Janet Yellen, U.S. Treasury secretary, speaks during a meeting with U.S. President Joe Biden, not pictured, in the Oval Office of the White House in Washington, D.C., U.S., on Friday, Jan. 29, 2021.
Shawn Thew | Bloomberg | Getty Images
Treasury Secretary Janet Yellen warns that the Latino community has been hit “disproportionately hard” by the last five economic crises in the United States.
“I took my first economics course around 1963. Since then, our country has endured at least 5 major economic crises,” she said in remarks she delivered Tuesday at the U.S. Hispanic Chamber of Commerce.
“Each of these crises was very different but they all shared at least once significant characteristic: They all hit Latino-Americans disproportionately hard.”
Yellen also summarized her remarks in a thread on Twitter.
In the virtual remarks, Yellen said that the Hispanic unemployment rate is always higher than the national average, and when there is a crisis, the Hispanic rate always spikes higher.
“Economic crises generally do this: They take pre-existing inequalities — and make them even more unequal,” Yellen said.
“If someone tried to design an economic crisis that would unduly target the Hispanic community, they’d probably come up with something that looks a lot like Covid-19,” she said.
“One-in-five Latino households still say they don’t have enough food to eat,” Yellen noted.
She said that the American Rescue Plan and the Paycheck Protection Program were meant to help Americans who have been hit hard by the pandemic.
“PPP was supposed to be an early lifeline, but because of issues with the program’s design, the first rounds often didn’t reach the smallest businesses, which are disproportionately Hispanic-owned,” Yellen said.
Latino-owned businesses often drive a large portion of the country’s recovery after an economic crisis, the Treasury Secretary said.
She noted that from 2007 to 2012 the number of these businesses grew by 3.3%. In comparison, businesses with non-Hispanic owners declined by 3.6% in that period.
“And after 2012, the number of new Latino-owned business grew at more than twice the national average,” Yellen said.
A Stanford University study found that the odds of loan approval from national banks were 60% lower for Latino-owned businesses than white-owned businesses.
The Secretary said that the Treasury gearing up to inject $12 billion dollars into Community Development Financial Institutions and Minority Depository Institutions. It’s more money than has flowed through these programs since they were created in the 90s, Yellen said.
She said thinks the money will make a “meaningful difference” in Latino-owned firms’ ability to access capital, but explained that it is only just a start.
“If [we] work together, then I am confident that when someone looks back at the economic data around the pandemic, they won’t simply conclude that Hispanic workers and businesses were the victims of the 2020 economy. They’ll see that they were builders of a better one in 2021 and beyond.” Yellen said.