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In Their Own Words: How Inflation Affects Hispanics

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“You can quote me: F*ck this,” were the first words of Andreína, a 26-year-old Venezuelan living in Miami when El American asked her how inflation has affected her small business.

Since 2020, Andreína has had her own clothing store, called Rosa y Menta.

But the same hardships Andreína has faced thanks to inflation are replicated throughout the Hispanic community and to a greater or lesser extent, across the United States.

A CNN poll claimed 9 out of 10 voters said the economy was a very important issue in determining who they would vote for in the midterms and 51% said the economy and inflation was the most important issue in their vote, far above any other issue.

And for Hispanic voters, the situation is replicated. In a Pew Research open-ended question, 80% of Hispanics (75% of Democrats and 90% of Republicans) said the economy was very important in determining their vote in the midterms.

And the why behind why Hispanics vote with their pocketbooks is simple: inflation affects lower-income households because they spend a greater share of their income on goods that are more affected by inflation, such as food and transportation. And Hispanics, on average, tend to belong to lower-income households in the United States.

“Inflation affects different people to different degrees because not all goods and services change in price equally. This is what we call a “heterogeneous effect” in economics. Those it affects most strongly are both those who buy the most inflationary goods and those who save. Conversely, those who owe money benefit from inflation because it erodes the value of their debt,” Daniel Di Martino, a doctoral student in economics at Columbia told El American.

“It hit me in the worst possible way: in the pocketbook. People were very confused at the beginning, but as a Venezuelan you know that inflation doesn’t come out of nowhere and you are more or less prepared to handle it,” Eloy, a Venezuelan in Orlando who has been in the U.S. for five years, told El American. “Now I spend more on services, on my car, on gasoline, on buying food. Now I have to work more hours and I have 3 jobs to be able to afford the same as before.”

“However, it’s uncertain how it affects Latinos,” Di Martino says. “Using averages by ethnic groups nationwide one can infer that since they have less income they spend more on categories of goods and services that have increased in price the most, such as food and gasoline. However, it is not 100% certain since Latinos live more concentrated in certain states that are affected differently by inflation.”

“Suppliers increased, the price per employee increased, also the costs of advertising and pop up presence. I had two employees and now I am on my own with the company,” Andreína told El American.

“I personally don’t like so much the angle of saying that Latinos are affected more by inflation because that’s not obvious. However, you could say that politically they care more about the economy and therefore inflation may drive them to vote Republican or not vote Democrat,” Di Martino concluded.

Although there is no full certainty about how inflation affects Hispanics, the perception they themselves have of inflation and the economy is clear: the situation is unsustainable and for that reason, a good percentage do not plan to vote for Democrats.

With Thanksgiving and Christmas festivities around the corner, many families are going to have a tough time affording to bring their families together due to the rise in cost of everyday commodities, including gas prices.”

“A recent poll shows that 71% of Hispanics believe that the country is heading in the wrong direction, with 26% choosing inflation and rising prices as a top issue and 12% choosing the economy and jobs as a top issue,” César Ybarra, VP of policy at FreedomWorks told El American. “Democrats spent trillions of taxpayer dollars on social welfare programs through the so-called America Rescue Plan Act and the Inflation Reduction Act. These bills have done nothing to address the economic instability that millions of Americans are facing every day,” Ybarra added.

“In the pandemic, we did well because we provide services to Amazon in their supply chain,” José Ochoa, a Mexican American entrepreneur tells El American. “With the government checks and the pandemic, people were buying a lot online and we did well. But without those incentives and inflation, business volume dropped a lot. People can’t afford to be shopping online. Also, the typical thing you hear, if you used to make a purchase with $150, now you spend 30% or 40% more,” Ochoa added.

“I can’t go out as much as I used to and I have to think better about what I’m going to buy at the supermarket. If I look on the bright side, inflation has made me more responsible with my bills,” Eloy tells El American with a chuckle.

“But I feel I can enjoy my life less because I work longer hours. I used to work 40 or 50 hours a week, now I work 60 or 70 and I still can’t do as much as before with it,” he added.

“I have 5 years working hard in the United States without complaining, but for the first time I feel like I am in “United Slaves,” I feel like a slave because the people who rule us keep making mistakes and disappointing those who voted for them,” said Eloy.

However, it is no coincidence that Hispanics have higher rates of entrepreneurship than the U.S. average. Despite the difficulties presented by inflation, unexpected opportunities present themselves.

“It was difficult for a while because I was left alone with all the work and without the capital to invest with the same intensity as before. I had to reinvent myself as a small business because my business model, as I had conceived it, was no longer profitable for me,” said Andreína.

“A second-hand clothing market and more cash flow opened up in Miami. So when I reinvented my business, I started selling again,” she added.

“Something that is rarely mentioned about inflation are the side effects: since you need to work more, then you have less time for your family, now I hardly see my little sister or my mom because of how much I work. It also delays projects. For example, I want to start studying computer science and I have very little time. I’m still going to start, but it’s going to take me much longer. Inflation is not just about having less money, it also delays plans and projects,” said Eloy.

“Inflation makes you feel like you are stagnating,” he concluded.

Edgar is political scientist and philosopher. He defends the Catholic intellectual tradition. Edgar writes about religion, ideology, culture, US politics, abortion, and the Supreme Court. Twitter: @edgarjbb_ // Edgar es politólogo y filósofo. Defiende la tradición intelectual católica. Edgar escribe sobre religión, ideología, cultura, política doméstica, aborto y la Corte Suprema. Twitter: @edgarjbb_

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