New Majority

Closing the Latina Wage Gap Starts by Supporting Latina-Owned Businesses

October 29, 2020
3 min read

I personally experienced the Latina pay gap for the first time back in 1994, at age 14, when I filled in for a friend to babysit for a neighbor. At the end of the night, the family paid me $12, roughly $2 per hour. It was 33% less than they paid my white friend for the same service.

As a young Latina, I was taught to bite my tongue, smile, and show gratitude for the opportunities I was offered. It’s a skill that’s served me well in many instances over the years, but it also contributes to one of the largest racial disparities in our country: the Latina wage gap.

On average, Latinas in the U.S. are paid 45% less than white men and 30% less than white women. Many attribute this to a disparity in education, experience, or negotiation skills, but the facts don’t line up. I am not alone in my babysitting experience. The wage gap starts at age 16 for Latina girls, when they are paid 11% less than boys the same age, and it only widens as they grow older. In fact, the higher the education level for a Latina, the wider the wage gap. Even though Latinas ask for raises and promotions at higher rates than men, they get worse results.

My response to that babysitting snub was the same recommendation I give Latinas today: Start your own business.

The most effective way to close that gap is to employ ourselves, to dictate the value that we are worth, and to be willing to walk away when others aren’t willing to pay us for that value. It gives Latinas not only the power to close the wage gap for their own careers, but to pay their power forward through equal wages across their team.

I hear the corporate rhetoric around bringing diversity into the workplace, and the efforts leaders are taking to bring more equality inside their institutions should be applauded. But there are stronger forces at play that make it incredibly difficult to put a Latina into a C-Suite or even a senior leadership position. The people circling these job opportunities — white men who have also worked hard to get where they are, but who have more context, greater experience, and tighter relationships with the decision makers who select these roles — make leapfrogging to the top almost impossible for Latinas who often sit in more junior roles.

There is an unspoken understanding in the corporate world that change requires a generational shift of gradual promotions up the corporate ladder by leadership who recognize the long-term effects of a deeply ingrained social bias. So we can wait and hope that the number of leaders who grasp the severity of the diversity gap in the workplace can hold the rest of the company accountable — or we can take matters into our own hands.

When a Latina is empowered to start her own business, she relies on the market to determine the value she provides. While her negotiations may have been ignored  in the board room or corner office, as an entrepreneur, the value of her services is set by the court of public opinion — a diverse public, of which 18% are Latinos themselves, representing the second largest racial or ethnic group in the United States.  

So to those corporate leaders who truly want to make a difference, spend your diversity dollars investing in Latina entrepreneurs. Source your supply chain from Latina-owned businesses, and build up the very companies you may someday look to acquire. Provide our community with the leadership positions we’ve long deserved, as CEOs of our own businesses, and allow us to prove our potential today, not generations from now.

The data supports this model, with both female and Hispanic-owned businesses outperforming our white male counterparts. Give Latinas the platform to grow and lead, and to flood the pipeline at all levels of a corporation. If you need our resumes to match our potential, give us an opportunity to show, versus tell.

To the consumers who are enraged by the data shared above, spend your dollars with Latina-owned businesses. Help these women grow their revenues, not only for the benefit of their own salaries, but as employers of over 680,000 people, many of whom are Latinos themselves. Contact your local Hispanic Chamber of Commerce for a listing of Latina-owned companies in your area.

And to all of you Latinas wondering why you are earning sixty-four cents for every dollar the white male next to you takes home, use your voice and speak up. Nearly one-third of Americans are unaware of the pay gap between Latinas and white men; nearly half of Americans don’t know it also exists between Latinas and white women. It is time to take back control of your financial independence, and to invest in yourself when the rest of the world may not yet recognize your full potential. Share your business and get the support you need at Hello Alice’s Hispanic Business Center, which is full of grants, opportunities, education, and community to ensure you succeed.

Whether you close that gap with a side hustle, or a full-time venture, give yourself the title, the power, and the paycheck that the world has yet to provide.

Carolyn Rodz is the co-founder and CEO at Hello Alice. You can follow her on Twitter and LinkedIn.