Friday, October 30, 2020

Supporting Latinas can fuel economic growth and help the US rebuild post-COVID-19. Here are 3 ways to start.

Written by: Beatríz Acevedo. 

The US economy is floundering as others rebound quickly. We're struggling just to return to where we were a few months ago. But is that enough?

Of course not. Recovery isn't sufficient. We have to reimagine. This COVID-induced catastrophe presents an opportunity for a stronger, fairer, and more prosperous America. We can speed the process of regrowth in the short term and rebirth in the future by turning the economic potential of an underestimated, overlooked group of Americans into economic activity. 

That group is Latinas.

Helen Torres, CEO of HOPE (Hispanas Organized for Political Equality) argues that their new study shows that female Hispanics are uniquely positioned to power the engine of economic growth and create a more vibrant, prosperous America.

To date, Latinas have been excluded from full participation in our financial system, with fewer opportunities to invest and to save; fewer assets that drive wealth creation like homes, inheritances, retirement accounts and stocks; and less basic financial education. This constrains their growth and limits their potential.

Unleashing that potential will rebuild our faltering middle class, provide disproportionately large economic returns in the near term and the future, and help to eliminate the racial and class tensions that poison our current conversation.

This isn't a social-justice argument (though I could certainly make one.) This is about numbers. Latinas will drive economic growth for a number of reasons. 

There are a lot of us.

Latinas are about 9% of the population, rising to over 13% by 2060. We are the largest growth cohort in the U.S., so any improvement in our economic condition produces large improvements for everyone in our country. 

We are young.

The median age of US-born Latinas is 19 compared to 45 for White women. So we're able to take more risks, aim higher, and our economic contributions will continue to grow longer into the future. Supporting Latinas now will produce the best results — the longer we wait, the less impact we'll have. 

We are entrepreneurial.

Latinas opened 2.3 million new firms nationwide between 2014 and 2019. That's 18% of all women-owned businesses in that period. We also grow quickly: we increased employee headcount by 30% in that period, so we're creating lots of new jobs. Supporting the transition from microbusinesses to larger enterprises will increase economic activity and create even more jobs. 

We have a large gap between actual and potential performance. 

Latinas currently earn about 54 cents for every white male dollar — the least of any demographic. This is deplorable. But it also means that every dollar deployed to a Latina goes almost twice as far. In the short term, investing in Latinas is cost-effective and produces greater lift. In the long term, as Latinas approach pay parity — and we must — we'll generate more revenue, more taxes, more spending and more saving. 

We have the power of the purse.

Latinas control 75% of household and discretionary spending in Latino homes. Given that by 2024 Hispanic buying power will be a projected $2.34 trillion, the benefits of financial education and access to investment resources are obvious.

Long story short, empowering Latinas economically is how we're going to grow the economy more quickly and build a new way forward. Small investments in each of three categories will produce large returns for all Americans.

Here are the actions we should take.

  • Require Latina-specific student aid from Federal and State governments. More Pell Grants, more Work Study programs, less discrimination in providing them.
  • Deploy Reach-and-Teach programs to proactively provide culturally-relevant Financial Basics education. Push the info out to Latinas, don't make them come find it.
  • Develop community support. Create Latina-to-Latina peer networks for financial tutoring, mentoring and advice. 
  • Create Latina-specific Federal microloans and direct grants.
  • Fund studies through Q2 2021 on the Latina Pay Gap, then start fixing it in Q3.
  • Pressure banks to make more microloans to more Latina businesses.
  • Demand more local and state support for organizations that provide grants and loans to Latina microbusinesses.
  • Mandate fair access for all to bank accounts and investment vehicles.Support:
  • Organize social campaigns to pressure companies to sign the "Equal Pay Pledge."
  • Finally fix healthcare. Everyone benefits from this, but freeing Latinas in particular from these expenses allows them to reinvest the savings in economic growth.
Empowering Latinas to propel themselves to greater economic achievement propels us all. We've got a lot of work to do. Let's get to it.

