Bloomberg Línea — In recent years, the Latino and Hispanic communities in the United States have become an economic and social force that has given the country a very dynamic imprint, influencing the entire sphere of national life.
From the fact that together they generate an economic output of $2.8 trillion (more than Brazil and Mexico combined) to the fact that they are one of the groups with the most dynamic consumer power, Latinos are seen as a force that moves markets and sets consumption and spending trends.
Hispanic Heritage Month. When? Why?
Since 1968, US presidents have proclaimed a period, usually in September, to recognize the achievements and contributions Latino and Hispanic communities have made to the country.
In 1968, President Lyndon B. Johnson instituted a Hispanic Heritage Week. Then, in 1988, Ronald Reagan proclaimed the first Hispanic Heritage Month, starting September 15 and running through October 15.
Those dates are relevant because several Latin American countries celebrate their independence anniversaries at around that time.
This year, on September 14, President Joe Biden took the stage in the White House to proclaim National Hispanic Heritage Month, stating that “we reaffirm that diversity is one of our country’s greatest strengths. We also acknowledge the Hispanic leaders who have stayed in the struggle for equal justice to ensure that everyone in this nation can contribute their talents and have the opportunity to thrive.”
Based on that spirit, here’s a list of 10 facts highlighting the economic weight of Latinos in the US:
62 million Latinos
Halfway through the month that the US has designated as the month of Hispanic Heritage (September 15 to October 15), the Latino population in the country already exceeds 62 million, according to the US Census. That represents almost one-fifth of the total US population, 19%. In absolute terms, one out of every five Americans is Hispanic or Latino. As a result, this community has become the largest ethnic minority in the country, surpassing African-Americans.
Latino GDP: $2.8 trillion
If the Latino population in the US were a country as such, it would be the fifth-largest economy in the world, behind the United States, China, Japan and Germany, and surpassing the United Kingdom, India, France, Italy, Canada and South Korea. In fact, according to the Latino Donor organization, so-called Latino GDP would be much higher than the combined total of the two largest economies in Latin America: Brazil ($1.44 trillion) and Mexico ($1.07).
Purchasing power: $1.7 trillion
Latinos have become a huge consumer force in the US. According to L’Attitude, an organization that promotes the advancement of Latino executives in the US, the purchasing power of the communities has grown 70% faster than other groups. In one decade, it has grown from $213 billion to the current figure. A study by the University of Georgia indicates that the purchasing power of Hispanics in the US went from representing 5% in 1990 to 11.1% in 2020.
1 million Latinos will be over 18 every year
According to L’Attitude, starting in 2022 and every year until 2042, 1one million people of Latino or Hispanic origin in the US will turn 18. This data is relevant for those analyzing consumer trends. While the official age of adulthood in the US is 21, in Latin America the standard is 18, that is, when parents give their children more freedom. This means a greater personal decision when it comes to consumption.
Consumers for almost 6 decades
By making decisions about their consumer lives at a young age, Latinos in the US have an effective buying power of 56 years, says L’Attitude. This is more than 20 years longer than non-Latino whites. In other words, Latinos have two decades more as active consumers than the largest US ethnic group.
93% growth in home improvement products
‘Home Improvement’ is not only the title of one of the most successful series in the history of US television, but also a very appetizing business niche for millions of companies in the country. This is why the data reported by L’Attitude is relevant: 93% of the growth in sales of home improvement products and services comes from Latinos in that country. In addition, Latinos also account for 73% of the growth in cell phone sales, and 79% of the growth in the purchase of luxury automobiles.
75% spend through digital channels
Firms such as those that make up the so-called FAANGs (Facebook, Amazon, Apple, Netflix and Google) are salivating over a fact reported by eMarketer: By 2025, Hispanics will account for 12% of total purchasing power in the US, and 75% of this demographic’s spending will be through digital channels.
52% of new job creators
In economic terms, US-based Latinos are not only driven by consumption, but also by business. The entrepreneurial spirit that comes from their countries of origin is reflected in their new nation, where, as the Latino Donor group says, the community represents 80% of new additions to the workforce and 52% of the generators of new jobs, thanks to the establishment of new businesses. “The increase and strength of Latino human capital results in a powerful economic engine” for the United States, said Sol Trujillo, co-founder of Latino Donor, at the presentation of the 2022 Latino GDP Report.
12% (or more) work in their own business
According to New American Economy, Hispanic immigrants tend to have a greater “entrepreneurial spirit” than the general US population. This is reflected in the fact that more than 12% of the entire Hispanic immigrant workforce works in their own businesses. The organization reports that this figure means that Hispanics are 30.6% more likely to own their own business than other US residents.
2.5 million entrepreneurs
The New American Economy offers a compelling statistic: At the beginning of 2020 (i.e., prior to the Covid-19 pandemic), there were 2.5 million Hispanic entrepreneurs in the US, a number that underscores the weight of the demographic’s purchasing power and contribution to the economy and production, as well as tax contributions.