- Leire Ventas
- Correspondent for BBC News Mundo in Los Angeles (USA)
9 hours ago
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One in five Americans is Latino
Today, according to the US Census, one in five Americans is Hispanic. By 2060, one in four will be Latino, for a total of 119 million.
There is therefore no doubt that this community plays a fundamental role in the economy of the world’s greatest power.
And the numbers don’t lie.
For example: Latinos in the US bring in $2.8 trillion annually (ca and Mexico.
“If it were an independent country, it would be the fifth largest economy in the world with a gross domestic product (GDP) greater than that of the UK, India or France,” says Sol Trujillo, cofounder and chair of the board of directors of the Latino Donor Collaborative ( LDC ), an independent, selffunded organization whose aim is to highlight the socioeconomic role of this ethnic group.
This is the conclusion of a recently published report that his organization commissioned with experts from two Californian universities.
And that’s a similar number to that of the United States Hispanic Chamber of Commerce (USHCC), another Washingtonbased organization, and consultancies like McKinsey or the think tank Pew Research Center.
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The purchasing power of Latinos increases with rising wages
‘Latin GDP’
GDP is a fundamental indicator of the economy: it is used to indicate how much wealth a country is generating, as well as the size and composition of its economy.
It measures the monetary value of all end products and services (purchased by the end consumer) produced within a country by residents and nonresidents.
But how do you do this calculation when talking about a specific population group?
“It was not an easy task,” Dan Hamilton, economics director at the Center for Research and Forecasts at Lutheran University of California and lead author of the LDC US Latino GDP Report 2022, told BBC News Mundo, the BBC’s Spanishlanguage news service. , report mentioned at the beginning of this article.
“The data used to measure GDP is generally not broken down by ethnicity or race, so we had to crosscheck it with official US government data by ethnicity,” he explains.
“We have to analyze large amounts of data, we create maps from datasets that we match against other datasets and so on, until we can calculate the appropriate proportion of the various components of GDP for Latinos.”
And so we came to estimate that the “Latin GDP” in 2020 was $2.8 trillion, while that of 2015 was $2.1 trillion and that of 2010 was $1.7 trillion.
“If we think about a country’s GDP, only the USA, China, Japan and Germany had a higher GDP in 2020,” emphasizes the economist.
The study also found that “Latin GDP” shrank during the pandemic, but less than that of other ethnic groups, such as nonLatin whites: 0.8% versus 4.4%.
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The food industry remains one of the top employers for the Latino population in the United States
But that wasn’t the only conclusion they made when crossing the data.
Specialists also noted that if we consider the “Latin GDP” as a country, it was the third country that grew the most over the past decade, behind only China and India.
“But Latino economic success is in many ways linked to US economic success and vice versa. They are inevitably intertwined,” says Mark Hugo López, director of research on race and ethnicity at the think tank Pew Research Center.
López, like all the experts interviewed for this article, points out that the growing influence of this group on the economy is partly due to its high population growth.
“There’s nothing unexpected or magical about this: Latinos are a fastgrowing population, and as a result, their economic influence is growing fast, too.”
Over the past decade, the Latino population in the United States has increased by 19% from 50.5 million in 2010 to 62.5 million last year while that of the country as a whole has increased by just 7%.
Additionally, Hispanics played an important role in US population growth during this period: the US population grew by 23.1 million, 52% of them Latinos; and specifically between 2019 and 2020, they accounted for 65% of the country’s population growth.
workforce
“Latinos are also a young population, which helps them make up a larger proportion of the country’s workforce,” Lucy Pérez, a partner at McKinsey Consulting and coauthor of The Economic State of Latinos in the US report, tells BBC News mundo : Determined to Thrive, published November.
According to data from the Pew Research Center, 25% of young Americans are Hispanic today.
Likewise, more and more people in this group have higher education. “Academic growth has been five percentage points over the last decade, a very high growth,” Pérez emphasizes.
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More and more Latinos have college education
“It gives them access to better jobs with higher wages and more benefits, all of which help accelerate economic growth.”
The prospects for Latinos in the labor market have also changed with the various waves of immigration and the increase in the number of nativeborn Americans (from 59.9% in 2000 to 67.3% in 2019).
And over the course of a decade, the number of Latinos working in business, finance, or as executives has increased from 6.7% to 8%.
huge market
The purchasing power of Latinos is also increasing and as consumers they already form a US$1.8 trillion market.
“Latinos in the US represent a larger consumer market than the overall economies of countries like Canada and South Korea,” the LDC report states.
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Latinos in the United States represent a $1.8 trillion consumer market
Despite this, their spending does not correspond to the percentage of the population they represent.
That’s partly because there’s a significant pay gap among white nonHispanic workers, for example, notes McKinsey’s Lucy Pérez.
“They make up 19% of the population but proportionally spend 13%. If that gap were closed, they could contribute up to $550 billion more to the economy.”
According to all respondents, another indicator of the importance of this community in the US economy is the increase in the number of Latinos with their own homes.
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The number of Latinos homeowners is growing at a record pace, fueled by young homebuyers
The rate is growing at a record pace, driven mostly by young buyers, and is changing the real estate landscape in many parts of the country.
According to the latest data from the National Association of Hispanic Real Estate Professionals (NAHREP), 48.4% of Latinos owned a home in 2021, compared to 47.5% in 2019.
“Having your own home rather than renting it is important because it allows you to generate family wealth on top of income,” says Hamilton. “It’s an important aspect of a family’s longterm economic vitality.”
entrepreneurial efficiency
Also, “Latinos are the most enterprising group,” says McKinsey’s Pérez. “One in 200 Latinos opens a store every month. That goes very quickly.”
There are 4.7 million Latinoowned businesses in the country. According to the latest figures from the Hispanic Chamber of Commerce, they generate more than $800 billion annually.
However, lack of access to bank credit remains one of the biggest obstacles for Latin American businesspeople, Ramiro Cavazos, president and director of this institution, tells BBC News Mundo.
The same reasoning is found in the McKinsey report, which calculates that if Latin American companies could access capital and increase their presence in growth sectors, they would contribute an additional $2.3 trillion in revenue to the US economy.
They would also create 750,000 new businesses that would create more than 6 million jobs, he adds.
Be that as it may, all of these calculations are based on individuals who selfidentify as Latinos or Hispanics, and this includes those born in the United States of Hispanic ancestry and immigrants, both legal and undocumented individuals.
“There may be a particular population that we don’t count, that doesn’t show up in the statistics, or that doesn’t identify as Latino despite their ancestry,” admits Pew’s Mark Hugo López.
“In that case, the numbers would be even higher,” he adds.
“If there’s bias or measurement error, it’s because we’re talking about very conservative numbers,” Hamilton agrees.