Beatríz is a three-time Emmy award-winning producer, community builder, entrepreneur and philanthropist. At SUMA Wealth, she's promoting financial inclusion by engaging, educating and empowering US millennial Latinos to close the wealth gap. Her previous startup mitú continues to be the leading digital media brand for that audience. Beatríz sits on numerous boards and advisory boards lending her unique cultural insights to The LA2028 Olympics, Annenberg Foundation's PledgeLA, Delta Airlines, The Latino Community Foundation, Homeboy Industries, 9th Wonder, Latino Donor Collaborative, LA Collab, Pocketwatch and Encantos Media. She is an advisor to the Mayor of Los Angeles, Eric Garcetti, as part of his Tech Council, and recently featured in Inc's Top 100 Women Entrepreneurs of 2020 list, and Ellevest's 14 Latinx Women+ Disrupting Money and Fighting for Equality.

This is an opinion column. The thoughts expressed are those of the author(s).

Why Closing The Wage Gap On Latina Equal Pay Day Is A Win For Us All

Written by: Holly Corbett

Today is Latina Equal Pay Day, which marks how far into the year the average Latina must work to make what the average white, non-Hispanic man made the previous year. It’s 2020 and Latinas still make just 55 cents on the dollar compared to white men, and the gap widens for Latinas with higher education levels, according to That translates to more than $1 million in lost paychecks of the course of her career.

Here are some reasons why this wage gap exists, how it harms families and the economy—and ideas for closing the gap for good.

Latina women may have been taught to stay quiet. There are many factors that contribute to the wage gap, including gender and racial bias. There are also cultural nuances that may prevent Latinas from speaking up. “There is a saying in Spanish, ‘Calladita te ves mas bonita,’ which translates to, ‘If you’re quiet, you look prettier,’” says Yai Vargas, founder of The Latinista, a national network for Latinas and women of color.

The notion that women and girls should stay quiet may have some historical roots. “In this country, people rarely talk about the history of people who are not Black or white. We don’t talk about where Latinos come from, or where Asians come from,” says Nely Galan, media executive, entrepreneur, and author of Self Made. “You often see in the news [Latinos] come here for economic reasons, but so many of us come here as political refugees. If you’re a woman in Latin America and you’re seen as radical because you speak up, you could disappear. When we come here, we’re told to be quiet by our parents, and just be grateful we’re here and for all this country has to offer.”

There are real barriers to advancement. For every 100 men who are promoted to manager, only 68 Latinas are promoted, according to This keeps many Latinas stuck in entry-level positions.

“I think the wage gap exists in part because Latinas are not being given the same opportunities to apply for the same jobs, are not receiving the same training and are not being promoted at the same rate,” says Mónica Ramírez, founder and president of Justice for Migrant Women. “Also, Latina workers, we over-index in some of the lowest paid jobs, such as domestic work, the service industry, and agriculture. Yet no matter the job, Latinas are being underpaid across the board, regardless of position, industry or education level. We have a cultural problem in this country where employers are not valuing Latinas equally for our contributions.”

The myth that hard work always pays off.
Keeping your head down and getting the work done doesn’t automatically translate to a promotion. “We are taught if we work hard, we will get recognized,” says Vargas. “But it doesn’t work that way in corporate America; it rewards people who speak up and demand. While it is not on Latinas to solve the wage gap, if you can not articulate why you should get paid more, the value you bring to the role, or the projects you’ve accomplished this year, you’re dead in the water. It’s important to research competitive salaries, do a self-assessment of your qualifications and find ways to tie your role to the company’s bottom line.”

The impact of covering in the workplace. Latinas may not feel they can be their authentic selves in the office, and the energy spent downplaying their differences from the accepted status quo may interfere with their ability to shine. “There are a lot of Latinas who come to this country and feel their ability to speak another language actually hurts their mobility,” says Vargas. “They spend so much time and energy going to accent-reduction classes to speak in white spaces. They try to fit into a culture rather than add to a culture. They should be able to use this as their super power rather than assimilate.”

We must stand united. There is strength in numbers, and in finding your voice. “So many of my African American friends say to me, ‘Why are [Latinas] so quiet? Why don’t you speak up?’” says Galan. “People may not realize the trauma we may have when we come to this country. We have to have this understanding between all multicultural women, because apart we are nothing, together we are everything. We are the number one emerging market in the world. Without us, there is no economy. That is a great power. Unless we understand each other’s pain, we won’t move forward. This is a country built on voices, and we must help each other find our voice.”

There is a need for cultural onboarding. Minority women are leaving the workplace to start their own businesses, in part because they don’t feel like they can be successful or like they fully belong in corporate America. In fact, women of color accounted for 50% of all women-owned businesses in 2019, according to AMEX’s State of Women-Owned Business Report.

