Carolina Mazuera is an associate partner;Lucy Prez,who is a senior partner in the Boston office;and Bernardo Sichel,who is a partner in the Chicago office.The project teams were led by Jordan Morris and included Anna Maria Gil,Valeria Z

10、uniga,Miranda David,and Jos de Lapuerta.Maria Gutierrez and Margret-Ann Natsis led external outreach and the authors would like to thank them for their contributions and support.We would especially like to thank the Aspen Institutes Latinos and Society program for their knowledge partnership and com

11、mitment to sharing this research externally.We hope this report,together with our previous publication from 2021,will spur further action.This work is independent and reflects our own views.Lucy Prez Co-leader of McKinseys North America Hispanic Latino Network Senior Partner,McKinsey&Company BostonN

12、ovember 20221 Daniela Bas,Elliott Harris,and Wenyan Yang,“World Social Report 2020:Inequality in a rapidly changing world,”UN Department of Economic and Social Affairs,2020.4The economic state of Latinos in the US:Determined to thrive5The economic state of Latinos in the US:Determined to thriveConte

13、ntsExecutive summary 71.Introduction 132.Latino consumers:Driving growth with conscious choices 153.Poised for success:Latinos at work,in business,and in wealth 294.Actions to support Latino economic mobility 456The economic state of Latinos in the US:Determined to thriveExecutive summaryUS Latinos

14、account for the fastest-growing portion of US GDP.So much so,that if we considered US Latinos as their own country,it would be third only to the GDP growth rate of China and India in the past decade.2 At a time of economic uncertainty with concerns about a possible recession growing,consumers are lo

15、oking for additional support.Our research estimates that the Latino consumer base has unmet needs of more than$100 billion currently,and this could grow six-fold to$660 billion if we address the parity gap between Latinos and non-Latino Whites based on share of population.Latino consumers are drivin

16、g growth while their needs go unmetOver the past decade,Latinos have grown their household consumption to reach a cumulative$1 trillion market in 2021a 6 percent annual growth rate over the last decade.Their household spend is higher compared to other groups at similar income levels,and yet marketin

17、g spend directed at Latinos most likely does not reflect this.3 Latinos are conscious of their impact,choosing brands that value the environment and their employees,all of which makes them more influential than their income levels would suggest.However,Latino consumers are often highly dissatisfied

18、with the products offered to themespecially compared to their non-Latino White counterparts.This dissatisfaction ranges across product categories,from food and beverages to financial products,which may point to unresolved needs that impact their daily life.If brands address the drivers of dissatisfa

19、ction in terms of access and value proposition,there is a collective$109 billion of revenue at stake,when considering current spending and future potential should improved products be offered.Latino voices remain underrepresented in the C-suites of corporate America where product offerings and capit

20、al allocation decisions are made,and this is particularly true of Latina women.As a result,Latino consumers are often overlooked by companies that do not recognize them as a priority demographic.Less than 5 percent of seats in Fortune 500 boards and in C-suites of corporate America are occupied by L

21、atinos despite this community representing 19 percent of the US population.4 Latina women hold 1 percent of seats in Fortune 500 boards,the smallest percentage of board seats compared to any racial or ethnic demographic in the US.5 Furthermore,Latina women may be further marginalized at work as desc

22、ribed in our latest Women in the workplace report.6 At the same time,Latinos have also been more heavily impacted by COVID-19 and inflation than other populations,and this has exposed their vulnerabilities.Consequently,Latinos are expected to change their consumer spending and take aggressive action

23、 to switch to brands that better meet their needs.Companies that support Latino consumers by optimizing value propositions and tailoring their marketing and sales strategies have a singular opportunity to capture the potential this growing market represents.2 Dan Hamilton,et al.,“2022 LDC US Latino

24、GDP report,”Latino Donor Collaborative,September 2022.3 Jeremy Goldman and Daniel Konstantinovic,“Hispanic consumers remain an underserved demographic for many marketers,”Insider Intelligence,September 25,2021.4“Latino Board Monitor,”Latino Corporate Directors Association,August 2022.5 Ibid.6 Larein

25、a Yee,et al.,“Women in the workplace 2022,”McKinsey in partnership with LeanIn.org.,October 18,2022.7The economic state of Latinos in the US:Determined to thriveClosing the Latino wealth gap would strengthen the existing consumer opportunity by more than 500 percent In a scenario in which Latinos ma

26、tch their spend to their share of population,Latino consumers would spend around$554 billion more than today.Closing this gap would require addressing the underlying income and savings gaps between Latinos and non-Latino Whites.Employers and society at large have much to gain from providing Latinos

27、with better jobs that also provide advancement and leadership opportunities.In pursuing greater prosperity and fulfilment,Latinos increased their share of professional roles to 25 percenta five percentage point gain over the past decade.However,Latinos still face barriers in the workplace,through di

28、scrimination,implicit biases,or a lack of opportunities for advancement in new roles.In fact,if Latinos were represented at job levels in line with their share of the population,and paid the same as non-Latino Whites,they would receive an additional$281 billion in annual income that could be further

29、 deployed to drive economic growth.7 Latino savers have only a fifth of the median wealth of their non-Latino White counterparts,and their savings have been depleted;today,almost half of Latinos have little or no retirement savings.Only 23 percent of Latinos are considered financially healthy in 202

30、2 compared to 35 percent of non-Latino Whites.Nevertheless,Latinos net wealth is increasing at a faster rate(9 percent for Latinos,versus 4 percent for non-Latino Whites),narrowingbut not yet closingthe gap with non-Latino Whites.If the trend continues,Latino households could reach an average net wo

31、rth of$47,000 this year.While Latinos have about half as much debt as non-Latino White counterparts,this may be because they find it difficult to access appropriate financial products.Latinos are 1.7 times more likely than non-Latino Whites to be turned down for a loan,and 30 percent are unbanked or

32、 underbanked compared to 12 percent of their non-Latino White counterparts.8 For financial institutions,this is a significant opportunity to address an underserved consumer market.Investing in Latino entrepreneurs is a key part of the answerLatinos are the most entrepreneurial group in the US econom

33、y,but they face significant barriers in access to capitalincluding lower approval rates than non-Latino White-owned businesses for bank loans,private-equity funding,and factoring.Less than 5 percent of venture capital is directed toward Latino entrepreneurs.9 These obstacles,along with Latino busine

34、sses lower representation in fast-growing economic sectors,limit their expansion and their opportunity to contribute to a more diversified product offering that meets the needs of American consumers.If Latino businesses access to capital were improved,and their representation in growing sectors incr

35、eased,they would contribute an additional$2.3 trillion in revenue to the economy and create 750,000 new employer firms,resulting in more than six million jobs.10 Interventions to improve access to funding,both from financial institutions and procurement-led organizations,and investments in digital c

36、apabilities for Latino businesses can help realize this potential.7 McKinsey calculations using the 2020 5-Year estimates,2020 ACS data release,American Community Survey,US Census Bureau.8“Economic well-being of US households in 2020,”Federal Reserve,May 2021.9 Janice Bitters Turi,“VC funding to ear

37、ly-stage Latine-founded startups in the US has stalled.Heres why that matters,”Crunchbase News,January 26,2022.10“Annual business survey 2019,”US Census Bureau.23%of Latinos are considered financially healthy in 20228The economic state of Latinos in the US:Determined to thriveDespite being dispropor

38、tionately impacted by COVID-19,Latinos have demonstrated resilience and determination to thriveWorkersSavers and investors54%Of the wage gap can be explained by 4%of professions$281BGap in annual income compared with non-Latino White Americans$47KExpected average household wealth based on historic g

39、rowth compared with$212k for White Americans80%of Latino-owned frms had sales return to pre-pandemic levels by mid-202114%decrease in unemployment rate from pandemic high$1.1T in aggregate annual spend,back to pre-pandemic level$77BGap in aggregate disposable savings among Latino and White household

40、sBusiness ownersConsumers744KNew businesses would be created if the Latino share of employer businesses matched its population share6.3MNew jobs would be created as a result(average size of Latino-owned frms decreased from last year)8%Annual growth in Latino spending for the past nine years$663BGap

41、in consumption,including to reach consumption parity and additional willingness to pay for better oferingsGap increased from last years reportGap decreased from last years reportExhibit E1The economic state of Latinos in the US:Determined to thrive9The economic state of Latinos in the US:Determined

42、to thriveLatinos proven resilience through the pandemic indicates strong fundamentals for economic mobilityLatinos play a crucial and growing role in the US economy and have demonstrated resourcefulness,hard work,and creativitydespite being challenged by lower-paying jobs,less education,and widespre

43、ad bias.Over the past year,it has become clear that Latinos are also uniquely vulnerable to income disruption.When COVID-19-associated lockdowns began to be implemented,Latinos found themselves in a precarious position:they were more concentrated in low-wage occupations than non-Latino Whites.11 As

44、a result,almost 60 percent of Latinoswho are overrepresented in industries most impacted by COVID-19,such as hospitalitylost their jobs or had to take a pay cut,and they are now more vulnerable to high inflation than other groups.The longer-term challenges Latinos face have been compounded recently

45、by the triplicate effects of COVID-19,supply chain disruptions,and high inflation affecting Latino businesses operations.Altogether,60 percent of Latino-owned businesses had to reduce or modify their operations during the pandemicto such a degree that some could not survive without government assist

46、ance.Fortunately,80 percent of Latino businesses had stabilized their sales back to 2019 levels by the second half of 2021.Our latest findings point to other welcome signs of agility among economically active Latinos.Over the past year,they have increased their share in professional occupations,rais

47、ed their net worth faster than their non-Latino White counterparts,and shown their mettle as the fastest-growing minority entrepreneurial group.As consumers,Latinos already represent a$1 trillion market,and their spending power is rising(6 percent compounded annual growth in the last decade,compared

48、 to 3 percent for the non-Latino White population).12 Latinos have been making significant strides over the past decade,and even more recently in the aftermath of the disruption presented by the COVID-19 pandemic.Nevertheless,deliberate intervention is necessary to close the gap and fuel a stronger

49、US economy.If companies,investors,nonprofits and philanthropists,and policymakers act now,they can address the barriers that hinder full economic participation by Latinos.The right combination of structural and immediate interventions can accelerate Latino economic advancement and prosperity.Action

50、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 t

51、o education,reskilling opportunities,and better jobs for Latino workers;and removing bias and discrimination.Winning the US Latino consumer,worker,saver,and entrepreneur is an outsize opportunity for organizations that act now and invest in the right people,processes,and systems to serve a market th

