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Demography & Population Studies

UCLA LPPI Research Spotlights Latino Entrepreneurs’ Growth and Challenges in California

Contributors

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Paul M. Ong Experts
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Silvia R. González Experts
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Citlali Tejeda Fellows
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Chhandara Pech Contributor

The policy brief uses the American Community Survey to explore trends in self-employment, earnings, education, and incorporation over the past decade and a half.

FOR IMMEDIATE RELEASE
Contact: lppipress@luskin.ucla.edu

UCLA LPPI Research Spotlights Latino Entrepreneurs’ Growth and Challenges in California

LOS ANGELES (May 8, 2025)—A new policy brief from the UCLA Latino Policy and Politics Institute (LPPI) highlights the surge of Latino self-employed entrepreneurs in California and the systemic barriers they face. With the federal administration rolling back critical support for minority business development—including cuts to small business grants and staffing reductions—California has an opportunity to take the lead in filling the gap to ensure small entrepreneurs continue to drive our economy. 

The policy brief uses the American Community Survey to explore trends in self-employment, earnings, education, and incorporation over the past decade and a half. The research by Paul Ong, Silvia R. González, Citlali Tejeda, and Chhandara Pech, underscores Latino entrepreneurs’ role in driving economic vitality while calling for policies to address inequities. 

Key findings include:

  • Entrepreneurial Surge Among Latinos: Latino self-employed entrepreneurs grew by 44% from 559,000 in 2008 to 807,000 in 2022, boosting overall self-employment as non-Latino numbers declined.
  • Earnings Disparities Persist: Latino entrepreneurs earn only 62% of non-Latino counterparts’ median earnings in 2022, hindering wealth-building.
  • Evolving Demographics: A rising share of Latino entrepreneurs are US-born with higher education, marking a new generation.
  • Incorporation Gaps: Latino businesses’ incorporation rate rose from 17% in 2008 to 27% in 2022, yet trails non-Latinos at 38%, reflecting barriers to capital and growth.

Key policy recommendations developed in partnership with LPPI’s policy team, Belem Lamas, and Cesar Montoya, to ensure Latino- and all minority-owned businesses continue to thrive include: 

  • Expand Community-Led Outreach on Incorporation:  Fund trusted messengers such as “promotoras” to promote incorporation benefits and formalization pathways. These outreach efforts should prioritize regions with high concentrations of informal or cash-based businesses.
  • Strengthen Local Minority Business Networks: Invest in associations providing culturally responsive mentorship, technical assistance, and peer learning hubs targeting emerging entrepreneurs.
  • Expand State Small Business Programs: Increase funding for grants, micro-loans, and technical assistance programs, with equity reporting requirements.
  • Bolster CalOSBA Oversight & Reach to Underserved Areas: Mandate annual service gap reports disaggregated by language, race/ethnicity, and geography.
  • Require Multilingual Access: In light of EO 14094, which declares English the official language of the United States, California should proactively guarantee access: require all state-funded programs to provide forms, technical assistance, and trainings in critical threshold languages and increase culturally competent outreach.

“Latino entrepreneurs are poised to shape California’s future economy, but lower earnings and barriers to formal business status keep many from building the wealth and stability they deserve,” said Ong.

“Targeted support, like accessible capital and streamlined regulations, is critical to empower Latino entrepreneurs and fuel equitable economic growth especially in a time where we are seeing major federal rollbacks to support small businesses,” said González, director of research at LPPI. “To unlock Latino entrepreneurs’ full potential, California must strengthen small business programs, expand language-accessible training for immigrant entrepreneurs, and reduce incorporation barriers through simplified processes and increased funding for minority business initiatives.”

Read the policy brief here.

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About UCLA Latino Policy and Politics Institute:

The UCLA Latino Policy and Politics Institute is a non-partisan research institute that seeks to inform, engage, and empower Latinos through innovative research and policy analysis. LPPI aims to promote equitable and inclusive policies that address the needs of the Latino community and advance social justice. latino.ucla.edu.