Edward D. Vargas and Gabriel R. Sánchez, COVID-19 Is Having a Devastating Impact on the Economic Well-being of Latino Families (2020)
Summary
Article by Edward D. Vargas of Arizona State University and Gabriel R. Sanchez of the University of New Mexico in the Journal of Economics, Race, and Policy, published online 10 November 2020. Using the Abriendo Puertas/Latino Decisions National Parent Survey, it finds that Latino families faced high job loss and business closures during the pandemic. Young parents aged 18–29 and households with income of $25,000 or lower reported the most economic stress. Respondents reported difficulty making housing payments and postponing education and health services, and just over half had emergency savings under $1000 after unemployment benefits expired on July 31, 2020. The authors note that Latinos took the longest to recover from the Great Recession.
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Journal of Economics, Race, and Policy (2020) 3:262–269
https://doi.org/10.1007/s41996-020-00071-0
ORIGINAL ARTICLE
COVID-19 Is Having a Devastating Impact on the Economic
Well-being of Latino Families
2
Edward D. Vargas 1 & Gabriel R. Sanchez
Received: 3 August 2020 / Revised: 19 October 2020 / Accepted: 29 October 2020 / Published online: 10 November 2020
# Springer Nature Switzerland AG 2020
Abstract
Latino Americans are more likely than non-Hispanic whites to contract COVID-19 and to face disproportionately high mortality
rates when they contract the virus. What has not been well understood is the impact COVID-19 is having on the economic well-
being of Latino families. Using the Abriendo Puertas/Latino Decisions National Parent Survey (1195), we asked Latino respondents
how the pandemic has impacted their employment, savings, and finances and we also asked them how they have been coping to
make ends meet. Using descriptive analysis and ordinal least squares regression, we find that Latinos are experiencing high job loss
and business closures. We also find that young parents (18–29-year olds) and those with income levels of $25,000 or lower are
experiencing the most economic stress. We also find that Latinos are having difficulty making housing payments and postponing
educational and health-related services to make ends meet. We also find that just over half of Latinos have emergency savings under
$1000 which is important given that unemployment benefits expired on July 31, 2020. In conclusion, this research finds that Latinos
are experiencing economic stressors and are engaging in coping strategies that are deeply concerning and which require explicit
attention from policymakers. Given that Latinos took the longest to recover from the Great Recession, policymakers should keep
this in mind as we continue to monitor the implications of the recession, ideally looking at mechanisms to reduce the stress for Latino
families and encourage policies which target low-income working class Americans and small business owners.
Keywords COVID-19 . Latinos . Economic Stress
Introduction the virus (Hernandez-Vallant et al. 2020). As our article dis-
cusses, unfortunately Latino families are also being devastated
COVID-19 has taken a significant toll on racial and ethnic by the economic recession driven by the need to close down
communities across the country, while early work has focused many businesses due to fear of spreading the virus.
on the economic and health consequences disproportionately We draw from a recent Abriendo Puertas/Latino Decisions
impacting Black Americans (Hardy and Logan 2020). We use National Parent Survey to identify the factors that are most highly
this opportunity to focus on how COVID-19 is impacting correlated with two economic stress variables we created based
Latina/o populations. Latino Americans are more likely than on a battery of survey questions that includes questions on eco-
non-Hispanic Whites to become ill with the virus and have nomic stress such as job loss, lost wages, and business closures
faced disproportionately high casualty rates when they contract and economic coping strategies such as using pay-day loans,
postponing educational, and health expenditures. Our analysis
suggests that not only is a large segment of Latino families facing
* Edward D. Vargas severe economic stress due to the health pandemic, but a large
edwardvargas@asu.edu percentage have only a shockingly small safety net and limited
access to financial support to weather this financial stress. Our
Gabriel R. Sanchez analysis includes an assessment of the coping techniques Latinos
sanchezg@unm.edu
are taking to cope with the economic stress they are facing. When
1
Arizona State University, Interdisciplinary B, Room 165, taken together, the survey data suggests a very rough road ahead
Tempe, AZ 85287, USA for far too many Latino families.