52、at has not been as visible as its numbers would foretell.11 “2020 5-Year estimates,”2020 ACS data release,American Community Survey,US Census Bureau.12“Consumer expenditure survey 2021,”US Census Bureau,US Bureau of Labor Statistics.80%of Latino businesses had stabilized their sales back to 2019 lev

53、els by the second half of 202110The economic state of Latinos in the US:Determined to thriveSidebar The journey continuesMcKinseys first report in this series,The Economic State of Latinos in America:The American dream deferred,was published in December 2021.It shone a spotlight on Latinos in the US

54、a rapidly growing population who make an outsized contribution as workers,entrepreneurs,consumers,and savers,but who remain economically well behind their non-Latino White counterparts.Highlights of the 2021 report:Latinos are a fast-growing population that will represent over 25 percent of the popu

55、lation by 2050 and a significant share of the US labor force.Latinos will make up nearly a quarter of the US labor force by 2030 and nearly a third by 2060.Latinos are concentrated in low-wage occupations,are less likely to have nonwage employer benefits,and are strikingly underrepresented in higher

56、-paying occupations based on their share of the US labor force.Latinos are highly entrepreneurial but constrained by lower access to capital,which limits their abilities to start and scale their businesses.While Latino consumption is growing at a faster pace than that of non-Latino Whites,it still l

57、ags well behind Latinos share of the US population,constrained by lower incomes and wealth.Latino wealth has grown at a rate more than twice that of non-Latino White wealth,given low participation in assets that accumulate wealth(for example,stock market)and a lower base($36,000 for Latinos versus$1

58、88,000 for non-Latino Whites).1 1 “2019 survey of consumer finances,”Federal Reserve,2020.Data sources This research is based on both publicly available sources and proprietary McKinsey data,research,and tools.Data used in this report was drawn from multiple sources including the US Census Bureau,St

59、anford Graduate School of Business,the Bureau of Labor Statistics,and McKinsey consumer surveys.The primary external sources include the US Census Bureaus American Community Survey,the Feds Small Business survey,Stanfords 2021 State of Latino Entrepreneurship,and the US Bureau of Labor Statistics Co

60、nsumer Expenditure Survey.We also designed and implemented a consumer survey(conducted August 2022,n=4,400)to better understand Latino consumer preferences and dissatisfaction.This survey also focused on understanding differences across Latino subgroups,including by place of birth and income bracket

61、,amongst other dimensions.11The economic state of Latinos in the US:Determined to thrive12The economic state of Latinos in the US:Determined to thrive1.IntroductionLatinos are a fast-growing population in the US,and their role is becoming more critical than everespecially at a time when the broader

62、economy is strained by inflationary headwinds.As consumers,Latinos already represent a$1 trillion market,and their strength is increasing.13 They increasingly occupy higher-skilled and professional roles as both workers and business owners.And,as savers,they are preparing their families for the futu

63、re.Yet,too often,Latinos find themselves stuck in low-wage jobs with limited prospects that do not reflect their full potential.They felt the economic impact of COVID-19 to a greater degree than non-Latino Whites.14 Similarly,Latinos have proven they are more vulnerable to the impact of high inflati

64、on.This makes it more urgent than ever to understand the role Latinos play in the US and to undertake far-reaching interventions that promote equitable advancement and opportunityas discussed in last years report,The economic state of Latinos in America:The American dream deferred.Change is possible

65、,and a better,fairer,and more equitable society for Latinos can be created,strengthening and improving US society for all.In this report,we have identified practical,targeted interventions,with examples of corporate actions,that can address Latinos needs and could unleash trillions of dollars into t

66、he US economy.The structural and practical interventions proposed could support Latinos as they consolidate their economic significance in the USclosing the gaps in a move that will hold massive gains for society as a whole.And for millions of households and communities,this would mean better securi

67、ty,more prospects,and more financial freedom.BoxLatinos in the USLatinos form a substantial and growing demographic,accounting for almost 19 percent of the US population today.On average,they are younger and increasingly more educated,as 70 percent have completed at least a high school education.1 O

68、ver a third are immigrants and may be supporting family members elsewhere.They tend to be overrepresented in lower-paying occupations,face barriers accessing capital,and find it more difficult to save and invest in assets that accumulate wealth over time.13 “Consumer expenditure survey 2021,”US Cens

69、us Bureau,US Bureau of Labor Statistics.14 Anna Brown,Juliana Menasce Horowitz,and Rachel Minkin,“A year into the pandemic,long-term financial impact weighs heavily on many Americans,”Pew Research Center,March 5,2021.1 “2020 5-Year estimates,”2020 ACS data release,American Community Survey,US Census

70、 Bureau.13The economic state of Latinos in the US:Determined to thrive14The economic state of Latinos in the US:Determined to thrive2.Latino consumers:Driving growth with conscious choicesOver the past decade,Latinos have grown their household consumption to reach a cumulative$1 trillion market in 2

71、021a 6 percent annual growth rate over the past decade.Their household spend is higher compared to other groups at similar income levels given that Latino households are larger than those for non-Latino Whites.And Latinos are conscious of their impact,choosing brands that value the environment and t

72、heir employees,all of which makes them more influential than their income levels would suggest.However,Latino consumers are often highly dissatisfied with the products offered to themespecially compared to their non-Latino White counterparts.This dissatisfaction ranges across product categories,from

73、 food and beverages to financial products,which may point to unresolved needs that impact their daily life.If brands can address price and qualitythe drivers of dissatisfactionthere is a potential$109 billion in spending at stake for Latino consumers.At the same time,Latinos have also been more heav

74、ily impacted by COVID-19 and inflation than other populations.They are likely to take aggressive action to save money and switch to brands that better meet their needs(Exhibit 1).Companies can support Latino consumers by optimizing value propositions,offering value product lines,and tailoring their

75、marketing and sales strategies.Sidebar The Latino consumer is younger,increasingly more educated,and with less incomeLatinos form a large and growing demographic within the US and account for an increasing share of total consumption,although there is a spending gap between them and others.Latinos ar

76、e relatively young,with a median age of 30.5 years,and more than a third are immigrants,compared to under 5 percent among non-Latinos.16 In terms of country of origin,Mexicans account for the largest group of immigrant Latinos,representing 62 percent of the total US Latino population,followed by Pue

77、rto Ricans(10 percent).Latinos have lower incomes when compared to other groups:37 percent of Latino households have an annual income of less than$40,000 compared to 28 percent of non-Latino households.Their education levels are increasingin 2014,36 percent had not completed high school,but by 2020,

78、only 30 percent lacked a high-school diplomabut still lag other groups,with only 9 percent of non-Latino Whites not completing high school.17 As a result,they earn less,are overrepresented in lower-paying occupations,and have fewer opportunities for advancement,as discussed in the previous chapter.A

79、s a diverse demographic,despite certain generalities,they show correspondingly diverse behavior.Besides socio-economic differences,US-born Latinos show a higher level of acculturation,such as language use,and their preferences are closer to those of their non-Latino White counterparts than those of

80、foreign-born Latinos.Latino consumers can be understood and segmented appropriately to address their differing needs.1 “2020 5-Year estimates,”2020 ACS data release,American Community Survey,US Census Bureau.2 Ibid.15The economic state of Latinos in the US:Determined to thriveExhibit 1Latinos are ov

81、errepresented in frontlines and underrepresented in senior management+roles.4x more than general population.2022 annual spend,$BExpected impact of infation on consumption,%Expected decrease in spend due to infation,$B1Includes Food&Bev at home,Housing and Healthcare.Source:McKinsey consumer survey,A

82、ugust 2022(n=4,400)48%$9,313B52%General population48%$1,215B52%Latinos31%$136B69%General population24%$79 B76%Latinos-1.0-1.5-1.9General population-2.7-6.5-10.0LatinosEssentialNon-essentialmore on non-essential categories5xmore on essential categories and 3xInfation is expected to impact Latino cons

83、umption more than the general US population of consumption reduction due to price increases from infationary pressure70%of total spend but those categories will absorb50%Spend in non-essential categories for general US population accounts forLatinos grow their spending,despite lower income levelsLat

84、inos form a key consumer group in the US,with a market size of$1 trillion per annumdespite a spending gap in part due to lower income levels.As a group,Latinos are growing their consumption faster than non-Latino Whites(Exhibit 2).While Latinos overall spend has increased significantly in the past d

85、ecade,it still lags their share of population:Latinos account for 19 percent of the US population but drive only 13 percent of total household income,with more expenditure on essentials such as food at home,healthcare,and housing.While Latinos spend more than their population share in rental accommo

86、dation,mens and childrens clothing,and footwear,there is still a$554 billion gap in consumption that could be closed if Latinos expenditure matched their share of the US population(Exhibit 3).15Despite their lower average income levels,Latino households spend more than others at the same income leve

87、l.Sixty percent of Latinos have a household income of under$50,000,compared to 50 percent of non-Latino Whites.But Latinos in this demographic spend slightly more per household than non-Latino Whites in the same income bracket$21,300 per annum15 “2021 consumer expenditure survey,”US Census Bureau,US

88、 Bureau of Labor Statistics,US Department of Labor.16The economic state of Latinos in the US:Determined to thriveExhibit 2While Latino consumption has grown,it still falls short of Latinos share of the US population.US population.Total annual household consumption,$T1 1Based on total aggregate expen

89、ditures from Consumer Expenditure Survey times share of aggregate.Source:US Census Bureau,Consumer Expenditure Surveys(https:/www.bls.gov/cex/),and American Community Survey 2020 5-Year estimates Web 2022Emerging cautiously:Australian Consumers in 2022Exhibit 2 of 10Latino share of US consumption,%7

90、6+5%p.a.+8%p.a.543210201110.41210.31310.71410.91511.11610.71711.11811.91911.92012.1202112.7White,non-Latino householdsLatino householdsExhibit 3The gap in Latino consumption based on their share of population has decreased in the past 5 years,but is still meaningful at$554 billion.The gap in Latino

91、consumption based on their share of population has decreased in the past 5 years,but is still meaningful at$554 billion.Latino share of aggregate expenditure vs.share of population,%1Diference between total aggregate household expenditure times Latino share of population,and current Latino aggregate

92、 expenditure.From Consumer Expenditure Survey.Source:US Census Bureau,Consumer Expenditure Surveys(https:/www.bls.gov/cex/)(2020)17.6%10.7%2016-6.9 p.p.-6.9 p.p.12.7%202118.9%Share of populationShare of consumptionAggregate expenditure for US households in 2021 was$8.937BAggregate expenditure for La

