Public Policies to Empower Latinos in California

The Gonzalez family’s immigrant journey from Mexico to California began in the late 1970s with a modest corner market in Anaheim. Today, Northgate Gonzalez Market has evolved into a billion-dollar food retailer that operates 47 stores, positively impacting local communities with hundreds of local jobs and youth scholarships, as well as providing access to onsite community health and financial resources. This upward mobility success story emphasizes the critical connection between U.S. economic prosperity and that of its residents, particularly for the state’s working-class immigrants and their descendants.

To sustain this progress, there must be a commitment to public policies that can effectively break intergenerational cycles of poverty by significantly enhancing the financial and civic foundations of working Latino families. This represents the key to California’s future success.

Data shows that Latinos in California face a concerning level of poverty. They represent 40% of residents, yet account for over 50% of the state’s impoverished population. Their substantial demographic growth – accounting for more than two-thirds of all growth over the past decade – is expected to raise their share of the population to nearly 50% in 25 years.

The biggest problem cited by Latinos stems from lack of access to quality education or skill development — crucial to boosting income.This is of increasing importance due to California’s skyrocketing cost of living. Soaring market-rate rentals accelerate rent burden, making saving for education, entrepreneurship, and homeownership virtually impossible. With lack of familial inherited wealth, the exponentially increasing housing prices make investment all but impossible for millions of Latinos.

California ranks as the third lowest in the nation for Latino homeownership. This is especially consequential to the Latino population, which holds over half of its total wealth in real estate, compared to white populations who tend to have more diversified investment portfolios. This constitutes one of the main underlying reasons for the state’s deep wealth gap. This is further compounded by the fact that over half (51.6%) of California’s residents under 18 years old are Latino.

Addressing these issues is critical. In high-cost California, Latinos face setbacks due to deep-rooted, community-wide, obstacles such as lower financial literacy, higher debt-to-income ratios, and missed tax credits. “[They] are consistently priced out of the market", states Brenda Rodriguez, executive director of Affordable Housing Clearinghouse, “…so equipping them for success requires engaging them from a young age in programs promoting financial wellness.” Assisting them along their financial track increases their chances for success and provides opportunities to craft their unique economic paths. Building the capacity of trusted community messengers, such as Ms. Rodriguez, could prove transformative.

In California, 99% of Latino immigrants are from Latin America, and 77% of those are from Mexico. Such migrants mainly come from impoverished rural communities with low educational attainment, face language barriers, and are unfamiliar with the U.S. education, financial, and civic systems. Unable to guide their children, partnering with local leaders is vital for providing culturally relevant guidance that ensures they have all the information and resources they need to succeed. Mentorship can have a profound imapct on Latinos upward mobility and civic engagement.

“I nearly overlooked the college application process, assuming it was a straightforward progression from one grade to the next,” recalls Heidi Marshall, Riverside County’s Director of the Department of Housing and Workforce Solutions. “[I was] unaware of this crucial step [and] my single mother, who had migrated from Honduras as an adult and worked two jobs, was even more uninformed." She then added, “It was a professor who showed me the intricacies of the college application process.”

Low wage work often imposes long hours, leaving little time for civic and political engagement among Latinos. They face time constraints, lack of knowledge, and difficulties accessing resources. This challenge is particularly difficult for leaders of Central and Southern Inland California, under-resourced regions, historically disconnected from Sacramento policymaking. As Latino families increasingly migrate inland, away from high-cost coasts where Latino leadership is historically found, the need to recognize and cultivate new leaders in these communities becomes paramount. Meeting emerging leaders where they are can amplify their voice and directly involve them in shaping public policies that affect them and their communities. Their development can be facilitated
by a variety of institutions including schools, churches, nonprofits, civic organizations, government, and businesses — both small and large.

Despite facing formidable financial barriers to upward mobility and civic engagement, Latinos’ relentless efforts echo in the data. They exhibit undeniable economic power; contributing $3.2 trillion to the U.S. GDP in 2023 (rivaling the United Kingdom’s economy), driving over one-fifth of consumer spending in California (approximately $750 billion of its $2.9 trillion economy), and increased political representation; Latinos comprise 32.5% of the California Legislature, well above national averages of 2%.

In the business sector, Latino-owned businesses — predominantly led by Latina entrepreneurs — marked the fasted-growing national sector in 2022. Significant strides have been made in education as well. For example, in the California State University system, Latino male graduation rates doubled from 9% to 18% within the last five years, and Latino female rates increased from 15% to 29%. Of University of California Riverside's 22,000 student body, 75% are Latino and 46% report being low-income. Nonetheless, the school boasts a 77% graduation rate and has been ranked #1 in social upward mobility two years in a row.

Latinos have made impressive progress, but their economic power and civic leadership still holds great untapped potential.Gonzalez’s Market evolved from a modest corner market to a billion-dollar company thanks to the creativity, hard work, and resilience of its founders, exemplifying Latino immigrants and their descendants as assets to California. Yet, despite their significant contribution to the state’s economy and society, the prosperity of approximately 16 million Latino residents continues to be plagued by stark financial disparity. To ensure a brighter future for all Californians, closing the wealth gap for working families is essential. Empowering them to be active leaders, problem solvers, and contributors to wealth creation will unlock opportunity for young Latinos who will carry the legacy of the American Dream far into the future.

Read the full report (PDF; this section starts on page 33)

Karla López del Río is dedicated to empowering working families to achieve their potential. She actively leads as a community development executive, grounding her research in real-world experience to drive equitable public policies that foster financial wellness, upward mobility, and wealth creation. Her innovative approach generates public-private partnerships that promote civic engagement and attract multi-million dollar investments to Southern California’s low- and moderate-income neighborhoods. A native of Mexico City, Karla currently works as Executive Director of Riverside County’s Community Action Partnership, serves on Chapman University’s Center for Demographics and Policy Advisory Board, and holds a Bachelor’s degree in Development Studies from UC Berkeley. Her work has earned numerous awards from esteemed institutions at the local, state, and national levels.