2
Department of Political Science, University of New Mexico, While descriptive in nature, our manuscript references rel-
Albuquerque, NM 87131-0001, USA evant research that helps contextualize the findings from our
J Econ Race Policy (2020) 3:262–269 263
survey. Given that Latinos were the population who was hit were at a disadvantage, relative to other Latinos groups who
the hardest by the last economic recession, and took the lon- were better able to weather the recession. The impact of the
gest to recover, tracking the financial stress across the Latino recession was also not uniform geographically and by job
community early in this recession is critical. sector. Using in-depth qualitative interviews, Valdez (2019)
shows that the Great Recession had a negative impact on the
wealth accumulation and business outcomes of middle-class
Evidence of COVID-19’s Impact on Latino Mexican-origin entrepreneurs in the city of El Paso, TX.
Americans’ Financial Well-Being There were also important occupational and residential differ-
ences; in that, there were housing and labor markets that were
Although it is still early into the pandemic, and similar to our hit particularly harder than others.
team, researchers are just starting to acquire data for analyses, For example, Calnan and Painter (2017) find that there were
there is already evidence that Latinos may be disproportionately large declines in the construction industry during the recession,
impacted by the economic recession associated with COVID- and unemployment was particularly worse in metropolitan com-
19 (Rodriguez-Diaz et al. 2020). For example, Latinos stand to munities with large immigrant Latino populations. In examining
endure deep economic losses from both labor markets but also education attainment and skill levels, research during this eco-
the costs associated with becoming personally impacted by nomic downturn also shows that it was low-skilled workers and
COVID-19. These costs include medical care costs, jobless- immigrants without English proficiency and new entrants that
ness, increased debt through predatory lending, and ultimately were harder hit in the recession (Liu and Edwards 2015). It is also
the unplanned costs of funerals and burials. Experts expect that important to note that historically, during times of economic
Latinos are specifically vulnerable given persistent income in- downturns, there is also an upswing in anti-immigrant sentiment
equalities, and their over representation in small businesses and against Mexican-origin populations and other immigrants such as
employment in service, construction, and agricultural indus- Chinese newcomers during the late 1890s. This was the case in
tries. In fact, unpublished economic research has found that Mexican repatriations of the late 1920s, Operation Wetback in the
3.3 million small businesses were lost in the early stages of 1950s, and holds true for the mid-2000s. During the Great
stay-at-home orders, with Latino-owned businesses dropping Recession, we witnessed an increase in immigration enforcement
by 32% (Fairlie 2020). The recent coronavirus crisis is forcing and the removal of undocumented workers and their families. The
insurmountable business closures which will lead to an increase main difference between the early anti-immigrant waves relative
in housing evictions and foreclosures. to the Great Recession was the devolution of immigration en-
Emerging research has found evidence that Latino and forcement powers to state local police officers through policies
African American households are in fact being harmed more such as the controversial 287(g) program that deputized local law
severely by the economic stress created by the outbreak of the officers to now enforce federal immigration laws.
