A few days ago the Federal Reserve (Fed) admitted that the US is heading towards a recession. Markets and society reacted quickly. Although this economic event affects anyone, because of its characteristics, the Latino community will face the greatest challenges.
According to 2020 census data, people of Latino descent represent 18% of the total population of the United States, which is approximately 62.1 million Hispanics. It is the second largest racial or ethnic group in the country after non-whites.
After months of denial, the Fed acknowledged that the prospect of a US recession is getting closer. The central bank clarified that its impact would not be that deep in the short term, which is why they estimated it could last for about two years.
A recession is a downturn in a country’s economy and the most obvious sign that this is happening is unemployment. Since the beginning of the year, large companies have announced waves of layoffs. And we’re going to say something that many of us know, but not all of us dare to say openly: Discrimination in America cost minority groups, especially African-Americans and Latinos, their jobs. most likely to lose.
According to the Pew Research Center, 76% of Latinos say they have faced discrimination or been treated unfairly because of their ethnic or racial origin. This is manifested in acts of racism, xenophobia, police violence, deportations and immigration restrictions that affect their civil and human rights.
Between 2010 and 2020, the GDP of Latinos in the United States was the third fastest growing of the ten largest in the world, and according to the Latino GDP report, if they had their own country they would be the fifth largest in the world. There would be economy. US LDC 2022 Latino Donor Collaborative. The US produced $20.9 billion domestically, of which $2.8 billion was generated by Hispanic workers.
Despite the contribution of the Latino community, in September of last year, experts at Wells Fargo indicated that, in the event of a moderate recession in 2023, Hispanic workers in the US would be among the groups most affected by unemployment.
“If our forecast for a modest recession in 2023 proves correct, Hispanic workers will be disproportionately affected,” the Wells Fargo report said.
Analysts at this financial institution indicated that Hispanic unemployment tends to increase significantly during periods of low economic performance in the US. ,
How a Recession Will Affect the Latino Community in the United States
Based on current data, the Latino community will be one of the population segments most affected by the recession in the United States. But there are several ways in which this phenomenon can increase the financial shortfall of these people in the country:
1. High Unemployment
According to the Bureau of Labor Statistics (BLS), the unemployment rate for Latinos rose from 4.8% in February 2020 to 18.9% in April of the same year, the ethnic group most affected by job losses due to the recession. Epidemic. Although the rate is slated to drop to 7.9% by October 2022, it is still higher than the national average of 6.9%.
2. Housing unaffordability
According to the US Census Bureau, 47% of Latinos rent, making them more vulnerable to eviction or rent increases. In addition, 21% of Latinos live in conditions of overcrowding or extreme poverty, which affects their quality of life and mental health.
3. Poverty
According to the US Census, 18% of Latinos live below the poverty line, meaning they do not have enough income to meet their basic needs. In addition, 12% of Latinos live in a state of food insecurity, meaning they do not have access to sufficient or nutritious food. With a recession, these numbers could rise significantly, even if it lasts for two years, as the Fed noted.
4. More vulnerable to health problems
Pandemic is an example of this. According to the Centers for Disease Control and Prevention (CDC), Latinos are more likely to suffer from chronic diseases such as diabetes, high blood pressure and obesity, which increase the risk of complications from COVID-19. In addition, 19% of Latinos do not have health insurance, making it difficult for them to access preventive and curative health services. And like a domino effect, lack of access to healthcare will result in higher medical debt.
5. Educational backwardness
According to the Pew Research Center, 59% of Latinos over the age of 25 do not have a college degree, which limits their job opportunities and salary. In addition, 25% of Latinos between the ages of 18 and 24 are not enrolled or working in an educational or employment institution. The educational gap will increase.