“The truth is that African American and Latina women are leaving corporate America and starting businesses, because they don’t feel safe in that environment,” says Galan. “Corporate America says they want diversity, and bring [diverse candidates] in, but they often don’t stay. We throw these Latina and Black women in these companies and they get inadvertent comments about how they don’t fit in. I’ve had bosses say to me, “Your lipstick is too bright, you’re too much, you’re too passionate. I was a goody two shoes who did everything right, but I’m an example of someone who left corporate America because I was uncomfortable.”

Part of the issue may lie in the inability to successfully onboard employees from different backgrounds and cultures. “There are examples of success. Corporate America could learn a lot from the military, because the thing they are doing right is how they onboard diverse people,” says Galan. “The military is far from perfect, and has had issues with things such as sexual harassment and LGBTQ+ issues among other things, but you do see a lot of minorities rise through the ranks and succeed in this environment. Why? They’re able to onboard people from different cultures to align with a bigger mission; everyone has to learn the basics and the values of the culture, and you can decide how far you want to rise through that meritocracy.”

The wage gap may widen in the Covid-19 economy. Roughly 324,000 Latina workers exited the workforce in September 2020—nearly three times the rate of white women and more than four times the rate of Black women, according to the New York Times. The financial price paid for the average woman who opts out and tries to re-enter the workforce is an 18% decrease in their earning power on average—and a 37% decrease when they’re out for three years or more. This will have a lasting impact on families and the U.S. economy.

“During the pandemic, we’re seeing that people of color have been among the hardest hit, and it shouldn’t be shocking to anyone,” says Ramirez. “Many BIPOC community members do not have the safeguards, financial or otherwise, to keep us safe during a crisis like this one. For Latina workers, if you don’t have childcare when schools go virtual or paid leave that allows you to take time off to care for kids or sick family members, then people are forced to leave the workforce. When people feel fairly compensated and valued, they do better work because they feel valued. When you close the pay gap for Latinas, it will result in a benefit overall for the company—employees will give that back and invest that positive energy into the workplace.”

It’s not about assimilating; it’s about fusion. Whites will be the minority by 2045, with Hispanics making up the largest ‘minority’ group after whites, according to Brookings. Companies need to evolve to these shifting demographics now in order to survive and thrive.

“Can we just assimilate into the culture? No, because the culture is becoming and will be majority Black and Brown, with Latinas at the top numerically,” says Galan. “America is the only country where it’s grown so exponentially that minorities are becoming the majority. This moment in our country, we are not getting along. I think that, while we must fight for social justice, it is difficult to change people’s beliefs or dictate that they not be racist. But we have to aspire to be a country that is not so divided, and that respects different points of view. However, even with all our problems, there is nowhere else in the world where you can speak up or have such an opportunity to use your voice.”

Tuesday, October 13, 2020

COVID-19 Is Having an Immediate and Alarming Impact on Latino-Owned Businesses


Written by: Margaret Steen

In a Stanford survey, nearly two-thirds say they will be out of business in six months if current trends continue.

Maria Palacio lost 97% of her coffee company’s business over a 24-hour period in March, just a few days after the World Health Organization declared COVID-19 a pandemic. Progeny Coffee delivers sustainably farmed coffee to workplaces in Silicon Valley. Business had been slowing as the health crisis mounted and tech companies encouraged employees to work from home. Then authorities in the San Francisco Bay Area issued orders for residents to shelter in place, emptying the offices of Palacio’s customers.

Two weeks after the WHO declaration, the Stanford Latino Entrepreneurship Initiative administered a survey on the effects of the crisis to 224 mostly scaled ($1 million-plus revenue) Latino-owned businesses in the United States. The findings were alarming: 86% of respondents reported immediate negative effects ranging from project delays to complete closure. And almost two-thirds said they would not be able to sustain their businesses for more than six months if the restrictions were kept in place. Detailed results are reported in “The Impact of COVID-19 on Latino-Owned Businesses.”

After Congress responded to the unfolding economic disaster in late March with the Paycheck Protection Program (PPP), managed by the Small Business Administration, SLEI conducted a second survey focused on government assistance to businesses.

Instant Impact

Palacio, cofounder and CEO of Progeny Coffee in Berkeley, California, is an example of the 86% of respondents who felt immediate negative effects of COVID-19.