93、tino households in 2021 was$1.135BRepresenting agap in consumption,or 6.2pp diference with expected expenditure based on the Latino share of households$554Bcompared to$20,900.16 This is largely driven by higher spending on essentials,with half of Latino income,on average,going to food at home,housin

94、g,and healthcare.However,given that Latino households are larger than non-Latino White households(with an average of 3 people per household,compared to 2.3 for non-Latino Whites),the actual spend per consumer is slightly lower($7,100 for Latinos versus$9,087 for non-Latino White counterparts).1716 I

95、bid.17 Ibid.17The economic state of Latinos in the US:Determined to thriveLatino consumer needs are not being metAcross all categories,Latinos are more dissatisfied with current offerings than their non-Latino White counterparts.18 Twenty-eight percent of Latinos report being unhappy with current pr

96、oduct offerings,compared to 21 percent of non-Latino Whites.19 Dissatisfaction represents a missed opportunity for companiesLatino consumption could be significantly increased if their needs were met more effectively.In some instances,Latinos may have a need for products in particular categories but

97、 are not purchasing,while in other instances,Latinos are buying products in categories even though they are not satisfied with the product choice,quality,or price.Product penetration among Latinos can be low:a quarter of Latinos do not currently purchase in specific spending categories(such as makeu

98、p or full-service restaurants),despite being decision makers and having a need for the product,thus creating another significant opportunity for companies.Consumer dissatisfaction varies extensively among Latino subgroups,driven by differences in education,income,background,and gender.Latinos who ar

99、e less educated are unhappier with products.Their dissatisfaction scores are 14 percentage points higher than the average Latino.Those who have not completed high school are three times more dissatisfied than non-Latino Whites at the same educational level.20 Latinos from lower-income backgrounds(le

100、ss than$50,000 per year)have an average dissatisfaction nine percentage points higher than the average for Latinos,at 37 percent.And first-generation immigrants are seven percentage points more dissatisfied than average.Latina women are ten percentage points more dissatisfied than Latino men,similar

101、 to the 12 percentage point difference seen between White men and women.Latino dissatisfaction with current product offerings grew significantly between 2021 and 2022 across all categories,and they are consistently more dissatisfied than non-Latino Whites,even though non-Latino Whites are also more

102、dissatisfied than previously.Beauty and personal care,18 Dissatisfaction is measured by rating satisfaction levels between one and six on a ten-point scale.19“Consumer survey,”McKinsey,August 2022(n=4,400).20“Consumer survey,”McKinsey,August 2022(n=4,400).A quarter of Latinos do not currently purcha

103、se in specific spending categories,despite being decision makers and having a need for the product,thus creating another significant opportunity for companies.18The economic state of Latinos in the US:Determined to thriveentertainment,hospitality and travel,vehicle purchases,housing,banking and fina

104、ncial services,and healthcare are all categories with higher-than-average Latino dissatisfaction.Latinos are dissatisfied with current product offerings for several reasons,particularly price,lack of features,and lack of value for money.For both non-Latino Whites and Latinos,affordability and qualit

105、y are the main decision drivers for purchases.High prices are linked to dissatisfaction across categories,and,given low disposable income(as discussed in the previous chapter),remain a critical consideration.A shortage of quality products and poor value for money also lead to dissatisfaction(Exhibit

106、 4).And,while less important than price,customers are disappointed with companies that are not committed to addressing social inequities.Opportunities to address dissatisfaction:A win-win situationAddressing Latino consumers dissatisfaction could benefit both companies and consumers.Latino buyers wo

107、uld be willing to increase their consumption by up to 25 percent if products were more affordable,of a higher quality,and healthier;they expressed willingness to pay 28 percent more if the top reasons for dissatisfaction were addressed.Altogether,they would be willing to spend a total of$33 billion

108、more per year across all categories if their needs were met (Exhibit 5).Even Latino consumers who are currently satisfied would be willing to pay more if product offerings were improved,with a total of$76 billion of revenue at stake.21 With$109 billion in current and potential spending at stake,comp

109、anies that address dissatisfaction may benefit from additional market support.However,this is unlikely to be incremental,as much of this would be due to potential shifts in spending from one product or service to another.Exhibit 4Affordability and product quality are key drivers of dissatisfaction a

110、mong Latinos.18%14%10%8%12%9%7%6%8%6%6%5%6%5%16%18%10%14%14%13%12%9%9%6%10%10%6%8%15%19%8%10%12%11%7%6%5%6%5%6%6%5%15%16%12%10%12%8%13%5%13%6%11%6%9%6%10%10%18%11%4%4%5%5%5 pp diferenceLatinoWhiteAfordability and product quality are key drivers of dissatisfaction among Latinos.Top reasons for Latino

111、 dissatisfaction across products and services,%11Each percentage is out of 100%,as question asks binary yes or no whether reason is tied to dissatisfaction.N/A if question was not asked regarding that category.Source:McKinsey consumer survey,August 2022(n=4,400)AfordabilityQualityVarietyLack of comm

112、itment to social inequitiesConvenienceNot produced/ofered/owned by racial/ethnic groupTrusthworthinessFood and beverages at homeFood and bev away from homeBeauty and personal careBankingHousehold and cleaning21“Consumer survey,”McKinsey,August 2022(n=4,400).19The economic state of Latinos in the US:

113、Determined to thriveExhibit 5Latino consumers would be willing to spend$33 billion more if reasons for dissatisfaction were addressed Latino consumers would be willing to spend$33 billion more if reasons for dissatisfaction were addressedShare of Latino respondents expressing dissatisfaction with cu

114、rrent oferings in category,%37293224283027322625252528327.4%12.1%11.1%12.8%14.9%9.5%10.5%10.8%8.0%16.3%16.3%10.8%12.4%9.1%10,85,13,83,72,62,01,31,10,60,60,60,50,4TBD33,11454334291721121084453TBD335Aggregate yearly spend for dissatisfed Latino households,$BAdditional WTP for better products Size of u

115、nmet demand,$billion1Average yearly spend per household from consumer expenditure survey,times 19.7M Latino consumer units,times share of households dissatisfed.2Expressed additional willigness to pay if reasons for dissatisfaction were adressed.Source:McKinsey consumer survey 2022(n=4,400)Hospitali

116、ty and travelVehicle purchasesFood&beverages at homeFood&beverages away from home Apparel(incl.footwear)TelecomEntertainmentBeauty&personal care productsHousehold&cleaningConsumer electronicsEducationBanking&fnancial servicesTotalHealthcareHousingCategories with greatest dissatisfaction20The economi

117、c state of Latinos in the US:Determined to thriveLatino consumption patterns:Strategic spenders,socially aware,and social media savvyThere is also a$554 billion gap in Latino consumption based on the discrepancy between their total expenditure as a share of overall US spending and their share of pop

118、ulationand closing this gap would require improving Latino income levels.This is in addition to the$109 billion of spending at stake that arises from Latino consumer needs going unmet,discussed above.Understanding how Latinos consume,and how their behavior differs from non-Latinos,will allow society

119、 to close this gap and realize the benefits.Latinos tend to be careful and strategic spenders,and,despite having a lower average income than non-Latino Whites,are discerning consumers with a high level of attention for sustainability considerations when making a purchase.22 They are,overall,conserva

120、tive and conscious spenders.Latinos spend a greater proportion of their income on essentials compared to their non-Latino White counterparts(40 percent compared to 33 percent).Survey data shows they tend to be more price-conscious than the general US population,feel more financial pressure,and activ

121、ely look for savings and deals.23 Almost half of Latinos are actively looking for ways to save money,above the national average of 44 percent.They are also more willing to switch to less-expensive products to save costs(34 percent compared to 27 percent of all consumers),and more than a third of Lat

122、inos actively research the best promotions when seeking to make purchases(35 percent compared to 29 percent of all consumers).Moreover,this price-conscious behavior supports the finding that Latinos in lower-income households(representing the majority)tend to spend less per person than their non-Lat

123、ino White counterparts.As a result,Latinos,like non-Latino Whites,are increasingly looking for ways to save money.They pay similar attention to prices when shopping compared to non-Latino Whites(47 percent compared to 45 percent).Latinos may be willing to spend more on products they care about,while

124、 finding cheaper alternatives for those they are less invested in.But Latinos may also be under more pressure to save money because of their larger average household size,which necessitates greater spending on essentials.Latinos are comfortable shopping online and are engaged consumers.They are more

125、 conscious of sustainability considerations and are more likely to factor in such considerations when making purchases than the general population.24 Social issues and organic products are particularly important to them compared to the general population(a 12 and 14 percentage point difference respe

126、ctively).In total,82 percent of Latinos report that they use omnichannel(online and in-store)and e-commerce platforms,compared to 80 percent of the overall population.25 Social media can be a powerful influence on consumer behavior and its effects are more pronounced in Latinos than in the overall U

127、S population.Latinos of all age groups are more likely to be influenced by social media when making a purchase,with 68 percent of them reporting that they are nudged toward certain brands by social media posts compared to 47 percent overall among US consumers.26 Correspondingly,Latinos have a higher

128、 average level of social media engagement than non-Latinos across all major social media platforms.For instance,89 percent of Latinos use YouTube at least weekly,compared to 75 percent overall.2722“Consumer survey,”McKinsey,August 2022(n=4,400).23 “Consumer sentiment survey,”McKinsey,2021.24“Consume

129、r pulse survey:February 25 to March 1,2022,”McKinsey,2022(n=2,160;sampled to match US general population 18+years).25 Ibid.26 Ibid.27 Ibid.21The economic state of Latinos in the US:Determined to thriveAcross the board,the categories that see the largest influence from social media are appearance rel

130、ated,such as fitness and wellness services,skin care and makeup,and accessories and jewelry.However,among Latinos,influence from social media in consumer electronics and home decoration is felt significantly more strongly than in the overall population,with a 24 and 19 percentage point difference,re

131、spectively,in the percentage of respondents who were influenced by social media in purchases in these categories.28Latino consumers are also much more likely to be influenced by brands and celebrities posts on social media,and documentaries,compared to non-Latinos.Half of Latino consumers said they

132、were inspired to purchase by these sources,compared to a quarter of non-Latinos.29 Latino consumers are feeling the inflationary pinch The COVID-19 pandemic hit Latinos hard and inflation is compounding the impact.In response,almost 80 percent of Latinos are taking action to manage their expenses du

