Latino economic gains slowed by food, health care deserts: report

January 10, 2022
Latino families typically spend 71% of their income on groceries and other consumer items and services, but often struggle to find or access adequate options.
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Latinos, who will represent more than a quarter of all people in the U.S. by 2050, are often concentrated in areas that lack services ranging from adequate housing to health care, according to a recent report. 

Those disparities were among the many highlighted in “The Economic State of Latinos in America: The American Dream Deferred,” a report by McKinsey & Company that detailed the obstacles slowing or hindering the economic advancement of the 60 million Latinos who live in the U.S.   

“The challenges the Latino community faces in making upward economic gains are only deepened by living in these deserts,” says Bernardo Sichel, partner at McKinsey and one of the report’s authors. “These deserts have an impact on a range of outcomes, such as health and nutrition, options for services, productivity and budget. All these factors are impacted by the limited choices, necessity to travel for resources, and higher prices on consumer goods.”

Latino families typically spend 71% of their income on groceries and other consumer items and services, but often struggle to find or access adequate options. 

“Latinos tend to disproportionately live in segregated and poor areas where they are cut off from opportunities and services and consumer items that most Americans take for granted,” Rogelio Sáenz, a professor in the department of demography at the University of Texas at San Antonio, said in an email. “Latinos …disproportionately also do not have easy access to parks, libraries, book stores, high quality schools that are well funded, (and) banks.”

Sáenz was not connected with the McKinsey study. 

Here’s what the McKinsey report found: 

Housing markets

Among Latinos, 42%, or roughly 21.2 million, lived in a census tract that lacked affordable housing in 2019. Nearly 9 in 10 of the Latino residents in such communities lived in five states –California, Florida, New Jersey, New York and Texas.

Latinos were 3.1 times more likely than their non-Latino white counterparts to live in those housing deserts, which the report defined as low-income communities where the amount of affordable and available housing per 100 “extremely low income” households, fell below the national level.

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Health care 

Accessing health care services is a challenge for many Latinos in the U.S. with 42%, or 21.4 million, living in neighborhoods that don’t have enough medical providers to match the number of residents, or lack such services overall.

Latinos were 2.5 times more likely to live in a health care desert than their white peers, and those areas were often urban communities in Arizona, California, Florida, New York and Texas, according to the report. 

Food and groceries

Among Latinos in the U.S.,15% live in lower-income areas where supermarkets are hard to find. That’s compared with 11% of non-Latino whites who live in lower-income urban neighborhoods where the closest grocery store is more than a mile away, or in rural areas where a large number of residents have to travel at least 10 miles to find a supermarket.

“Latinos tend to live in food deserts where they do not have access to fresh fruits and vegetables,” says Sáenz, the University of Texas at San Antonio professor. “There are more likely to be convenience stores, liquor stores, and other stores,” he says, adding “Because they are a captured market, the prices of those unhealthy foods are also more expensive than in neighborhoods that are better off economically.”

Banking

Roughly 34.5 million Latinos live in areas where a higher than average number of residents do not have a bank account. Among households that are underbanked or have no accounts at all, 14% are Latino as compared with 3% of white households.

Latinos, as well as Black Americans, are disproportionately represented among the unbanked and underbanked who are often deterred from opening accounts by high fees, and a distrust of financial institutions. But not being banked can cost both money and time as consumers rack up check-cashing fees and have to find transportation to get money orders or pay bills in person. 

Broadband 

Nearly half of Latinos live in communities that have limited access to broadband, which can make it difficult to complete tasks ranging from paying bills to remote learning.

Broadband deserts are defined in the report as census tracts where there is less than 80% coverage for every 1,000 homes.

Consumer Goods 

Nearly three in four Latinos in the U.S. live in counties where there is a below average number of supercenters or membership retail clubs that allow shoppers to buy clothing, appliances and other products.

“Earning a fair wage is one thing,” the report said. “But what if you’re unable to spend it on needed goods and services?”

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