virus. For example, analysis of the US Census Bi-Weekly Pulse The intersection between the Great Recession and immi-
Survey by the Urban Institute provides strong evidence that gration enforcement is clearly seen in the housing and fore-
Latinos have been hit hard economically by the recession asso- closure market. Using a quasi-experimental approach, Rugh
ciated with COVID-19. In fact, not only do Latinos have worse and Hall (2016) examine the variation in county applications
outcomes than whites in all economic well-being indicators for 287(g) immigration enforcement agreements and find a
available in the data, but in regard to income loss, and worry strong association between enforcement and Latino foreclo-
about paying rent or mortgage, Latinos are facing more eco- sure rates. This research finds an even stronger relationship in
nomic stress than African Americans (Turner and King- counties with more immigrant detentions and a larger share of
Viehland 2020). Given the devastating effect that COVID-19 undocumented owner-occupied homes. This research shows
is having on the African American community (Hardy and how local immigration enforcement coupled with a recession
Logan 2020), the somewhat higher economic stressors among can negatively impact Latino families and the important asso-
Latinos motivate a deeper analysis. The economic issues facing ciations between enforcement, public policy, and economic
Latino and African American communities due to COVID-19 stress. In sum, the Great Recession impacted Latinos and the
are particularly troubling given unpublished research that has research of this era shows the importance of context and the
found that the safety net through social policies in the USA intersections between legal status, occupational status, geo-
cannot meet the spike in demand for these valuable resources graphical dispersion, and educational attainment. We argue
(Bitler et al. 2020). that the recent economic downturn caused by the coronavirus
Research on the Great Recession of the 2000s and its will also impact Latinos in unique ways that may resemble
impact on Latinos has shown that the impacts were not that of the 2000s.
uniform for Latinos and immigrants. For example, Tran and In this research, we examine and identify the factors that
Valdez (2017) analyze the Current Population Survey data are most highly correlated with economic stress and economic
and find that second-generation Mexicans and Puerto Ricans coping in the month of July (2020), 4 months after President
264 J Econ Race Policy (2020) 3:262–269
Trump declared the novel coronavirus a national emergency. nationally. The sampling design and weighting approach
This analysis allows us to better understand a large segment of means that our results are representative of Latino families
the Latino community who have families and who are facing with children 18 years of age or younger. This survey’s results
severe economic stress due to the health pandemic. Our na- are to our knowledge the most comprehensive study of
tional survey provides us an opportunity to better understand Hispanic/Latino families regarding COVID-19. All analysis
the personal experiences of the Latino community to hopeful- is conducted using Stata15 and estimated using sample
ly shape federal policy to help all Americans. weights, and we use robust standard errors to control for
Our effort to examine economic coping behavior builds on heteroskedasticity.
a long-standing literature that has looked at how American Our measures of economic coping and stress are a sum-
households react to economic shocks. For example, research mated scale that combines the following economic out-
has found that women and mothers may modify their behavior comes taken from survey questions asked about the
differently than men during economic downturns, but that household (see Table 1, Cronbach alpha is a measure of
gender differences are influenced by the economic standing internal consistency, that is, how closely related a set of items
of families (Sabarwal et al. 2011). Research has also docu- are as a group. It is considered to be a measure of scale reli-
mented the struggles of racial and ethnic minorities and the ability). The summated scales are created to be summing up
disparities in savings and intergenerational wealth that help the individual binary values, so as you increase up the sum-
buffer emergency situations or unanticipated job loss (Darity mated scale you have either a higher economic stress or en-
and Mullen 2020; Pfeffer and Killewald 2017). When looking gaged in more economic coping mechanisms to make ends
at the impact of economic shocks and health, research during meet.
the Great Recession has found that short-term unemployment For our economic stress summated scale (Cronbach
has disproportionately impacted the mental health in the alpha = 0.72), we asked the respondents “For each of the
blacks and to a lesser extent whites Americans (Diette et al. following, please indicate whether any of the circum-
2018). We continue this line of inquiry and focus on Latino stances apply to you or someone in your household be-
populations during the coronavirus pandemic. Using the cause of the recent coronavirus outbreak: Lost their job;
Abriendo Puertas/Latino Decisions National Parent Survey, The business I own has been shut down or seen a drop-in
we examine how the pandemic is impacting Latino employ- revenue; Had work hours cut, or pay cut, but kept their
ment, savings, and finances and how they have been coping to job; Had trouble making rent or mortgage payment; Have
make ends meet. lost a significant amount of retirement savings.”