133、e to inflationary pressures,compared to two-thirds of non-Latino consumers.30 This may include reducing savings,increasing credit card balances,taking on more hours at work or a second job,and skipping bills or paying less than the minimum due.Latinos pre-existing price-conscious behavior has been e

134、xacerbated by high inflation.A fifth are planning to cut back on spending,compared to 14 percent of non-Latino Whites,while 82 percent are trading down across categories,compared to 74 percent of non-Latinos.31 This includes adjusting the quantity or pack sizes purchased,delaying purchases,switching

135、 to a cheaper brand,and taking on more debt by using“buy-now,pay-later”services(a strategy that is more prevalent among Latinos than the general population by 11 percentage points).Overall consumption is expected to fall across the board,with Latinos cutting back more than non-Latino Whites.Total co

136、nsumption is predicted to drop by 7 percent among Latinos,compared to only 1 percent in non-Latino Whites.32 The fall in Latino spending could account for an aggregate loss of$80 billion,close to the expected effect of reduced consumption among non-Latino Whites,at$100 billionthis despite non-Latino

137、 Whites having six times the aggregate consumption of Latinos.Non-essential categories will be particularly hard hit,even after sustaining a drop in spending due to COVID-19.Although overall spending,which dipped in 2020,has now mainly returned to 2019 levels,essential goods account for a larger sha

138、re than previously.Going forward,Latinos are predicted to reduce their spending at three times the rate of the general population for essential categories,and five times for non-essentials.33 They are likely to pull back on non-essential spending by 10 percent but will only drop spending by 3 percen

139、t for essentials.34 To reduce their spending,consumers across the board are responding to inflation by choosing private brands across categories.Overall,48 percent of customers who noticed inflation changed brands,and,of this,the switch was to private brands 38 percent of the time.Latinos reflect th

140、is general trend,with 47 percent switching brands and 36 percent switching to private brands.28 Ibid.29“Future of food survey 2022,”McKinsey,December 2021.30“Consumer pulse survey:June 7 to October 7,2022,”McKinsey,2022.31 Ibid.32“Consumer survey,”McKinsey,August 2022(n=4,400).33 Housing,food and be

141、verages at home,and healthcare are considered to be essential products or services.34 “Consumer survey,”McKinsey,August 2022(n=4,400).22The economic state of Latinos in the US:Determined to thriveMore vulnerable cohorts are likely to be badly affected by inflation(Exhibit 6).Latinos with less accult

142、uration,a low household income level,and those with little formal education are expected to reduce their consumption by around five percentage points more than the average for Latinos.First-generation Latino immigrants are also expected to be hard hit,reducing their consumption by an extra three per

143、centage points.And gender is a significant factorwomen are likely to reduce their consumption by a further three percentage points.Exhibit 6Inflation will hit vulnerable Latinos particularly hardWhites,non-LatinoLatinos1pp reduction in consumption than average LatinoAverage expected change in Latino

144、 consumption due to InfationInfation will hit vulnerable Latinos particularly hard.Source:McKinsey consumer survey,August 2022(n=4,400)5 pp diference 10pp diference 26The economic state of Latinos in the US:Determined to thriveExhibit 2Price and poor value dissuade Latinos from purchasing in beauty

145、and personal care.Price and poor value dissuade Latinos from purchasing in Beauty and Personal Top reasons for Latinos not purchasing products,%1Each percentage is out of 100%,as question asks binary yes or no whether reason is tied to dissatisfaction.Source:McKinsey consumer survey,August 2022(n=4,

146、400)5%4%7%6%AfordabilityVarietyNot meeting need of racial/ethnic groupMany products/services are not high qualityConvenienceFeaturesDont support the environmentNot animal friendly23%7%7%2%19%5%9%5%15%3%4%1%4%1%7%4%24%5%5%3%1%10%4%3%5%9%4%1%17%8%3%2%7%1%3%1%7%2%4%1%4%2%4%1%30%7%4%3%6%3%4%2%7%3%2%4%2%

147、2%3%2%WhiteLatino5 pp diference 10pp diference Face skin careHair careMakeupFragrance27The economic state of Latinos in the US:Determined to thrive28The economic state of Latinos in the US:Determined to thrive3.Poised for success:Latinos at work,in business,and in wealth creationLatinos play a signi

148、ficant role in the US economy as workers,business owners,consumers,and savers or investors.However,they face many barriers to advancing,whether on an individual or business front,and would benefit from interventions to overcome these obstacles.The private sector can also play an important role as La

149、tinos seek to reach their full potential.Latino workers:A key pillar in the US workforceOne in every five workers in the US is Latino,and the number is growing rapidly.They earn 12 percent of wages and represent 18 percent of the workforce,making Latino workers a key pillar in the US economy.Althoug

150、h the COVID-19 pandemic impacted them disproportionately and Latinos are feeling the effects of elevated US inflation acutely,Latinos workforce share could increase to 23 percent in 2030.36The Latino workforce has progressed over the past decade,increasing its share in higher-paying occupations by f

151、ive percentage points.Yet Latinos still face steep barriers to mobility,including wage disparity,implicit biases,discrimination,and lack of additional training opportunitiesall of which hinder Latinos from reaching their full potential.And,compared to non-Latino Whites,Latinos are primarily concentr

152、ated in low-wage occupations and are paid less than non-Latino White workers within the same occupations.Overcoming these barriers could boost their annual income by more than$281 billion,enhancing their well-being and the health of the overall US economy.37Most are born in the USAand are of prime w

153、orking ageThe majority of the Latino workforce was born in the US and over 60 percent are of Mexican origin.Altogether,43 percent of Latino workers are younger than 25 years old,compared to 32 percent of the overall US population,and 69 percent are between the prime working ages of 25 and 54,compare

154、d to 64 percent of overall.38 36 “Current population survey,employment status of the Hispanic or Latino population,”US Bureau of Labour Statistics.(Calculated based on a five-year CAGR for Latino population of 3 percent.)37 McKinsey calculations using 2020 5-Year estimates,2020 ACS data release,Amer

155、ican Community Survey,US Census Bureau.38“Current population survey 2021,”US Census Bureau.(Employment status of the Hispanic or Latino population by age and sex.)29The economic state of Latinos in the US:Determined to thriveAs highlighted in our 2021 report,The economic state of Latinos in America:

156、The American dream deferred,during the COVID-19 pandemic,the number of Latinas in the labor force decreased as they lost their jobs at higher rates,sometimes to take up caregiving responsibilities.Today,two out of every three Latino workers are male.Despite striving for upward mobility,Latinos are p

157、rimarily overrepresented in frontline jobs and earn lower wages than their non-Latino White counterparts.They fill 16 percent of frontline-hourly and 9 percent of frontline-salaried roles in the US,compared to only 4 percent of executive and 3 percent of board positions(Exhibit 7).The labor pool run

158、s deep Latinos have a higher proportion of immigrants than the rest of the US population.Foreign-born Latinos comprise 38 percent of the overall Latino population,three times higher than the 14 percent share of immigrants in the general US population.Among Latino workers,almost half(45 percent)are i

159、mmigrants.The Latino labor-force participation in September 2022at 67 percentremains the highest amongst all ethnicities in the US.In the last decade,their participation has remained above average.The share of Latinos in management,professional,and related occupations has increased five percentage p

160、oints in the last decade,reaching 25 percent.However,representation in sales and office roles decreased by 3 percent during the COVID-19 pandemic.And despite moving into more professional occupations,Latinos are still far behind when comparing their average median wage in these new roles to that of

161、the overall US population.39Exhibit 7Latinos are overrepresented in frontlines and underrepresented in senior management+roles.Latinos are overrepresented in frontlines and underrepresented in Senior Management+roles.Compared to 18.3%Latino share of workforce.Source:McKinsey,Women in the Workplace 2

162、021 Talent Pipeline analysis;423 participating companiesOtherAsianBlack/African AmericanWhite/CaucasianHispanic/LatinoFrontline hourlyFrontline salariedCorporate entry levelManagerSenior managerVice presidentSenior presidentExecBoard2.5%5.6%9.0%10.8%13.0%13.7%15.0%14.7%15.2%Representation gapPositio

163、n hierarchy16139855343596665717680838281149864444977131312998610045433211139 “2020 5-Year estimates,”2020 ACS data release,American Community Survey,US Census Bureau.30The economic state of Latinos in the US:Determined to thriveCOVID-19 dramatically affected the cost of living Latinos experienced ec

164、onomic turbulence during the COVID-19 pandemic.Almost 60 percent said someone in their household was laid off or took a pay cut.Altogether,44 percent of all Latino adults said their household lost some or all income during the pandemic(Exhibit 8).Companies changed practices that promoted diversity,e

165、quity,and inclusivity(DEI)during the pandemic slowdown,affecting Latino recruitment.These changes led to decreases in internship programs,in the number of companies partnering with organizations to recruit Latino talent,and in companies leveraging employee resource groups(ERGs).Latinos also experien

166、ced less flexibility in choosing where to work during and after the pandemic compared to the US average.By February 2022,US workers averaged 3.1 days working from their job site,while Latinos averaged 3.4 days.However,this varied by income level,with higher-paid workers having more flexibility,and l

167、ow-wage workers having less.Altogether,69 percent of high-income Latinos could work from home by February 2022,compared to 66 percent of their non-Latino counterparts.Only 48 percent of lower-income Latinos could work from home,making it harder for them to juggle caring responsibilities while workin

168、g.They also had to deal with increased transportation costs.Exhibit 8More than half of Latinos said they or someone in their household was either laid off or took a pay cut since the start of the Covid-19 pandemiclaid of or took a pay cut since the start of the Covid-19 pandemic.%saying each of the

169、following happened to them or someone in their household since the coronavirus outbreak began in February 20201Asian adults were interviewed in English only.2Includes those who say they or someone in their household has been laid of or furloughed since the coronavirus outbreak began.Source:Pew Resea

170、rch Center Survey of US adults conducted Jan 19-24,2021.“A year into the pandemic,long-term fnancial impact weighs heavily on many Americans”Net either/both4458404154HispanicWhiteBlackAsian3345293336All adultsBeen laid of/lost a job Had to take a pay cut 314428284331The economic state of Latinos in

171、the US:Determined to thriveCorporate ladders broken rungsLatinos experienced economic turbulence during the COVID-19 pandemic.Almost 60 percent Latinos remain underrepresented in leadership and senior roles,but over-represented in entry-level and frontline positions.Around half of Latino professiona

