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Five Trends in Hispanic Families' Financial Health

Wednesday, September 30, 2020

By Ana Hernández Kent, Policy Analyst, Center for Household Financial Stability

Hispanic Americans have a multitude of cultures and make up a very diverse group tied together by the Spanish language.

Take me, for example. My family is Puerto Rican and I was born on the “mainland.” Growing up, I fielded questions like: “How do you make the best tacos?” or “Do you like really spicy food?” I now realize these questions were based on a mistaken assumption that I was Mexican. Yet, while I do enjoy the flavorful Mexican cuisine, my family recipes typically focus on savory roasted pork (or lechón), plantains and rice.

Though it may be difficult to sum up a group across distinct cultures, doing so can illustrate some commonalities. National Hispanic Heritage Month, which spans Sept. 15 to Oct. 15, highlights the contributions and influence of Hispanic Americans. Hispanic Americans refers to Hispanics of any race: The terms Hispanic and Latino/Latina/Latinx are often used interchangeably, even though they mean different things. I use Hispanic because the surveys I cite use this term and respondents self-select into this category, not Latino, Latina or Latinx. This annual event prompted me to highlight five trends that focus on the financial well-being of Hispanic families, both before the COVID-19 pandemic and now, and what these trends could mean for the broader economy.

No. 1: Hispanic financial health is critical for the current and future economy.

Hispanic population growth over the past few decades has been rapid:

  • Hispanic Americans are the largest minority group in the U.S. They moved from 4.5% of the population in 1970 to 18.5% in 2019, according to an analysis of decennial U.S. Census data and the U.S. Census Bureau’s 2019 American Community Survey.
  • One in four Generation Z adults and 21% of millennials identify as Hispanic, according to my analysis of data from the Federal Reserve Board’s 2019 Survey of Household Economics and Decisionmaking, or SHED. Gen Z encompasses those born after 1996; millennials were born between 1981 and 1996.
  • The Census Bureau projects that Hispanic Americans will constitute 27.5% of the population by 2060.

These rising shares mean that a larger portion of future business revenue will rely on Hispanic consumers’ dollars. Also, since roughly two-thirds of gross domestic product (GDP) is made up of consumer spending, Hispanic population growth will influence the broader economy as well.

No. 2: COVID-19 hit Hispanic employment hard and affected basic needs.

In April, Hispanic Americans had the highest unemployment rate—18.9%—of any racial or ethnic group, and seasonally adjusted unemployment continued to be high as of August, at 10.5%, according to Bureau of Labor Statistics data graphed in St. Louis Fed data tool FRED. Hispanic workers of any race who lost their jobs are also much less likely than Black and non-Hispanic white workers to expect to return to the same job, according to my calculations of data from the July 2020 household economics survey.

Furthermore, according to the Census Bureau’s Household Pulse Survey conducted Sept. 2-14, 21% of Hispanic renters and 11% of Hispanic homeowners reported that they were not current on their rent/mortgage payments. One in five Hispanic households with children experienced food insecurity, reporting that they sometimes or often did not have enough to eat.

No. 3: Hispanic Americans lacked assets and financial security before COVID-19.

Ten percent of Hispanic families in 2019 had negative net worth (their debts were bigger than their assets), according to the  Federal Reserve Board’s 2019
 Survey of Consumer Finances (SCF). Seventeen percent were below the poverty line in 2019, according to American Community Survey one-year estimates.

Calculations from 2019 SHED data indicated that fewer than half of Hispanics say they would pay for a $400 emergency expense with cash or its equivalent, highlighting a lack of liquidity. Having cash on hand helps with financial resilience, the ability to financially cover and recover from life events like the loss of a job.

No. 4: Ethnic wealth gaps are persistent.

The white/Hispanic median household wealth gap (which mirrors the magnitude of the white/Black wealth gap) is large and has been remarkably stable over the past 30 years. Analysis of data from the most recent 2019 SCF showed the typical Hispanic family had a net worth of $36,000, or just 19 cents per each dollar of non-Hispanic white families’ median household wealth.

A Hispanic family in the 75th percentile for Hispanic families also had less wealth than a white family in the 50th percentile of white families.

No. 5: Education doesn’t close these wealth gaps.

The graphic below uses the most recent data from the 2019 SCF to look at white and Hispanic wealth gaps by education. Hispanics at every education level had less median wealth than non-Hispanic whites with the same education. Tellingly, a Hispanic family with a terminal bachelor’s degree had median wealth ($74,000) that was less than that of a non-Hispanic white family with at most a high school degree ($123,000).

White/Hispanic wealth gap by education (Details in article)

Note: Dollar values are adjusted to 2019 dollars using the Consumer Price Index for All Urban Consumers and rounded to the nearest $1,000.

Sources: Survey of Consumer Finances and the author's calculations.

Investing in the Future Economy

As the country grapples with important questions on diversity and inclusion, minority groups are highlighting their economic contributions and importance. Many leaders and organizations are taking note.

Here at the St. Louis Fed, employees last year formed the employee resource group “Mi Gente” (which translates to “My People” in English) with Bank leadership support. The group promotes Hispanic/Latino heritage.

As the largest minority group in the country, Hispanic Americans are a strong and expanding engine of economic growth. Investing in these communities now is an investment in our future economy. The delicious cuisine is an added bonus.


1 Hispanic Americans refers to Hispanics of any race: The terms Hispanic and Latino/Latina/Latinx are often used interchangeably, even though they mean different things. I use Hispanic because the surveys I cite use this term and respondents self-select into this category, not Latino, Latina or Latinx.

Ana Hernández Kent 

Ana Hernández Kent is a policy analyst for the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis. Her research interests include economic disparities and opportunity, class and racial biases, and the relationship between psychological factors and the household balance sheet. Read more about Ana’s research.

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