WASHINGTON – Today, in recognition of Hispanic Heritage Month, the U.S. Department of the Treasury (Treasury) released a fact sheet detailing the critical contributions of Latinos to the U.S. economy and benefits of the Administration’s economic agenda for Latino families, small businesses, and communities.
When President Biden and Vice President Harris came into office at the height of the COVID-19 pandemic, the health and economic crisis for Latino and other underserved communities was exacerbated by a lack of investment. Long-standing underinvestment limited economic opportunities and contributed to disparities, including lower home ownership rates. Over the past four years, Treasury’s work to deliver a broad-based economic recovery has delivered results for the Latino community and expanded opportunities for all Americans to fully participate and compete in the 21st century economy.
Currently, Latinos make up approximately 20% of the total U.S. population, with around 65 million Latinos in the United States. In 2021, Hispanic-owned companies employed 3 million people and paid over $124.4 billion in annual payroll.
The Biden-Harris Administration’s actions have resulted in strong outcomes for Latino families:
- The Biden-Harris Administration’s economic agenda has created 5 million jobs for Latino workers—achieving a historically low 5.5% Latino unemployment rate through August 2024, down from 8.6% when the Biden-Harris Administration took office.
- The average annual real wage for Latinos grew 4% from December 2019 to June 2024.
- Latino business ownership is up 40%, growing at the fastest rate in 30 years.
- The number of Latino workers that were self-employed—a measure of entrepreneurship—increased by over 30% from 2019 to 2024.
- Latino net worth is up 47% between 2019 and 2022 and the Latino-white wealth gap is at its narrowest level in nearly 30 years.
Building on this success, the Treasury is:
- Growing Latino-owned small businesses: Treasury’s State Small Business Credit Initiative (SSBCI) is supporting underserved entrepreneurs. In addition to direct capital support, SSBCI provided $125 million to support a “Capital Readiness Program” through the Minority Business Development Agency (MBDA), which is building a nationwide network of 43 technical assistance providers to enable underserved entrepreneurs to access government capital programs like SSBCI. As of July 2024, SSBCI has announced $145 million in technical assistance awards to states, territories, Washington D.C., and Tribal governments to support access to capital for underserved and very small companies.1 During September, Treasury began to announce awards for the Investing in America Small Business Opportunity Program, a competitive grant program that will support innovative, high-impact models of providing underserved and very small companies with access to financial advisory, legal, and accounting services as they prepare to apply for capital.
- Doing business with Latino owned companies through procurement: Procurement with government agencies plays an important role for many minority-owned businesses. The Administration in 2021 set a goal to increase the federal government’s contracts with minority-owned and small and disadvantaged businesses to 15% by 2025. Since the commitment was made, Treasury’s contracts to Latino-owned businesses have increased by 87%, from $100 million in FY2020 to $187 million in FY2023. Treasury has also designated two minority-owned financial institutions as financial agents of the government.
- Economic Opportunity Coalition data: The Economic Opportunity Coalition (EOC), launched by Vice President Harris in July 2022, is a group of over 30 companies that have committed to make investments in underserved communities to address economic disparities and jumpstart local economic activity. To date, the EOC has placed more than $850 million in deposits to Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) through partnerships with private companies.
- Emergency Capital Investment Program (ECIP) data re Community Development Financial Institutions and Minority Depository Institutions: Alongside the efforts of the EOC to support underserved communities, Treasury has invested $1.6 billion in Latino-designated minority depository institutions through the ECIP. This investment is expected to significantly benefit Latino communities, with estimates that investments across the ECIP portfolio could increase lending by over $50 billion over the next decade. ECIP participants unlocked access to capital for the hardest-to-serve small businesses. Through the end of 2023, ECIP resulted in $4.5 billion of lending to small businesses with annual revenues of $1 million or less. Of this lending, $1.2 billion went to the smallest and hardest-to-serve businesses with annual revenues of $100,000 or less, including many start-ups. ECIP participants also reported $1.2 billion of lending to Latino-owned businesses, $10.3 billion in rural communities, and $17.5 billion in minority communities. In the same period, ECIP participants’ lending in some of the most distressed communities in the U.S. included $10.2 billion in persistent poverty counties; $850 million in Indian reservations and Native Hawaiian homelands; and $459 million in Puerto Rico and other U.S. territories.
- Supporting Latino workers and families: To reduce hardship among families with children, the American Rescue Plan expanded the Child Tax Credit for the 2021 tax year, increasing the amount of the credit for eligible households from $2,000 per child under age 17 to up to $3,000 for children ages six to 17 and up to $3,600 for children under age six. The supplemental Latino child poverty rate was cut nearly in half from around 20% in 2019 to 8% in 2021. However, it rose to about 19% in 2022 following the expiration of the Advanced Child Tax Credit.2 The Administration continues to advocate to make this expanded Child Tax Credit permanent.
- Keeping Latino families in their homes: The American Rescue Plan created two programs to keep families in their homes—the Emergency Rental Assistance (ERA) Program and the Homeowners Assistance Fund (HAF). Treasury’s $46 billion ERA program reached the most vulnerable renters, particularly Latinos, who have been historically hit harder during earlier economic downturns, at higher rates and therefore contributed to housing stability among Latino families. The ERA program has made over 12.3 million payments to families at risk of eviction. As of March 2024, 29% of ERA funding has gone to Latino families. Research from the U.S. General Services Administration found that ERA funds were more likely to reach those with the lowest incomes, including those who were most likely to otherwise be at risk of eviction. More than 450,000 homeowners at risk of losing their homes received assistance through the HAF program, including 86,409 homeowners that self-identified as Latinos.
- Allowing Latino taxpayers to file online for free and ensuring they receive the credits and deductions for which they are eligible: During the 2024 Filing Season, the Internal Revenue Service (IRS) piloted Direct File, a new tool that allows eligible taxpayers to file their tax returns online, for free, directly with the IRS. Direct File is one of the ways the IRS is helping taxpayers get their maximum refunds as quickly as possible and access the credits and deductions to which they are entitled. The pilot saw 140,000 taxpayers claim more than $90 million in refunds and save an estimated $5.6 million in filing costs. The number of states offering Direct File will double in Filing Season 2025 to 24, and 62% of Americans will live in states that will offer Direct File. Treasury and the IRS have also secured commitments from additional states to join Direct File in Filing Season 2026, as part of their work to progressively expand the tool’s reach. The new tool is available in English and Spanish for eligible tax filers, including those with Individual Tax Identification Numbers (ITINs). Customer service functions, including a live chat feature, are also available in English and Spanish. The IRS also introduced conversational voice technology, available in both English and Spanish, that can route calls based on what a taxpayer says during this year’s Filing Season.
- Historic investment in Puerto Rico: Puerto Rico governments received approximately $4 billion in American Rescue Plan State and Local Fiscal Recovery Funds to respond to the health and economic impacts of the pandemic. Treasury’s Capital Projects Fund made $158 million available to Puerto Rico to deliver high-speed internet access to households and businesses that currently lack internet access. In 2023, Treasury approved Puerto Rico for up to $109 million in SSBCI funds to provide credit to and investments in small businesses. The CDFI Fund provided Equitable Recovery Program (ERP) awards that include 70 grants totaling $226 million to CDFIs in Puerto Rico to help low- and moderate-income communities recover from the COVID-19 pandemic and invest in long-term prosperity. CDFIs in Puerto Rico received the largest amount of ERP funding of any single state or territory.
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