172、ls believe companies are not taking action on diversity,and over 40 percent complain of discrimination.In total,44 percent of Latino professionals have faced blatant discrimination and/or microaggressions at work.Similarly,54 percent of these professionals believe there is a lot of talk in the workp

173、lace about diversity but no policy change to make it a reality.40 For those Latinos who have moved into professional roles,further challengessuch as discrimination and lack of support for advancementhinder their upward mobility.And many feel that they have been overlooked for career advancement beca

174、use of their race.In total,60 percent of Latino professionals between the ages of 18 and 34 years believe that race plays a role,while 54 percent are considering resigning due to a lack of growth or promotion opportunities.While 85 percent of frontline workers wanted to further their careers,only 55

175、 percent actually received career opportunitiesa 30 percentage point difference.41 Latinos across all levels in the workplace are also less likely to have sponsors or mentors.Latina women are further disadvantaged by their gender,as McKinseys Women in the workplace report makes clear.For every 100 m

176、en promoted from entry-level to manager positions,only 75 Latina women are similarly promoted.Latinas and Black women are less likely than women of other races and ethnicities to say their manager shows interest in their career development.They also tend to feel less psychological safetyfor example,

177、less than half of Latinas and Black women say people on their team arent penalized for mistakes.Just 27 percent of Latinas say a senior coworker has advocated for a raise for them.42 In addition,Latinos tend to lose representation in job levels that require greater soft skills,such as sales,negotiat

178、ion,and management.Narrow and inconsistent definitions of interpersonal skills,as well as possible cultural and language differences and workplace biases,could be hindering their progress.Research has found that many employers consider Latinos to be lacking in interpersonal skills compared to their

179、peers.43 Despite increased calls for board diversity and a strong case for the business value of diversity,less than 5 percent of board seats in Fortune 500 companies and C-suite positions are occupied by Latinos.44 In order for their leadership representation to match their share of population,this

180、 number should be four times higher.Targeted interventions could close the gap and ease hardshipsAltogether,54 percent of the wage gap exists in only 4 percent of occupations,compared to 60 percent of the wage gap in 2020,including both the gap in representation as well as pay disparity within occup

181、ations between Latino and non-Latino White workers.These range from sales managers,first-line supervisors,engineers,information technology managers to financial managers,accountants,physicians,and software developersall predominately professional roles that require a degree.45 This representation ga

182、p decreased by 23 percent compared to 40 Illiana Acosta,“Dismantling barriers to career advancement for Latinos,”LinkedIn,September 16,2021.41 Chris Copeland,et al.,“Race in the workplace:The frontline experience,”McKinsey,July 30,2022.42 Lareina Yee,et al.,“Women in the workplace 2022,”McKinsey in

183、partnership with LeanIn.org.,October 18,2022.43 Maria Fernndez-Reino and Ruta Yemane,“Latinos in the United States and in Spain:The impact of ethnic group stereotypes on labour market outcomes,”Journal of Ethnic and Migration Studies,2021,Volume 47,Number 6.44 Sundiatu Dixon-Fyle,Kevin Dolan,Dame Vi

184、vian Hunt,and Sara Prince,“Diversity win:How inclusion matters,”McKinsey,May 19,2020.45 McKinsey calculations using 2020 5-Year estimates,2020 ACS data release,American Community Survey,US Census Bureau.32The economic state of Latinos in the US:Determined to thrive2019 but the wage gap between Latin

185、o and non-Latino workers in similar occupations increased by 7 percent during the pandemic.More Latino workers were hired into these roles,but there was also greater wage disparity between Latino and non-Latino workers.46 The gap needs to be closed:by breaching the gap in Latino representation and w

186、ages due to occupational mix and wage disparity,$281 billion per year in additional income could be enabled,boosting Latino workers annual aggregate income by 34 percent.47 Latinos who reskill and receive support in applying for better-paying jobs may be able to advance more rapidly,invest for the f

187、uture,and increase their resilience to absorb future economic shocks.Latino workers take control of their careersAlthough Latino workers face barriers that non-Latino Whites do not,they can take actions to advance despite these obstacles.Latino workers often have a narrower professional network,and

188、rely more heavily on close friends and family.By seeking out mentors and sponsors within their industry and across industries,they can benefit from guidance and coaching.Such mentors could include people who have enjoyed career success,and ideally they would make mentees aware of scholarships and ot

189、her opportunities that can reduce the financial burden for advanced degrees such as law and medicine.By joining employee resource groups and professional associations,Latinos can also benefit from career development and skills training programs.Companies can also play a role,by offering mentorship a

190、nd reskilling programs,and by ensuring employee resource groups include professional development in their initiatives.Finally,Latinos can commit to mentoring and sponsoring the next generation,passing on their advice and helping others succeed.Latinos are looking for opportunities to make their mark

191、Latinos are eager to advance in their careers and are looking for opportunities to make their mark.Organizations and firms with a long-term vision and commitment to growth,backed by proactive,deliberate,and sustainable actions,are helping them close these gaps.We have outlined four broad opportuniti

192、es where companies are already taking action.Corporations and Latino-focused institutions are partnering to support Latino talent attraction.For example,the Association of Latino Professionals for America(ALPFA)partners with corporations and hosts an annual career convention.This organization,establ

193、ished in 1972,was the first national professional body for Latinos and offers educational support programs,workforce development,and leadership skills development and opportunities.48 According to its website,the ALPFA has more than 100,000 professional and student members across the US,who have acc

194、ess to more than 50,000 paid summer internships via hundreds of Fortune 1000 corporate partners.Latinos are looking to re-skill to advance in their careers.Organizations are offering renewed educational programs with a strong focus on digital and analytics.The Latino Center of the Midlands education

195、al initiatives,such as English-language learning,Spanish literacy,technology basics,and US citizenship preparation,is one such organization that supports Latino workers to land better-paying jobs.49Institutions are also partnering with universities and Hispanic-serving institutions to build a Latino

196、 talent pipeline.Google has partnered with the Hispanic Association of Colleges and Universities(HACU)career readiness initiative.The$2 million investment aims to help Hispanic-serving institutions train 200,000 Latino students in digital skills by 2025 by offering 46 McKinsey calculations using ACS

197、 data survey.This finding may be affected by calculations,which looked at only US-born Latinos and did not consider immigrants.47 McKinsey calculations using 2020 5-Year estimates,2020 ACS data release,American Community Survey,US Census Bureau.48“Connecting Latino Leaders for impact,”Association fo

198、r Latino Professionals for America(ALPFA).49“Cultivating a generation of engaged,thriving Latinos,”Latino Center of the Midlands.33The economic state of Latinos in the US:Determined to thrivea semester-long,in-person and online digital skills program to help students get career-ready.50 And Coca-Col

199、a has long partnered with the Hispanic Scholarship Fund to create scholarships,support educational advancement,and promote higher education.52 Vulnerable workers can benefit from partnerships and initiatives to minimize the impact of economic downturns.United Way of King County in partnership with t

200、he Homeless Employment program at Casa Latina is a non-profit organization advancing the power and well-being of Latino immigrants through employment,education,and community organizing.Jobseekers are put in touch with employers through temporary work,and are often able to graduate to full-time,perma

201、nent employment.53 Latino business owners:Flexing their entrepreneurial muscleLatinos are one of the fastest-growing entrepreneurial groups in the US,despite owning a smaller percentage of US businesses.They are also resilient,demonstrating the ability to recover from disruptions like COVID-19.Latin

202、o entrepreneurs have deep family roots,with a quarter saying they started a business to provide a legacy for their families.However,they experience lower levels of sales and profitability than their non-Latino White counterparts,and receive less funding.Access to capital and better representation in

203、 growing sectors remain some of their main challenges72 percent of business owners rely on personal savings,family,and friends for funding.53 A change in the status quo would be greatly beneficial:if Latino businesses could access capital and expand into lucrative sectors,$2.3 trillion in revenues a

204、nd more than 6.3 million jobs could be added to the economy.54 The Latino business owner:an entrepreneur at heartOver the past two decades,Latinos have become the most entrepreneurial group in the US,with the number of new Latino entrepreneurs increasing by of 3.1 percent every year since 20011.6 ti

205、mes the rate of new entrepreneurs compared to non-Latino Whites.This is equivalent to an 86 percent increase in the rate of new entrepreneurs between 2001 and 2021.55Yet this entrepreneurial spark is not necessarily reflected in business ownership statistics.While Latinos make up 19 percent of the p

206、opulation,they own only 6 percent of the approximately 5.8 million employer firms in the US,and 15 percent of the 26 million non-employer firms or sole proprietors.An accurate demographic representation would see Latinos owning at least three times the number of current firms and creating about 750,

207、000 new employer firms.56 Latino businesses are predominately in lower-growth industries Since 2007 there has been a reasonably stable share of Latino-owned firms across sectors,with growing representation in the construction,accommodation,food services,professional,scientific and technical services

208、,administration,support and waste management,and finance and insurance industries.57 New Latino-owned firms,however,are overrepresented 50 “Grow with Google,”Hispanic Association of Colleges and Universities(HACU).51“Coca-Cola,”Hispanic Scholarship Fund(HSF).52 For further information see Casa Latin

209、a website.53 Ingrid Milln,Nick Noel,Lucy Prez,and Alfonso Pulido,“US Hispanic and Latino lives and livelihoods in the recovery from COVID-19,”McKinsey,September 2,2020.54 McKinsey analysis using“Annual business survey 2019,”US Census Bureau.55“Current population survey,”US Bureau of Labor Statistics

210、,April 2022.56 McKinsey analysis using“Annual business survey 2019,”US Census Bureau.57“Survey of business owners 2012,”US Census Bureau;“Annual business survey 2018,”US Census Bureau;“Annual business survey 2019,”US Census Bureau.34The economic state of Latinos in the US:Determined to thrivein lowe

211、r-growth industries(such as construction,accommodation,and food services)and underrepresented in high-GDP sectors such as real estate,rental and leasing,manufacturing,finance,and insurance.58In addition to the disparity in revenue,Latino employer firms are on average less profitable than their non-L

212、atino White counterpart firms,experiencing lower profitability of six percentage points over the past two years.However,this gap is closing and is down from nine percentage points in 2020.Similarly,the gap between Latino and non-Latino White firms that sustained losses also shrank from 8 percent in

213、2020 to 5 percent in 2021.59 Limited access to capital for business growthLatino businesses face obstacles to growth,with lower approval rates for formal funding,leading 42 percent of Latino business owners to rely on personal savings,family,and friends (Exhibit 9).Latinos also use more credit cards