In addition to losing local customers, the company couldn’t ship coffee from Colombia to European customers because of a shutdown in Colombia. And Palacio had to postpone plans to launch a new beverage: The drink could no longer be bottled in Colombia, and the U.S. supermarket chain that had agreed to buy it was too focused on supplying essentials to introduce a new product.

“Everything that we had really positive in our company shut down,” Palacio says. “It all happened at the same time.”

Not every survey respondent said business was down. For 3% — those who sell cleaning supplies, for example — the pandemic has had positive effects. “Our business has exploded,” reported one maker of hand sanitizer and disinfectants.

The remaining 11% of respondents reported business as usual. Some were deemed essential businesses and continued operations. Others have been able to shift their employees to telework. These respondents noted some additional expenses related to employees working from home, and some offered additional sick leave. Many are also anticipating additional downstream effects.

Ongoing Challenges

One-quarter of the scaled companies and one-third of the unscaled companies in the survey said their employees cannot work remotely, putting them under even more pressure.

Alan Koenig is the chief financial officer of Prosein, a 40-year-old family business in Miami that sells flooring to developers, contractors, and architects. Although the business was not shut down — construction was considered an essential industry — traffic in the company’s showrooms declined by over 90% in April. That same month, the company’s sales were down 70% compared with the beginning of the year. “People are not coming to a showroom,” Koenig says.
Will customers have the money to pay?

One survey respondent who had not seen an immediate impact on business was worried nonetheless: One of their customers has already changed to paying in 60 days rather than 30, while another needs more time to figure out how to pay.

Prospects for future business are even more concerning. One respondent who works in the real estate industry is worried that if real estate sales fall, business will drop off as well. And Koenig notes that it’s not clear how many people will embark on a home remodel during a recession.
Will supply chains hold up?

Even if demand for goods resumes once businesses reopen in the U.S., global supply chains are being disrupted. For example, Koenig is seeing delayed shipments from Italy and Spain.

In Colombia, Palacio says the coffee farmers she works with are having trouble harvesting and shipping their crops due to the pandemic. “There’s no way right now to get the coffee all the way to the port to ship it out for some of our farmers,” she explains. Coffee is typically harvested just once or twice a year, so losing a crop could have an outsize effect on the supply.
Weathering the Storm

The businesses that have been hardest hit by the pandemic don’t have a lot of time to rebound. Almost two-thirds of respondents — 65% — said they can continue operating for up to six months under the current restrictions. This includes 71% of unscaled firms and 59% of scaled firms.

Almost half of respondents — 46% — said they would run out of money in three months or less. “We’ve called our landlord and all of our vendors to request forbearance on all of our monthly bills,” one respondent said.

“In terms of liquidity, there’s a real sense of urgency to get cash to these businesses,” says Marlene Orozco, lead research analyst with SLEI.

For the first round of PPP funding approved by Congress, aid was distributed primarily through banking institutions — a disadvantage for many Latino-owned businesses, which are less likely to be connected to large financial institutions, Orozco says.

At the time of SLEI’s follow-up survey in late April, 31% of respondents had applied for aid and been approved, and 55% had applied for aid and were still awaiting a response.

Koenig is among those who’ve been approved for government aid: both a PPP loan and an Economic Injury Disaster Loan from the Small Business Administration. With these in place, he estimates that he can keep his 15-employee business afloat for six months. “But we need to come up with new ideas to make the business profitable again,” he says.

Palacio also sought help to keep her business going. She applied for PPP loans from several lenders and was approved by a small lender in Minneapolis. She also got an Economic Injury Disaster Loan and a loan from ICA, a Community Development Financial Institution in Oakland. And Intuit, one of her customers, started a GoFundMe campaign to help her business and the Colombian farmers who produce the coffee.

“We reacted pretty fast and applied to many different places,” Palacio says.

Almost a quarter of respondents (23%), mostly in the professional and business services industry, said they could keep their businesses going for more than a year under current conditions.

Adapting to the New Reality

Business owners realize they will need to be nimble to survive.

“We are assuming that this is our new normal and we need to make it work,” Palacio says. It’s not clear how long until Silicon Valley office buildings fill with employees again, so she is shifting her business to sell coffee direct to consumers. “If we’re able to figure out a niche market and create subscriptions, that will give us more runway.”

About half of survey respondents (49%) had already reduced their staff, employees’ hours, or pay, with more than half saying they expect they will need to take this step in the next three months. Scaled firms were more likely to have implemented staff cuts (56% had, compared with 40% of unscaled firms). Unscaled firms were more likely to have adjusted their pricing (27% vs. 23%).

