Latina-owned businesses in California have doubled in recent years, proving once again that Latinas are entrepreneurial and a key economic engine for the state. Latina-owned small businesses generated over $19 billion in revenues and employed over 86,000 individuals in California in 2016.
Latinos are an important part of California’s economy. Latinos make up 35% of the state’s population over the age of 16 years,as such, they represent a significant portion of the state’s entrepreneurs, workers and students. Indeed, 37% of the employed population in California is Latino, and nearly one-quarter of all firms in the state are owned by Latinos (815,304 out of 3,488,448 firms classifiable by ethnicity). Latino entrepreneurs are also a growing force in the state. Between 2007 and 2012, the number of Latino-owned businesses in California increased by 43.9%, while the growth rate for all businesses was 5% during the same time period. However, the average Latino firm is smaller and generates less in annual receipts and sales than the average non-Latino firm; the Stanford Latino Entrepreneurship Initiative reports that this difference in receipts and sales represents an opportunity gap of $1.47 trillion in the U.S. economy.
In this research brief, the fourth in a series by the California Latino Economic Institute (CLEI) examining the state of Latino economic well-being in California, we explore the current state of Latino employment and entrepreneurship, as well as some of the challenges that California Latinos face in both these roles. California Latinos are a heterogeneous group with a multiplicity of experiences. To understand who Latino entrepreneurs and workers are, as well as the challenges they face, we explore factors such as income, age, gender, education and nativity. Using this information, we also seek to identify areas of opportunity for increased investment to support the expansion of the state’s Latino middle class.
• Latino-owned business make up nearly one-quarter of all firms in California, and account for 6.5% of total receipts and sales in the state.
• 76.7% of Latinas who work in a STEM occupation work as healthcare practitioners or technicians.
• 66% of Latinos who are self-employed have a high school degree or less.
• 40.3% of US-born self-employed Latinos are in the middle class.