214、,bank loans,and grants than non-Latino White-owned businesses.60Only 2 percent of venture capital goes to Latino entrepreneurs,although interest is slowly increasing.Investment rates for Latino-founded companies rose only 0.4 percentage points from 2020 to 2021.The total invested venture capital in

215、Latino-owner businesses is 2.4 times what it was in 2020.6158 “Annual business survey 2019,”US Census Bureau;“Gross domestic product by industry group:Level and change from preceding period,”US Bureau of Economic Analysis,2022.59 Marlene Orozco et al.,“2021 state of Latino entrepreneurship,”Stanford

216、 Latino Entrepreneurship Initiative,Stanford Graduate School of Business,January 2022.60 Ibid.61 Janice Bitters Turi,“VC funding to early-stage Latine-founded startups in the US has stalled.Heres why that matters,”Crunchbase News,January 26,2022.Exhibit 942%of Latinos rely on personal savings,family

217、 and friends for funding businesses.42%of Latinos rely on personal savings,family and friends for funding businesses.Funding used to start employer businesses1Top sources of fnancing sought in the last 12 months,a business can use diferent sources.Source:Stanford Graduate School of Business,“2021 St

218、ate of Latino Entrepreneurship”Personal and family savingsBusiness credit cardPersonal credit cardNational bank loan/PPPHome equity loanGrantsEconomic injury disaster loan(EIDL)VCsLocal bank loanAngel investorsPrivate equityOther government-guaranteed loanFamily and friends31%26%24%22%20%12%9%7%7%7%

219、3%3%3%4%3%4%4%4%6%6%8%10%11%16%21%2%Latino-owned businessWhite-owned businessFinancing types35The economic state of Latinos in the US:Determined to thriveWhen Latinos do look for funding,they primarily do so to expand their businesses,pursue new opportunities,or acquire capital assets.This occurs mo

220、re often than their non-Latino White counterparts(57 percent of Latinos compared to 38 percent of non-Latino Whites).62 Generally,46 percent of Latino entrepreneurs decline to apply for further funding(compared to 34 percent of non-Latino Whites),potentially driven by Latino business owners being mo

221、re averse to debt and discouraged by prior negative experiences.65 This has resulted in lower levels of debt,with 71 percent of Latino-owned firms shouldering less than$100,000 debt.64 Nonetheless,Latinos are approved for funding less often than non-Latino Whites.They are particularly penalized in m

222、ost traditional funding types.Their approval rates are 25 percentage points below those of non-Latino Whites in factoring,15 percentage points in local banks,and nine percentage points in private equity.65 Weathering the COVID-19 storm:Resilience during the pandemicThe COVID-19 pandemic impacted bus

223、inesses across the world,and Latino-owned firms were no exception.More than 60 percent of Latino-owned businesses had to reduce or modify their business operations during the pandemic.Of these,60 percent saw total sales drop by more than a quarter for 2020.Moreover,30 percent of them were unlikely t

224、o survive without additional government assistance.Other minority-owned businesses had a similar experience,with 65 percent of Black-owned and 69 percent of Asian-owned businesses losing sales at the same rate,and 35 percent of Asian businesses requiring additional government support.Despite the har

225、dships,Latino businesses have shown signs of resilience,with 42 percent expected to have returned to sales levels of 2019 in the second half of 2021,and another 22 percent expecting to do so during 2022 or later(Exhibit 10).66 Closing the gaps:An opportunity to add trillions of dollars in revenue an

226、d create millions of jobsLatino employer firms are fewer in number and smaller in size than those of non-Latino Whites,resulting in a$2.3 trillion revenue gap and the opportunity to generate 6.3 million jobs.67 They earn$450 billion,about half the revenue of non-Latino White firms.Based on Latinos s

227、hare of the population(19 percent),there should be three times as many Latino business owners.Instead,Latino-owned businesses make up only 6 percent of the total.Currently,Latino employer firms generate on average only$1.6 million in revenue per firm.Their relative underperformance results from a gr

228、eater concentration in lower-growth industries and less revenue generation,with less profitability than non-Latino White-owned peers.Just four industrieswholesale and retail trades,manufacturing,and constructionaccount for almost two-thirds($1.2 trillion)of the revenue gap between Latino and non-Lat

229、ino White businesses,or$794 billion per firm.If this gap were closed,there would be an extra 750,000 businesses,and overall,Latino firms would be stronger,more resilient,and would create millions more jobs.6862 Ibid.63“Small business credit survey 2021,”Fed Small Business,2021.64 Ibid.65 Marlene Oro

230、zco et al.,“2021 State of Latino entrepreneurship,”Stanford Latino Entrepreneurship Initiative,Stanford Graduate School of Business,January 2022.66“Small business credit survey 2021,”Fed Small Business,2021.67 McKinsey analysis using“Annual business survey 2019,”US Census Bureau.68 McKinsey analysis

231、 using“Annual business survey 2019,”US Census Bureau.36The economic state of Latinos in the US:Determined to thriveExhibit 10While Latino-owned firms were impacted by the pandemic in line with other minority firms,had their sales back to normal by mid 2021.minority frms,had their sales back to norma

232、l by mid 2021.Expected timing of sales return to“normal”(i.e.2019 levels)1,2,3,(%of employer frms)Likelihood frms will survive without additional government assistance until sales return to normal1,2,%of employer frms for which sales had not yet returned to normal1Percentages may not sum to 100 due

233、to rounding.2Data on sales recovery and frm survival expectations were drawn from questions in the optional end-of-survey module(completed by approximately 80%of respondents).This subset of respondents is re-weighted to be refective of the overall small-frm population.3At time of survey,September th

234、rough October 2020.Source:“Small business credit survey 2021,”Fed Small Business,2021Already normal/end of 2020BlackN=726HispanicN=535AsianN=388WhiteN=4,571First half of 2021Second half of 20212022 or later4%9%16%17%15%19%20%17%14%13%11%19%13%29%28%22%14%30%20%16%18%21%32%17%11%34%20%14%43%42%41%38%

235、20%22%29%52%AsianBlackHispanicWhiteVery unlikelySomewhat unlikelyNeither likely or unlikelySomewhat likelyVery likelyWhile Latino-owned frms were impacted by the pandemic in line with other minority frms,had their sales back to normal by mid 2021.Expected timing of sales return to“normal”(i.e.2019 l

236、evels)1,2,3,(%of employer frms)Likelihood frms will survive without additional government assistance until sales return to normal1,2,%of employer frms for which sales had not yet returned to normal1Percentages may not sum to 100 due to rounding.2Data on sales recovery and frm survival expectations w

237、ere drawn from questions in the optional end-of-survey module(completed by approximately 80%of respondents).This subset of respondents is re-weighted to be refective of the overall small-frm population.3At time of survey,September through October 2020.Source:“Small business credit survey 2021,”Fed S

238、mall Business,2021Already normal/end of 2020BlackN=726HispanicN=535AsianN=388WhiteN=4,571First half of 2021Second half of 20212022 or later4%9%16%17%15%19%20%17%14%13%11%19%13%29%28%22%14%30%20%16%18%21%32%17%11%34%20%14%43%42%41%38%20%22%29%52%AsianBlackHispanicWhiteVery unlikelySomewhat unlikelyNe

239、ither likely or unlikelySomewhat likelyVery likely37The economic state of Latinos in the US:Determined to thriveTaking Latino businesses to the next level Latino entrepreneurs can unlock even more potential with targeted structural interventions that are accessible and appropriate,such as the three

240、listed below.PepsiCo is accelerating Latino business growth through a$50 million program.Juntos Crecemos aims to boost Latino-owned businesses over the next five years through donations,tailored curricula,and support.PepsiCo also launched the Impacto Hispanic Business Accelerator,which provides$10 m

241、illion in funding to help 500 Latino small-food and beverage business owners recover from COVID-19.69 Telecommunications giant T-Mobile partnered with non-profit advocacy group UnidosUS to launch a digital literacy and job readiness toolkit to address the increase in online shopping.The kit helps La

242、tino entrepreneurs harness the power of digital technologies to run their small businesses more effectively.70Further focusing on technology,Google and the United States Hispanic Chamber of Commerce are highlighting Latino entrepreneurial excellence.The two organizations joined forces to create a La

243、tino-owned attribute available across Google Search,Maps,and Shopping,as well as financial support and skills training for business owners.Latino-owned businesses on Google are now identifiable as such,which encourages people to support them.71Retailers have recognized the value of this tailored app

244、roachTarget celebrated Latino heritage month with the launch of its Ms Que collection,which featured more than 90 products,mostly created by Latino companies and designers,that pay homage to the rich heritage and diversity of Latino culture.72 Coca-Cola has also supported Latino heritage,this year a

245、nnouncing a$150,000 donation to the Hispanic Heritage Fund in partnership with iHeartMedia to create year-round programs promoting Latino culture and accomplishments.73 The company has also donated$2 million in support of The Smithsonians National Museum of the American Latino and Molina Family Lati

246、no Gallery in Washington,DC.This is The Smithsonians first gallery dedicated to Latino contributions to the US,and will preview the National Museum of the American Latino,which will explore Latino achievements in art,history,culture and science.74Latino entrepreneurs can unlock even more potential w

247、ith targeted structural interventions that are accessible and appropriate,such as the three listed below.69“PepsiCo launches$50 million Juntos Crecemos platform to support Hispanic-owned businesses across the US,”PRNewswire,August 2021.70“T-Mobile enhances partnerships with LULAC and UnidosUS to bri

248、ng digital literacy resources to Hispanic communities,”T-Mobile,August 2021.71 Ramiro Cavazos,“Abriendo caminos:New pathways for Latino-owned businesses,”Google,September 2021.72“Celebrating the creators,artists,and founders behind Targets 2022 Latino heritage month collection,”AzFa,September 2022.7

249、3“The Coca-Cola Company and iHeartMedia announce a$150,000 donation to Hispanic Heritage Foundation in support of Latino culture and youth programs,”Hispanic Heritage Foundation,September 22,2022.74“The Coca-Cola Company donates$2 million to National Museum of the American Latino,”Coca-Cola,May 2,20

250、22.38The economic state of Latinos in the US:Determined to thriveLatino savers:Slowly shifting from surviving to thrivingWhile Latinos share of the population and workforce continues to grow,their financial safety is not keeping pacecurrent high inflation,coupled with the impact of the COVID-19 pand