Koenig, too, is looking for ways to adapt his business — perhaps even after the crisis is over. The company is trying to improve its cash flow by charging customers for products in full up-front rather than letting them pay only 50% until they need them. They are also sending tile samples to customers and exploring virtual reality as a way to show customers how the tiles will look. Strategies like these might ultimately replace the company’s physical showrooms.

“We have big showrooms that maybe are no longer needed,” Koenig says. “We don’t know if people are going to go out and look for flooring. We need to take our business to our customers’ homes.”

Monday, October 5, 2020

Why Right Now Is the Best Time Ever to Start a Business

Macro-economic uncertainty is creating opportunities entrepreneurs have not seen in decades. Seize this extraordinary moment.

Written by: Alex Gold
CMO of Myia Health

“I am really concerned about starting a new company right now. I think the world is too unstable and it’s just too risky,” a very close friend of mine was relaying to me the other day. “I have a job. I don’t want to voluntarily quit, have my company fail and then struggle to find something on the other side.”

“You need to look at things differently,” I responded. “You need to look at the extraordinary opportunities and the lower barriers to entry for starting a company right now. You can have access to people and talent that you would not have had previously.”

“Yes, I know, but I am still worried," my friend immediately responded. “I guess I want to have my cake and eat it.”

As technology futurist Kevin Kelly would say, right now is the best time to start a new business. Unfortunately, many potential founders, like my friend, are fearful. This is not anecdotal. Between 1978 and 2012, the number of new companies declined by nearly 44 percent, according to the Kauffman Foundation.

Paradoxically, recessions and unstable periods present the best opportunities to start new companies. During the 2008 Financial Crisis, billion dollar startups like Uber, Airbnb, and many others were founded partly as a response to changing market dynamics.

The present day is no exception, offering once-in-a-lifetime opportunities and unfair advantages to potential entrepreneurs. Among these are increased access to people and talent at lower and negotiable costs, and an environment in which consumers are more willing to try new products and services — often out of necessity. 

Increased Access to People and Talent

During boom periods, engineering, design, product and sales talent can be incredibly challenging to recruit and eventually close. Not only is the talent scarce on the market, but the best ones often command fees that can quickly bankrupt a nascent startup if they do not show value from their hires quickly.

Now, many established companies and even startups have laid off talent due to decreased marketplace demand. And due to larger market dynamics, overall salaries have also declined for once in-demand positions.

This has opened up people and talent-recruiting opportunities for entrepreneurs; with the ability to access talent that is critical to early stage growth that would otherwise be lured by larger salaries or more stable opportunities. Entrepreneurs can also rely more on alternative compensation schemes like equity to lure potential hires as the cash compensation and bonuses become more scarce. 

Time to Negotiate “Fixed” Costs

Although the fixed costs to start a new company (i.e. servers, real estate, etc.) have come down considerably over the past 20 years, they are still relatively high for early stage entrepreneurs. For real estate leases, SaaS and other capital and operating expenditures, entrepreneurs are often faced with high initial upfront expenses before their business ever generates its first spate of revenue.

In leaner and meaner times, real estate costs often decline considerably and landlords are more than willing to provide attractive deal terms to close a deal, including office renovations and more flexible lease terms. Other cost centers like SaaS and independent-contracting services may be more open to negotiation and flexible business terms as well. All of this decreases the cost of starting a business and allows entrepreneurs to deploy precious capital resources into hiring and product rather than fee based services. “Trysumers”

A foundational challenge to starting and growing a new business is acquiring customers. An expensive proposition, this will often involve persuading consumers to try a new product option or category or switch between brands. Many entrepreneurs often fail at this process, even when equipped with a significant capital war chest.

In the current environment, customer-acquisition costs may decrease considerably. First, due to economic necessity and changes in routine, consumers may be more willing to try new products and services or even switch brands from their normal selection. More importantly, as new behaviors and routines come to the fore, consumers may adopt different products and services. This provides ample new opportunities for acquisition.

Leaner and meaner times present a host of macro-economic challenges. Somewhat paradoxically, but also logically, this makes right now the best time to start a new business. Chiefly, this is because of greater access to people and talent, negotiable fees and a greater willingness amongst consumers to try new products — sometimes out of necessity.