Imagine $3.7 trillion being infused into the nation’s economy. That’s exactly what Latinos’ economic contribution was in 2022, the highest level since tracking began, and the fifth-largest GDP globally, according to a recent report.1

While it’s good news, imagine how much larger this contribution could be if there were not an extreme wage disparity between Latinos and whites alone, particularly for women. A lack of access to higher education and career training further compounds the issue.

In 2022, Latinas nationwide who worked full-time year-round earned just 57.5 cents for every dollar earned by white, non-Hispanic men, a 42.5% wage gap. This creates a potential lifetime earnings loss of nearly $1.3 million. Among all workers — including those working full-time, part-time, full-year or partial — Latinas were paid only 51.9 cents per dollar, compared to white, non-Hispanic men (a 48.1% wage gap).2

The condition is much worse for Latinos in California due to a concentration in low-paying occupations and barriers to career advancement.

Overcoming low-wage stagnation and the deprivation that comes with it means ending occupational segregation, limited access to higher education, discrimination and language barriers, which greatly reduce opportunities.

According to a 2024 study by the California Budget and Policy Center (CBPC) across California’s 58 counties, white women earned 80 cents for every dollar white men earned. Latinas earned a fraction of that, just 44 cents for every dollar white men earned, compared to the ratio of women to white men’s median annual earnings from 2018 to 2022.3

At this rate, Latinas will not reach the same wages as white men within the lifetime of the state’s youngest children. Latinas won’t close the wage gap until 2153, according to CBPC.4

Let that sink in. Addressing the wage disparity among Latinx individuals is especially critical when considering the size of the Latino population and its anticipated growth in the years to come.

According to newly released Vintage 2023 Population Estimates from the U.S. Census Bureau, between 2022 and 2023, the Hispanic population accounted for just under 71% of the overall growth of the United States population, driven primarily by births. Today, one in five Americans is Latino; this will increase to one in four by 2060. In California, Latinos constitute the largest percentage of the population and are expected to continue growing in the coming years.5

In 2022, among the state’s Hispanics aged 25 and above, 15.5% had bachelor’s degrees, while the rate was 46.1% among whites alone, a gap of more than 30 percentage points.6

Removing Obstacles

We need to work harder to narrow the gap as quickly as possible to remove the many obstacles Latinos face. There won’t be progress if we increase college tuition, reduce

students’ grants and scholarships, cut budgetary allocations and abandon or reduce resources for further strengthening provisions for Hispanic-Serving Institutions.

Addressing diversity, equity, and inclusion (DEI) is an inseparable part of serving the underserved and paving the way for a better future for all. It is rather unfortunate to see a rise in rejecting DEI as a foundation for equality and the betterment of life for all.

DEI does not give undue advantages to the underserved; rather, it protects them against ongoing disenfranchisement and discrimination, which prevent them from achieving their full potential for success. When the underserved are able to achieve a better economic conditions, the economy can ultimately reach a much higher level of efficiency for all.

According to published data from 2024, Californians paid a total of more than $1,074 billion in federal and state taxes. The sum of federal tax amounted to $806
billion.

Taking away the sum of $444.5 billion in forms of all assistance programs provided by the federal government, the remainder, which amounts to $363.5 billion, can be considered as the contribution of the state towards the budgetary need of the federal government, which amounts to 37% of the state’s total tax payments.7

To correct this imbalance and increase the economic well-being of the underserved, California needs to enhance its capacity to absorb a larger share of its federal budgetary allocation through various entitlement programs.

We cannot take Latinos’ economic contribution for granted. Nor can we maintain barriers that prevent them from realizing their full growth potential.

About the author

Jamshid Damooei, Ph.D., is a professor and executive director of the Center for Economics of Social Issues (CESI) at California Lutheran University. In 2025, he released the report, “Affording a Dignified Life on the California Central Coast.”

References:

1 U.S. Latino GDP skyrockets to record $3.7 trillion, with growth rate outpacing China, India, UCLA Newsroom (2024) https://newsroom.ucla.edu/releases/us-latino-gdp-skyrockets-to-record-37-trillion-dollars

2 Institute for Women’s Policy Research (2023) Fact Sheet; https://iwpr.org/wp-content/uploads/2023/09/Latina-Wage-Gap-Fact-Sheet-2023.pdf

3 California Budget and Policy Center (2024), California Women’s Well-Being Index (The Wage Gap Fact Sheet); https://calbudgetcenter.org/app/uploads/2024/08/Fact-Sheet_wagegap.pdf

4 Hannah Orbach-Mandel, Nishi Nair, and Laura Pryor (2024) Wage Disparities for Latinas in California: A Continuing Concern, California Budget and Policy Center; https://calbudgetcenter.org/resources/wage-disparities-for-latinas-in-california-a-continuing-concern/

5 U.S. Census (2024) New Estimates Highlight Differences in Growth Between the U.S. Hispanic and Non-Hispanic Populations; https://www.census.gov/newsroom/press-releases/2024/population-estimates-characteristics.html

6 See US Census on Educational Attainments Source: U.S. Census, S1101

7 See Federal Taxes - IRS https://www.irs.gov/statistics/soi-tax-stats-gross-collections-by-type-of-tax-and-state-irs-data-book-table-5 State Taxes - US Census https://data.census.gov/table/EITSQTAX.GS00QTC03?q=federal%20tax&g=040XX00US06&y=2023 California Budget - https://calbudgetcenter.org/resources/a-guide-to-the-california-state-budget-process/ Federal Spending in 2024 - https://www.usaspending.gov/search?hash=b1724fc80ff7d9c9eb17a88fe6b6c98f