For economic coping summated scale (Cronbach al-
pha = 0.84), we asked the respondents “Have you done
Data and Methods any of the following to manage your financial situation
during the pandemic?” The responses included “Borrowed
We use the Abriendo Puertas/Latino Decisions National money from friends or family; Applied for a loan from a
Parent Survey (2020) to explore the impact that COVID-19 bank or credit union; Borrowed money from a pay-day or
has had on the economic well-being of Latino families in the easy loan company with a high interest rate; Used up all
USA. The survey was conducted from June 12 to 19, 2020, or most of my savings to help pay for our family’s ex-
and has a nationally representative sample of 1195 Latino penses; Skipped a monthly car, rent, or mortgage pay-
parents and legal guardians including foster parents and ment; Postponed or cut back on health-related expenses;
grandparents. The survey was conducted in English or Postpone or quit education/career related expenses;
Spanish at the discretion of the respondent with interviews Moved or changed my housing situation.”
conducted online, as well as through live telephone interviews Our main independent variables include if the respondent is
on both landline and cellphones. One of the major goals of the an essential worker as we asked respondents if they “Continue
survey was to evaluate the economic vulnerability of Latino to go to work outside of the house?” We also asked the rela-
families during the COVID-19 pandemic. The survey has a ± tionship with the focal child (using grandparents as reference
2.8% margin of error, with larger margins for sub-samples. category), age of respondent (using under 29 years of age as
The large sample size of this national survey allows for com- the reference category), age of children in the household
parisons to be made in attitudes and experiences across a (using children in the household under 4 years of age as the
number of sources of variation within the Latino community, reference category), education attainment, income, the total
including nativity, socio-economic status, skin color, amount of savings for emergencies (using $100 as the refer-
homeownership, and whether respondents are essential ence category), marital status, if the respondents have internet
workers. in the home, nativity, homeownership, skin color, and if their
Upon completion, the data were weighted to match the US child has had to remain at home because of the coronavirus.
Census ACS for parents and grandparents of Latino origin To measure skin color, we asked respondents to describe their
J Econ Race Policy (2020) 3:262–269 265
Table 1 Summary statistics using the 2020 Abriendo Puertas/Opening Doors National Survey
Variable Observations Mean Std. dev. Min Max
Economic stress
Lost their job 1580 0.29 0 1
The business I own has been shut down or seen a drop-in revenue 1580 0.33 0 1
Had work hours cut, or pay cut, but kept their job 1580 0.52 0 1
Had trouble making rent or mortgage payment 1580 0.41 0 1
Have lost a significant amount of retirement savings 1580 0.39 0 1
Economic stress scale 1580 1.94 1.66 0 5
Economic coping
Borrowed money from friends or family 1580 0.33 0 1
Applied for a loan from a bank or credit union 1580 0.27 0 1
Borrowed money from a pay-day or easy loan company with a high interest rate 1580 0.26 0 1
Used up all or most of my savings to help pay for our family’s expenses 1580 0.42 0 1
Skipped a monthly car, rent, or mortgage payment 1580 0.32 0 1
Postponed or cut back on health-related expenses 1580 0.33 0 1
Postpone or quit education/career-related expenses 1580 0.32 0 1
Moved or changed my housing situation 1580 0.23 0 1
Summated economic coping scale 1580 2.49 2.51 0 8
Parent1 1580 0.75 0 1
Grandparent 1580 0.05 0 1
Parent all else2 1580 0.20 0 1
Female 1580 0.48 0 1
Age categories
Age: 18–30 1580 0.29 0 1
Age: 30–44 1580 0.44 0 1
Age: 45+ 1580 0.27 0 1
Age of children in household