251、emic,has exposed their vulnerabilities.Latino savers have only a fifth of the median wealth of their non-Latino White counterparts,their savings have been depleted,and their purchasing power has dropped.Their participation in assets that accumulate wealth is also lagging,particularly in real estate

252、and retirement savings.In fact,almost half of Latinos have no retirement savings.75 It is no surprise that only 23 percent of Latinos are considered financially healthy in 2022 compared to 35 percent of non-Latino Whites.76Nevertheless,signs are encouraging as Latinos net wealth is increasing at a f

253、aster rate,from 14 percent(2013-2016)to 21 percent(2016-2019),narrowingbut not yet closingthe gap with non-Latino Whites.77 If the trend continues,Latino households could reach an average net worth of$47,000 this year.However,tight budgets and greater exposure to inflation,with first-generation save

254、rs particularly vulnerable,present serious challenges.While Latinos have about half as much debt as non-Latino White counterparts,this may be because they find it difficult to access appropriate financial products.78 Latinos are 1.7 times more likely than non-Latino Whites to be turned down for a lo

255、an,and 30 percent are unbanked or underbanked compared to their non-Latino White counterparts.79 Steady household wealth off a low baseLatino household wealth represents only 3 percent of total US household wealth,at$3.9 trillion out of$134 trillion.This lower share is driven by lower participation

256、in assets that accumulate wealth over time,particularly real estate and the stock market.However,it has seen high growth over the past decade.80COVID-19 and recent inflationary pressures have hit Latino families hard,but first-generation ones have been more affected than those of US-born Latinos.Alt

257、ogether,immigrants suffered a significant decrease in wealth since last year,potentially due to job loss or higher pay cuts,which decreased their assets and increased debt.In contrast,the assets of third-generation Latinos increased by 21 percent in 2021.81 75“2021 retirement confidence survey,”Empl

258、oyee Benefit Research Institute,2021.76 Wanjira Chege,Necati Celik,Andrew Dunn,and Andrew Warren,“Financial health pulse:2022 trend report,”Financial Health Network,2022.77“Consumer finances survey 2019,”Federal Reserve,2019(median net worth).78“Consumer finances survey 2019,”Federal Reserve,2019(as

259、sets and liabilities).79“Economic well-being of US households in 2020,”Federal Reserve,May 2021.80“Consumer finances survey 2019,”Federal Reserve,2019.81“Consumer survey,”McKinsey,August 2022(n=4,400);McKinsey Global Institute analysis;McKinsey Institute for Latino Economic Mobility analysis.39The e

260、conomic state of Latinos in the US:Determined to thriveLatinos relatively low asset value,lower incomes,and tighter budgets may indicate greater financial strain,which leads them to prioritize immediate needs over savings(Exhibit 11).In fact,47 percent of Latinos consider helping friends and family

261、more important than saving for retirement(compared to 35 percent of non-Latino Whites).Overall,47 percent of Latinos have no savings compared to 38 percent of non-Latino Whitestranslating into an approximate$77 billion gap in aggregated disposable savings between Latinos and non-Latino White househo

262、lds.82COVID-19 and inflation have eaten into savingsThe future looks uncertain:a quarter of Latinos depleted their savings during the COVID-19 pandemic,leaving 27 percent of households with nothing to fall back on.The disproportional impact of inflation added to the inability to save,and strongly af

263、fected prices in categories that make up the most significant share of expenses,such as transport,housing,and food.83 Higher inflation has also resulted in Latinos decreasing their contribution to assets and liabilities.Having used up their savings during the pandemicperhaps to keep businesses afloa

264、tLatinos are expected to contribute 3 percent less to assets in the coming years than they used to;unlike non-Latino White counterparts who do not expect to reduce their contributions.The most significant trade-down will be an 8 percent reduction in Latinos investments in cryptocurrency and 6 percen

265、t in checking and savings accounts.Furthermore,Latinos plan to reduce their debt payments by 4 percent and personal loans by 9 percentreducing day-to-day expenditure but keeping them in debt for longer.84 And with 60 percent of Latinos having no retirement accounts because of a shortage of savings,t

266、hey face an unsure future.85 82“Consumer expenditure survey 2021,”US Census Bureau,US Bureau of Labor Statistics.83“Consumer price indexSeptember 2022,”Bureau of Labor Statistics,US Department of Labor,October 13,2022.84“Consumer survey,”McKinsey,August 2022;McKinsey Global Institute analysis;McKins

267、ey Institute for Latino Economic Mobility analysis.85“Consumer survey,”McKinsey,August 2022;McKinsey Global Institute analysis;McKinsey Institute for Latino Economic Mobility analysis.Higher inflation has also resulted in Latinos decreasing their contribution to assets and liabilities.40The economic

268、 state of Latinos in the US:Determined to thriveFewer places to put their money Limited access to financial products further hinders Latinos financial health.They face a significant gap in asset diversity and total value compared to their non-Latino White counterparts,exacerbated by their lower inco

269、me levels(Exhibit 11)and lower rates of home ownership.86 Latino adults remain underserved by financial productsthey are three times more likely not to have bank accounts,and they are 2.3 times more likely to be underbanked than their non-Latino White counterparts,relying on alternative financial se

270、rvices such as payday loans,money orders,and pawn shops.87 Affordability,lack of service,and poorly targeted advertising are all reasons why Latinos might not have bank accounts.88 In addition,those who do have bank accounts are slightly less satisfied with their products compared to non-Latino Whit

271、es,facing greater difficulty accessing the features they need and finding branches with convenient opening hours.Financial institutions can do more to educate potential investors and savers.The proportion of Latino investors in stocks and bonds is increasing,but remains small.While a third said they

272、 couldnt afford to invest in bonds,stocks,mutual funds,or exchange-traded funds,more than half of Latinos said they didnt know what these products were,didnt know how to invest in them,or had not considered these investments.Currently,just over a third of Latinos hold investment products,from 20 per

273、cent in 2021.These figures suggest that financial services companies could benefit from tailoring their products to Latinos.Exhibit 11Low participation in wealth accumulating assets for Latino households is driven by lower incomes and tighter budgets.Low participation in wealth accumulating assets f

274、or Latino households is Average annual household income vs.consumption,$k19.7M Latino consumer units(Consumer Expenditure Survey 2021)x($4k diference in savings of a White household vs a Latino household).Source:“Consumer expenditure survey 2021,”US Census Bureau,US Bureau of Labor StatisticsWhiteHH

275、LatinoHH$96.012%75%14%13%85%2%$68.0Gap in aggregate disposable savings among Latino and White households$77BSavingsIncome consumedTax86“Consumer finances survey 2019,”Federal Reserve.87“Economic well-being of US households in 2020,”Federal Reserve,May 2021.88 Ibid.41The economic state of Latinos in

276、the US:Determined to thriveHowever,Latino investors show a higher preference for cryptocurrency than the general US population,possibly due to the high adoption of cryptocurrency in Latin American countries or a lack of trust in traditional financial systems.89 One in four cryptocurrency owners is L

277、atino,and 21 percent reported that they have invested in,traded in,or used this currency.Less debt,fewer credit options,and higher costs As shown in Exhibit 12,Latinos have half as much debt as non-Latino Whites do but,as is the case with Latino business owners,are almost twice as likely to be turne

278、d down for credit.They have fewer mortgages and student,or similar,personal loans,but more credit cards.Latinos generally have fewer outstanding personal loans by income bracket than non-Latino Whites,either because they had not considered applying,or because interest rates were too high.90 Their me

279、dian debt amount is$40,000 and is primarily concentrated in mortgages.Latinos are less likely to own a home.91 Their median household income($55,000)is 20 percent lower than the minimum salary($68,008)needed to afford median-priced homes.92 As a result,they have high costs for housing,but less oppor

280、tunity to build their wealth,and experience twice as many mortgage denials as non-Latino Whites.93 However,those who do have mortgages show different payment patterns to non-Latino Whites.In 2021,Latinos paid 5 percent more of their outstanding mortgage balances than their non-Latino White counterpa

281、rts.Thirty-four percent of Latino home borrowers use alternative financing with higher costs,such as personal property loans or rent-to-own,compared to 89“Consumer survey,”McKinsey,August 2022;McKinsey Global Institute analysis;McKinsey Institute for Latino Economic Mobility analysis.90“Consumer sur

282、vey,”McKinsey,August 2022;McKinsey Global Institute analysis;McKinsey Institute for Latino Economic Mobility analysis.91“Consumer finances survey 2019,”Federal Reserve.93 Ibid.93“Homeownership rate in the United States,”US Census Bureau,FRED,Federal Reserve Bank of St Louis,October 16,2022.Exhibit 1

283、2Latino families asset participation and value is lower than that of non-Latino White families.Latino families asset participation and value is lower than that of non-Latino Families holding asset(%)Median value of asset($k)1Median total asset value is not the sum of the median value of each asset c

284、ategory.2Cash value.3Includes installment loans of all types.Median total liability value is not the sum of the median value of each liability category.Source:“Consumer fnances survey 2019,”Federal ReserveWeb 2022Emerging cautiously:Australian Consumers in 2022Exhibit 2 of 10MortgagesLatino321311382

285、3318791828803110306281551721740230200441420504552517278487499962657621246199100WhiteLatinoWhiteStudent loansCredit cardPersonal loansHousing assetsTransaction accountsRetirement accountsLife insuranceStock holdingsTotal assetsTotal liabilities42The economic state of Latinos in the US:Determined to t

286、hrive19 percent of non-Latino Whites,and pay on average 30 percent more for home purchase loans.94 Healthier debt profiles may count against Latinos,as a lower penetration of financial products lowers their credit rating.In total,16 percent of Latinos are credit invisible as they have no credit hist

287、ory or accounts to calculate a credit score.95 They could be further disadvantaged by a lack of financial literacy,debt-to-income ratio,and lack of collateral.As a result,they have significant personal finance needs that are going unmet,and financial institutions with tailored products may be able t

288、o better meet the needs of Latinos.Latinos have the lowest educational attainment of all major racial/ethnic groups in the US population,and therefore have less student debt 14 percent of Latino families have educational installment loans versus 20 percent of non-Latino White families.Those who do t

289、ake out loans apply for lower amounts($18,000 compared to the$27,000 median student loan).In a survey of students who did not complete college,almost half of Latinos dropped out to avoid more debt(compared to about 40 percent of non-Latino Whites).96Altogether,20 percent of Latinos expressed their d

