Latino workers feel inflation’s force, seek paths of resilience

Seyli Molina is like millions of other Americans whose lives have been upended by the past year’s big inflation spike. Living in Kenner, Louisiana, she and her husband have been absorbing higher costs, spending more and getting less, saving little, and scrimping.  

Yet, with Cuban and Honduran roots, respectively, the Molinas are also part of a Latino segment of the population that’s among the most severely affected – and is handling the situation differently. 

The Hispanic experience is far from monolithic, of course. Yet experts say that, in general, the group is adapting to inflation as it has to other challenges – with a resilience rooted in cultures that focus on cooperation within the community, multigenerational living, entrepreneurship, optimism, and hard work.

The Molinas lost their home last August in Hurricane Ida. Their housing needs are being met for now by a neighbor who is renting them a room.

Amid absences from work as a notary due to health concerns, Ms. Molina has found herself spending additional time running one of Kenner’s more popular Facebook groups, where members sometimes reach out in search of jobs or employees. She plans to start a community garden as a bulwark for neighbors against current troubles. 

“I get to see it from a lot of different angles,” Ms. Molina says. “People’s lives are coming unraveled.” 

Indeed, surging prices have gone from a 1970s memory to a taxing strain on households of all racial and ethnic backgrounds. Yet compared with other groups, Latinos often work more, earn less, own less, and receive fewer employment benefits. They, along with Black Americans, funnel more of their already smaller paychecks toward basics like food and gas – for which price hikes have been particularly steep. 

Hispanic Americans represent almost 20% of the nation’s population. While they hail from multiple nationalities and cultural backgrounds, they tend to share certain traits that help them weather hard times, experts say. Families, which tend to be larger, frequently have several generations live together and pool resources. Or one family may live with another and share expenses. Saving is important. So are family and extended community, where neighbors look after one another. 

“Everyone suffers through hard times, and the Hispanic cultural community is resilient in that we reach out to one another to assist …  because when someone else benefits, we also benefit,” says Loui Olivas, a Latino professor emeritus at Arizona State University who specializes in entrepreneurial studies and small business.

He says Latinos also are industrious about how they save and spend, often shopping locally to support neighborhood merchants, says Dr. Olivas. 

Latinos own more businesses nationwide than any racial or ethnic group other than white Americans, and they start more businesses than any other group, opening them at four times the rate of other demographics, says Arturo Osorio, associate professor of entrepreneurship at Rutgers University in New Jersey. He says they are undaunted by the fact that most new businesses fail within 10 years because, often, they have no other choice.

Luis De La Hoz, chairman of the Statewide Hispanic Chamber of Commerce of New Jersey, says entrepreneurship is the Latino way. 

“We open businesses, especially after any natural disaster or crisis, because we cannot find jobs,” he says. “We cannot stay waiting to get unemployment, especially if you are undocumented. The only option that you have is to make a living for you and your significant others and loved ones.”

And if inflation is a hardship, he adds, that isn’t something new. “We’ve been facing many challenges and ... have overcome the problems as part of our daily life.” 

That doesn't mean that managing the strains of this past year has been easy. In general, Latino workers are overrepresented in low-wage jobs, underrepresented in higher-paid positions, and generally receive less pay than white workers in the same jobs – by about 35%, according to a 2021 study by McKinsey & Co. This equates to some $288 billion lost each year and prevents 1.1 million Latinos from joining the middle class annually, the report said.

Ecuadorian-born Elvis Encalada manages a garage in a Manhattan high-rise residential building. He earns $17 an hour, got a 35 cent hourly bump two years ago, and hasn’t taken a vacation since before the COVID-19 lockdown. He works six days a week, anywhere from 53 to 60 hours to make overtime. He lives in Queens with his wife and their two young sons. Even as grocery prices rise, Mr. Encalada says he and his wife spend less on food so they can cover higher phone and internet bills. Mr. Encalada says he’s thought about taking jobs that pay better by the hour – bank teller, door attendant, customer service representative – but they don’t offer overtime. So, he’s better off staying where he is: “Hispanic work – it’s almost like we always do overtime.”

A carpenter in rural North Carolina says he works 50 to 80 hours a week to net about $770 after tax. He and his wife, who asked to remain anonymous because of their immigration status, have four children ages 14 to 20, who were all born in the U.S. To earn extra money for their children’s education, the couple also run a weekend landscaping business. They use coupons, look for sales, and restrict how often they eat out. They still send money home to relatives in Mexico.

Providing for those left behind and for those who have less are tenets of Hispanic culture, says Dr. Lidia Virgil, chief operating officer at SOMOS Community Care, a nonprofit network of doctors in New York City that works with Hispanic and immigrant communities.

“If they know a neighbor is hungry, they will share half their meal – even though they are struggling themselves,” she says. 

Valentina Alvarez, a 2019 college graduate with a degree in textiles fashion merchandising and design, lives with her parents, grandmother, and adult brother. She works full time in her family’s Mi Colombia Restaurant in Elizabeth, New Jersey, where her brother also helps out. Ms. Alvarez says the mostly Hispanic clientele purchase about as much food as they did before this inflation shock, but now generally buy two lunch specials – one for lunch at the restaurant, the other for dinner at home – because it saves money.

As consumers struggle, businesses are also scraping to get by. Inflation, supply chain backups, and lack of workers are dragging down many of them, Hispanic and otherwise.

Lilia Rios and her husband, Francisco Del Toro, moved from Mexico 17 years ago to start a restaurant-furnishing shop, La Providencia. Based in Passaic, New Jersey, the company imports and distributes kitchenware, furniture, and folk art for Mexican restaurants in 22 states. Ms. Rios says expenses are up 50% to 300%. She and her husband are trying to renegotiate prices with their corporate customers, but may not be able to do so for another six to 12 months, since big customers expect to stick with previously established quotes. So, they are taking the hit – still making a profit but considerably less. Prices have increased at La Providencia’s retail store, which is open 360 days a year, but it constitutes a small part of business. Ms. Rios and Mr. Del Toro each work at least 60 hours a week.  

“We don’t rest,” she says. 

Despite feeling the pinch, Hispanic adults are more optimistic that they can live the American dream than are their non-Hispanic counterparts, says Chris Jackson, senior vice president at Ipsos, the global market research firm.

In Louisiana, Ms. Molina shrugs off the challenges her household faces.

 “You can take things with a grain of salt or a grain of sugar,” she says. “I take mine with sugar.”