Under 4 years of age 1580 0.18 0 1
Children 5–10 1580 0.26 0 1
Children 11–18 1580 0.56 0 1
Education3 1580 3.31 1.45 1 6
Household income4 1423 2.96 1.51 1 6
Savings
Less than $100 1365 0.23 0 1
Between $100–$500 1365 0.13 0 1
Between $500–$1000 1365 0.16 0 1
Between $1000–$3000 1365 0.16 0 1
Between $3000–$5000 1365 0.12 0 1
Between $5000–$10,000 1365 0.11 0 1
More than $10,000 1365 0.10 0 1
Essential worker 1580 0.51 0 1
Married5 1580 0.69 0 1
Homeowner vs renter 1580 0.57 0 1
Child(ren) at home due to coronavirus 1580 0.85 0 1
Internet in home 1571 0.33 0 1
Rural vs urban 1566 0.10 0 1
Foreign born vs US born 1566 0.29 0 1
Light skin vs medium and dark 1100 0.57 0 1
1
Birth, step, adoptive
2
Foster, aunt/uncle, other
3
Education: 1 = less than high school, 2 = high school graduate, 3 = some college, but did not graduate, 4 = 2-year degree, 5 = 4-year degree/Bachelor’s
degree, 6 = post-graduate degree
4
Income: 1 = less than $25,000, 2 = $25,000 to $49,999, 3 = $50,000 to $74,999, 4 = $75,000 to $99,999, 5 = $100,000 to $149,999, 6 = $150,000 or
higher
5
Married: 0 = single, not in a relationship, in a romantic relationship, but not living together, widow, divorce; 1 = married and in a relationship and living
together
appearance using a scale from 1 to 5 where 1 represents very Discussion of Descriptive Results
light and 5 represents being very dark. We created a binary
variable with 1 = very light and light, and 0 = medium, dark, We begin our results section with a discussion of the descriptive
and very dark. statistics of our dependent and primary independent variables.
266 J Econ Race Policy (2020) 3:262–269
We then estimate ordinary least squares regression to better regulation of the predatory short-term lending businesses
understand which Latino families are experiencing the worst should be enhanced to ensure that families facing dire eco-
outcomes 3 months after President Trump declared a national nomic consequences due to the public health crisis do not find
emergency (March 13, 2020) due to the novel coronavirus. themselves in financial ruin.
Our descriptive analysis finds that 29% of Latino families We also find that 42% of respondents used up all or most of
have had someone in their household lose their job since their savings to help pay for family experiences, over 32%
COVID-19 began shutting down businesses across the coun- have postponed or quite education/career related expenses,
try. We find that job losses among Latinos are highest among and 33% postponed or cut back health-related expenses.
18–29-year olds and those with income levels of $25,000 or These coping mechanisms will have long-term consequences
lower (37% respectively). and undue much of recent gains in health care coverage
We also find that a large percentage of Latino businesses through the Affordable Care Act and educational gains in
have been impacted by the virus, as 33% of Latino parents/ higher education.
primary caregivers have either seen their business shut down For our economic coping scale, our measure ranges from 0
or have experienced significant drops in revenue. The fact that to 8 with a mean of 2.49 (s.d. 2.51). The scale indicates that
1 in 3 Latino families have seen their businesses impacted by 12% of Latino parents and grandparents have utilized at least
COVID-19 is dramatic given the huge role Latino small busi- one of these economic coping strategies, with 10% facing at
ness owners have had in keeping this critical component of the least two. Indicative of how hard COVID-19 is hitting the
economy alive and well. In fact, the number of majority Latino population, 7% of all Latino families have had to use
Latino-owned employer businesses increased more than all of the economic coping strategies we include in our scale
13% between 2014 and 2016, compared to less than 3% and 15% have experienced at least four economic challenges.
growth for non-Latino-owned businesses (Mills et al. 2018).
