The expanding Hispanic population in the United States sits at 57 million today and is expected to double by the year 2050. Hispanics are entering the workforce with better educations than in the past and at higher rates. The result has been increased purchasing power, estimated at $1.5 trillion per year.
This increased purchasing power has made the Hispanic community a target for corporate America. Unfortunately, some corporations and individuals look at the growing Latino purchasing power as an opportunity to exploit an unsuspecting population. Case in point, Herbalife’s pyramid scheme.
As has been previously reported, the Federal Trade Commission conducted an investigation into Herbalife’s multi-level marketing operation and determined that Herbalife’s business practice was unlawful. The agency’s complaint against Herbalife details a series of deceptive acts and practices, including establishing an unlawful pyramid program whereby a distributor’s compensation was based on the recruitment of other distributors, and deceiving consumers into believing they could earn substantial money selling diet supplements and personal care products.
Herbalife targeted the Hispanic population, according to Herbalife’s own records which documented Hispanics being responsible for up to 80 percent of the company’s sales. The League of United Latin American Citizens, or LULAC, along with multiple victims pushed back against Herbalife’s deceptive practices and helped bring the issue to the attention of the FTC. As a result of these efforts, the FTC conducted its investigation, filed its complaint and recently forced Herbalife to restructure its multi-level marketing operations and stop its deceptive practices. In addition, Herbalife has been forced to pay $200 million to compensate consumers who suffered loss as result of its wrongful conduct.
The response to Herbalife’s wrongful conduct should be a lesson to all unscrupulous businessman. The Hispanic community will forcefully respond to any deceptive practices and organizations such as LULAC will continue to work to ensure that the Hispanic community is treated fairly.
It is important to note however, that LULAC’s effort to ensure the Hispanic community is being treated fairly goes well beyond responding to deceptive practices. In our view, corporate America must do more than
simply not violate the law as it tries to gain a share of the Hispanic community’s purchasing power. LULAC calls upon these companies to engage in diverse hiring practices which include hiring people from the community and invest in the Latino population by supporting programs and initiatives which help the betterment of the community.
Taking such actions certainly constitutes giving back to a community which helps fuel corporate profits, but it’s also good business. Employing people from the Hispanic community and giving them a voice within the company will help ensure that the corporation fully understands the needs of the community and allow it to better develop products to meet those needs. Further, investing in programs and initiatives within the community raises a corporation’s profile and helps establish good will, which undoubtedly will help increase corporate sales.
LULAC will continue to fight against unscrupulous business practices and work with corporations in an effort to ensure that the Hispanic community is being treated fairly. In the end, we hope to make our increased purchasing power a win-win for the Hispanic community and corporate America.
Wilkes is the executive director of the League of Latin American Citizens, which advocates for the political, economic and educational rights of Hispanic Americas. Follow him on Twitter @BrentWilkes. Follow LULAC on Twitter @LULAC
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