290、issatisfaction with current financial or savings product offerings.Some of the main reasons they gave for this include:prices being too high(26 percent);not having enough money to invest(23 percent);and feeling that companies are not committed to addressing social inequities(13 percent).Despite bein

291、g severely impacted by the economic downturn,Latinos indicate that they would pay approximately 16 percent more on average for better offerings.Satisfying their needs could increase their$208 billion balance by about$21 billion.97 Promoting resilience with financially inclusive interventions:What or

292、ganizations are doing Latinos are looking for financially inclusive solutions that allow them to invest effectively and ensure a stable future.Three interventions can support them to meet this need.Credit unions focusing on the financial needs of Latinos and immigrants,such as Juntos Avanzamos,prese

293、nt in 26 states,provide a valuable service.Juntos Avanzamos based its financial products and services on their Latino customers needs.Customers learn to navigate the US financial system and have the tools they need to reach their savings goals,such as financial literacy and taxpayer identification t

294、ools.98 Predatory lending education and financial planning resources can support Latinos to smooth out income volatility.For example,Latinos using the bilingual digital platform FinHabits can access wealth-building tools,savings,and investments,and are offered long-term financial planning.The online

295、 investing service is designed for first-time savers,focusing on simplicity and access.99 Retirement benefits could be provided to more workers.The Latinos for a Secure Retirement coalition aims to empower Latino communities to become economically secure.They provide the tools,resources,and advocacy

296、 to improve retirement security for current retirees and ensure retirement security for both this and future generations.10094“Millions of Americans have used risky financing arrangements to buy homes,”The Pew,May 23,2022.95 Mike Hepinstall,et al.,“Financial inclusion and access to credit,”Oliver Wy

297、man,January 12,2022.96 Robert Agans,Jess Dorrance,and Kate Salosky Elengold,“Debt,doubt and dreams:Understanding the Latino college completion gap,”University of North Carolina and Unidos,November 2020.97“Consumer survey,”McKinsey,August 2022;McKinsey Global Institute analysis;McKinsey Institute for

298、 Latino Economic Mobility analysis.98“Helping you reach your financial goals,”Juntos Avanzamos.99“Heres what every Latino should know about investing,”FinHabits.100 For more information,see Latinos for a Secure Retirement website.43The economic state of Latinos in the US:Determined to thrive44The ec

299、onomic state of Latinos in the US:Determined to thrive4.Actions to support Latino economic mobilityLatinos play a crucial role in the US economy and currently account for a$1 trillion market,despite being challenged by lower-paying jobs,less education,and the bias they face from neighbors,co-workers

300、,and employers.Over the past year,it has become clear that Latinos,for various reasons,are also uniquely vulnerable to income disruption and predatory lending and are likely to curtail their spending more sharply than other groups.By acting now,Latinos can be supported through instability while buil

301、ding their resilience to deal with future shocks.They have already demonstrated resourcefulness,hard work,and creativity;now,by acting in their favor,companies can remove barriers to full economic participation.Two types of actions are needed.Committing to structural interventions that allow Latinos

302、 to compete on a more even field would build a fairer and more prosperous economy to help them close the gap in income and consumption levels.But at the same time,immediate,tactical interventions are needed now to protect Latinos as they manage tighter budgets and resources.Our previous report,publi

303、shed last year,remains relevant as it highlighted a large and growing minority who in many ways embody the American dream of equal opportunity,rewards for hard work,and rising prosperity over generations,but for whom that dream was deferred.Since then,for many Latinos,the situation has worsened as t

304、he impact of inflation further strains resources and budgets.Issues such as wage disparity,lower representation in higher-paid positions,access to capital for business owners,and a lack of willingness to invest in these businesses continue to headline in the 2022 report.As a result,the structural re

305、commendations we proposed in 2021,such as better compensation and reskilling for workers,increasing access to capital,and financial inclusion to boost Latinos wealth-building,are more urgent than ever.These should be coupled with short-term interventions that respond to the current economic instabil

306、ity.By acting now,Latinos can be supported through instability while building their resilience to deal with future shocks.45The economic state of Latinos in the US:Determined to thriveBoxThe cumulative cost of hardshipOver the course of the report,we have identified sizeable gaps in opportunity,reve

307、nue,and spending between Latinos and non-Latino Whites,which together impact the wealth of Latino savers.Less money in means less money out.Latino workers receive$281 billion less than non-Latino Whites,as they are more likely to work in lower-paid jobs and be paid less than non-Latino White peers.1

308、 Latino businesses make half as much revenue as non-Latino White businessesagain,as they are concentrated in lower-performing industries,with less access to capital,and are smaller in size.Additionally,there are fewer Latino-owned businesses than would be expected based on their share of population,

309、which deepens the divide and results in a revenue gap of$2.3 trillion.2This lower income relative to population,among other reasons,results in a consumption gap of$554 billion between Latino households and non-Latino White counterparts.However,despite this lower overall consumption,Latinos are a for

310、midable force in the marketplace.Latino households spend more than their non-Latino White counterparts at the same income level,yet their needs are not being met by brands to the same extent as non-Latino White households.Mind the gaps:Six ways to boost Latino prospectsAcross the four lenses of Lati

311、nosworkers,savers,business owners,and consumersthe right combination of structural and immediate interventions could help Latinos on the path to economic advancement and prosperity;actions that will hugely benefit the country.These interventions were explored in our 2021 report and included improvin

312、g access to education,creating targeted products and service offerings,increasing access to capital,and reducing and mitigating biases.101 By building on these interventions,and by addressing the need for improved representation across society,it is possible to find ways to kickstart Latinos journey

313、 to prosperity.Representation:unlocking decision-making powerLatinos remain underrepresented in the boardrooms and C-suites of the most powerful companies in the US,making it more likely that decisions around product development,marketing,and supply chains overlook the needs of this key population.C

314、ompanies who are serious about more representative leadership can set targets for inclusion with strategic interventions to develop a pipeline of Latino talent.Gender inclusion programs designed with intersectionality in mind will help ensure Latina and Black women are not left behind in the efforts

315、 to advance female leadership.Building more representative leadership also requires more inclusive workplaces;to that end,the interventions aimed at promoting Latino workers are also needed to achieve this goal.101 Ana Paula Calvo,Michael Chui,Lucy Prez,and Bernardo Sichel,“The economic state of Lat

316、inos in America:The American dream deferred,”McKinsey,December 9,2021.1 McKinsey calculations using 2020 5-Year estimates,2020 ACS data release,American Community Survey,US Census Bureau.2“Annual business survey 2019,”US Census Bureau.46The economic state of Latinos in the US:Determined to thrive Ed

317、ucation and re-skilling:the key to workers progressLatinos are already at a disadvantage with lower education levels than other groups.They can raise their incomes and flatten structural hurdles with greater access to education.Workers can seek out opportunities to learn new skills and access mentor

318、ship and apprenticeship to support their career development.Structural interventions could include:Supporting Latinos to re-skill into higher-paid occupations.Providing resources to build strong Latino affinity or networking groups that create mentorship and sponsorship for Latino workers.Other acti

319、ons include increasing Latino access to higher education and digital technologies,identifying and solving potential skills gaps,and focusing on recruiting more Latino talent.Committing to more diverse representation in leadership and at work,including greater Latino representation,allows for richer

320、experiences and more inclusive decision-making within companies,which ultimately impacts the range of goods and services offered to consumers.Rapid remedies,mainly focusing on the impact of COVID-19 and inflation,could include:Augmenting structural interventions with shorter-term and affordable resk

321、illing and education programs to help Latinos embrace new careers in digitalization,food,goods delivery,or logistics,including resources for the changing professional needs due to inflation and COVID-19.Stakeholders could also explore how to invest in giving Latinos access to digital technologies.Pa

322、rtnering with universities and Latino-serving institutions to strengthen a pipeline for Latino talent.Designing programs that minimize vulnerabilities,such as free capability-building programs,to reskill workers in professions affected by COVID-19Building a future:Providing relevant financial produc

323、ts and servicesLatinos have tighter household budgets,struggle to save for retirement and improve their asset base and have had to dip into savings to a greater extent than their peers.Designing and delivering products that meet their needs for value,flexibility,and cost will support their financial

324、 health.Structural interventions to improve products and services could include:Offering flexible investment and saving products that will address Latinos immediate needs as well as their future prosperity.Retirement and other financial benefits could be added to work plans to entice savers.Potentia

325、l rapid remedies to protect against income volatility could include:Saving strategies and programs aimed at Latino students would support them to make prudent financial decisions as they enter the workforce.Providing financial education on credit scores,retirement opportunities,investment,and budget

326、ing to ignite savings and investment.Latinos could protect themselves against predatory lending and high interest rates with such programs.Reworking financial institutions footprints to ensure consumers retain access even in banking deserts.102102 Banking deserts are defined as census tracts in stat

327、es that have an above-average proportion of unbanked individuals,as measured by the Federal Deposit Insurance Corporation.Source:Donald P Morgan,Maxim L Pinkovsky,and Bryan Yang,“Banking deserts,branch closings,and soft information,”New York Federal Reserve,March 7,2016.47The economic state of Latin

328、os in the US:Determined to thriveValue and quality:The new gold standard for Latino consumersLaino consumers are unhappy with the products offered to them,with affordability,value,and quality being the main drivers of this dissatisfaction.By addressing the reasons for dissatisfaction,companies can s

329、upport their needs and potentially increase their own market share as consumers are more likely to switch brands during this time.Companies that look to add or retain new potential customers changing their behavior could consider a price-first or value-driven marketing strategy,including the followi

330、ng:Optimizing value propositions,including private-label goods,that would help retain customers severely hit by the economic downturn.Investing in a better understanding of Latino customers and their preferences.Companies that invest in understanding the Latino consumer can develop segmented product

331、 marketing strategies and ensure that their products are appealing,with high-quality,health,and sustainability differentiators.In many cases,this could mean modifying existing products to appeal to Latinos.Using channels Latinos prefer and designing policies to shield the consumer from rising prices

332、,especially on basic or essential products,could also help meet their needs.Investing in tailored offerings such as food with flavors from Latin American countries and makeup with a range of tones that match the diversity of Latino population,among others,to meet the shifting needs and preferences o

333、f Latino consumers.Organizations can also support the most vulnerable consumers by catering to previously underserved populations in the channels they prefer,and by shielding consumers from price increases on basic products.Money matters:Increasing access to capital and opening business opportunitiesWhile Latino-owned businesses have shown relative resilience,many could do with additional support.