When it comes to paying housing, 41% of Latino parents/
primary caregivers have had trouble paying for their rent or Latino Families Have Limited Safety Net
mortgage. The cost of housing has been more challenging for Funds to Rely on
those who are renting their homes, as we find that 49% of
renters indicating that they are having trouble paying their rent Our article intends to provide a comprehensive discussion of
compared to 35% for those who own their home. We also find the economic vulnerability of Hispanic families during this
that 52% of Latino parents/primary caregivers have had their challenging time in American history. The fragility of the
work hours cut, or their pay cut, but have kept their jobs. Latino community is best reflected in the limited safety net
When combined into an economic stress scale, our measure most respondents in our representative sample of Latino fam-
ranges from 0 to 5 with a mean of 2 (s.d. 1.66), revealing that ilies have available to lean on during this difficult time. As
the average Latino family in the USA have faced two of these reflected in Tables 1 and 2, half (52%) of Hispanic families
economic stressors at this point in the pandemic. The scale across the country have only $1000 or less in savings for
indicates that 16% of Latino parents and grandparents have financial emergencies, and fully 23% with an astonishing
faced at least one of these economic stressors, with 18% fac- $100 or less. Given this very limited safety net, it is not sur-
ing at least two. Another 18% have experienced 3 or less prising that 42% of Latino families in the survey indicate that
stressors and 10% have experienced 4 and 5 economic they have used up all of their family’s savings to pay for basic
stressors, respectively. living expenses. This finding is in line with past research and
In addition to tracking the economic stress that Latino fam- has found that due to limited liquid assets, Latinos face harder
ilies have faced during the unprecedented health pandemic, material hardships during financial shocks like that caused by
the survey allows for a discussion of the steps that Latino COVID-19 (Despard et al. (2018). This finding also suggests
parents and grandparents have taken to address these econom- that the COVID-19 inequalities in economic outcomes facing
ic challenges (i.e., coping). Unfortunately, Latino families both African Americans and Latinos are at least partially due
have had to make several tough decisions in order to manage to the very limited emergency safety net resources both com-
the deteriorating financial situations of their households dur- munities share, as African Americans have been found to lack
ing the pandemic. One of the most tragic findings from the savings needed to weather economic shocks (Darity and
survey is that 1 in 4 (26%) of economically vulnerable Latino Mullen 2020).
families have turned to pay-day or easy loan companies that
charge a high interest rate. Using this option is highest among
parents with young families with children ages 0–4 at 33% Discussion of Regression Results
and suggests a very rough road ahead for the economic trajec-
tories of these families, and particularly, the children in these Our discussion of descriptive statistics has identified the sig-
families. This finding strongly suggests that the need for nificant economic strain Latinos families are under as a result
J Econ Race Policy (2020) 3:262–269 267
Table 2 Coefficients for ordinary
least squares regression of Economic Stress Economic Coping
demographic indicators on
economic coping and stress using VARIABLES β s.e. β s.e.
the 2020 Abriendo Puertas/
Opening Doors National Survey Reference category: grandparent
Parent 1 0.494** (0.239) 0.784** (0.374)
Parent all else 2 0.595** (0.262) 0.677* (0.404)
Female − 0.299*** (0.105) − 0.376** (0.156)
Reference category: age under 29
Age 30–44 − 0.323** (0.125) − 0.805*** (0.190)
Age 45+ − 0.420** (0.164) − 0.824*** (0.254)
Reference category: children in HH under 4 years of age
Children 5–10 − 0.216 (0.154) − 0.077 (0.235)
Children 11–18 − 0.145 (0.147) − 0.021 (0.230)
Education3 0.129*** (0.038) 0.200*** (0.058)
4
Household Income 0.074* (0.044) 0.147** (0.069)
Reference category: savings less than $100
Between $100–$500 0.082 (0.178) − 0.114 (0.290)
Between $500–$1000 − 0.346** (0.175) − 0.594** (0.264)
Between $1000–$3000 − 0.429** (0.177) − 1.008*** (0.263)
Between $3000–$5000 − 0.532*** (0.190) − 0.784*** (0.300)
Between $5000–$10,000 − 0.432** (0.207) − 1.258*** (0.304)
More than $10,000 − 0.686*** (0.227) − 1.562*** (0.342)
Essential worker 0.615*** (0.100) 0.758*** (0.150)
Married5 − 0.203* (0.114) − 0.184 (0.176)
Homeowner vs renter − 0.236** (0.111) − 0.232 (0.166)
Child(ren) at home due to coronavirus 0.761*** (0.140) 0.861*** (0.206)
Have Internet in home 0.831*** (0.111) 1.442*** (0.172)
Rural vs urban 0.051 (0.175) 0.190 (0.261)
Foreign born vs US born 0.188 (0.125) −0.290 (0.182)
Light-skinned vs medium and dark skinned 0.229** (0.102) 0.300** (0.148)
Constant 0.546 (0.340) 0.785 (0.511)
Observations 946 946
R-squared 0.217 0.229
*** p < 0.01, ** p < 0.05, * p < 0.1
1
Birth, step, adoptive
2
Foster, aunt/uncle, other
3
Education: 1 = less than high school, 2 = high school graduate, 3 = some college, but did not graduate, 4 = 2-year
degree, 5 = 4-year degree/Bachelor’s degree, 6 = post-graduate degree
4
Income: 1 = less than $25,000, 2 = $25,000 to $49,999, 3 = $50,000 to $74,999, 4 = $75,000 to $99,999,
5 = $100,000 to $149,999, 6 = $150,000 or higher
5
Married: 0 = single, not in a relationship, in a romantic relationship, but not living together, widow, divorce; 1 =
married and in a relationship and living together
of the economic recession created by the need for states to behavior dependent variables. In all of our analysis, we
close down many business operations in an effort to re- run our models using robust standard errors to control for
duce the spread of the virus. Our discussion also suggests heteroskedasticity. This process will hopefully help our
some possible sources of internal variation among Latino effort to provide policy-makers and advocacy organiza-
families. As we turn our attention to the regression anal- tions with insights on the sub-groups of the Latino com-
ysis, our goal is to identify the factors among Latinos that munity who are most vulnerable to the economic down-
are correlated with our economic stress and coping turn that may linger for some time.
268 J Econ Race Policy (2020) 3:262–269
We begin with the economic stress model to identify fac- some form of compromises to make ends meet. We also find
tors that are correlated with facing economic challenges such that mothers are less likely than fathers to be engaging in
as job loss or being furloughed. We find that parents (birth and economic coping strategies. Both models also suggest that
foster) relative to grandparents and other guardians are more respondents who have more education and who have higher
likely to be experiencing economic stress. This is particularly household incomes are also more likely to be experiencing
true for fathers whose economic stress increased by 0.29 rel- economic stress and utilizing strategies to overcome those
ative to mothers, which is statistically significant at the 0.01 obstacles. This counterintuitive finding suggests that Latinos
level. with higher SES levels, including business owners, are being
We also find that young parents under the age of 29 are more impacted sharply by the nature of this economic downturn.
likely to experience economic stress relative to parents who are
30–44 and parents in the 45 plus age range. Interestingly, we
also find that essential workers who are leaving the house for Conclusion – Discussion
work during the pandemic relative to non-essential workers are
0.65 times more likely to experience economic stress, holding As this survey makes clear, Latino families across the nation
all else constant. This suggests that despite holding on to their are struggling financially because of the severe impact that
jobs, essential workers have faced other significant economic COVID-19 has had on the economy and need as much support
challenges that require support. In addition, we also find that as possible to weather this storm. The financial stress families
parents who have children home-schooling are also more likely are under right now is reflected in families making “receiving
to be experiencing economic stress. Underlining how devastat- help with wages and income” the most cited issue (32%) in an
ing the recession has been for many vulnerable Latino families, open-ended question to respondents asking them about the
those who have under $100 in emergency savings are more most important issues facing their community that the federal
likely to be experiencing economic stress and hardships relative government should address.
to those with $500 or more in reserves. When examining Our study is conducted a few months into the pandemic
homeownership, we find that homeowners are less likely than during a critical time when many states are closing down
renters to report economic stress, holding all else constant. businesses to stop the spread of the virus which has put many
We also find that skin color has a statistically significant Americans out of work. Our findings suggest that this reces-
effect on economic stress as measured in our scale of econom- sion has not been restricted to a specific segment of the work-
ic hardships faced during COVID-19. There is an existing force or demographic group among Latinos. For example,
literature across the social sciences that has found skin color even essential workers who may be perceived to be faring well
among Latinos to have an effect on several outcomes, includ- by being able to continue working are seeing significant eco-
ing racial-identification (Golash-Boza and Darity Jr 2008; nomic stress during the pandemic. Similarly, the economic
Darity Jr. et al. 2005), and health outcomes (Garcia et al. downturn appears to be hitting higher SES Latinos very hard.
2015). Most directly tied to this study, scholars have found While these trends may shift as the recession continues taking
that darker-skinned have some worse economic outcomes hold across the country, these preliminary results are informa-
than their lighter-toned counterparts (Rosenblum et al. 2016; tive for public policy.
Davila et al. 2011). However, darker skin color does not al- We suggest that policymakers at both the state and national
ways translate to negative economic outcomes, as it is not levels consider enacting policies that support Latino families
statistically correlated with employment probabilities (Davila recognizing the nuances associated with the recession. This
et al. 2011). We find that light-skinned Latinos have actually includes directing support to Latino families who are not eli-
faced worse economic stress as reflected in our summated gible for federal funding due to their immigration status, and
scale than their darker counterparts. For reliability, we also working families who have not lost their jobs but who still
ran our analysis using skin color as a continuous variable face tremendous economic challenges. These families that are
and find a consistent trend that light-skinned Latinos are more so essential to providing food and other services to our nation
likely to be experiencing economic stress and engaging in at a critical time in our history should not be putting them-
economic coping mechanisms to make ends meet. selves in financial danger while helping to keep the economy
When we turn to our economic coping analysis, we find afloat.
similar patterns in that parents relative to grandparents are Research on the Great Recession suggests that in addition
more likely to use coping strategies to address their economic to young workers and African Americans, Latinos experi-
challenges. Not surprising, we also find that households with enced the highest rates of jobs losses and under-employment
less than $100 savings for emergencies are most likely to be among dislocated workers who were eventually re-employed
engaged in some economic coping mechanism to weather the (Sum et al. 2010). The median personal income of Hispanic
financial crisis. Once again, we find that essential workers workers was $28,400 in 2007 during the heat of the recession,
relative to non-essential workers are more likely to be making and saw a loss of 7% in 2013 to a median income of $26,400
J Econ Race Policy (2020) 3:262–269 269
(Pew 2019). Latinos took the longest to recover from the Great Hernandez-Vallant A, Sanchez G, Roybal C, Gomez-Aguinaga B,
Abrams B, Daniel DK, Vargas E, Pena J, Dominguez MS. 2020.
Recession and were barely at a point financially similar to
Compliant but unprotected: communities of color take greater action
before the 2007 market crash. We should keep this in mind to prevent the spread of COVID-19 but remain at risk, retrieved at:
as we continue to monitor the implications of the recession, https://iaphs.org/compliant-but-unprotected-communities-of-color-
ideally looking at mechanisms to reduce the stress for Latino take-greater-action-to-prevent-the-spread-of-covid-19-but-remain-
at-risk/?fbclid=IwAR1m0Sv8cJGzyWRlNA8bHT-boYbqUK-
families so that recent history does not repeat itself.
6CRfMTLKgZo8RhGGMNPG4CK7Aw6c.
Liu CY, Edwards J. Immigrant employment through the Great Recession:
Compliance with Ethical Standards individual characteristics and metropolitan contexts. Soc Sci J.
2015;52(3):405–14.
Conflict of Interest The authors declare that there is no conflict of Mills CK, Battisto J, Lieberman S, Orozco M, Perez I, Lee NS. Shining a
interest. light on national trends: Latino Entrepreneurship Initiative-
Graduate School of Business. 2018. Retrieved at: https://www.gsb.
stanford.edu/sites/gsb/files/publication-pdf/slei-report-2018-latino-
owned-businesses-shinging-light-national-trends.pdf.
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