How Latino-Owned Businesses Have Become the Economic Heart of Some US States

New Mexico, Texas, Florida and California are home to the largest number of Hispanic- and Latino-owned businesses

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November 10, 2022 | 02:50 PM

Bloomberg Línea — California, Florida, Texas and New Mexico are the main centers of Latino entrepreneurship in the US, and those states’ economies would suffer severely without the participation of this community, according to a new study.

A Créditos En USA study, using data obtained from the most recent (2019) US Census, found that Latino- or Hispanic-owned businesses contribute $1.85 trillion in revenue to the US economy and employ nearly 11.7 million people in the country.

Given that the size of the population and economy varies greatly from state to state, if only the largest number of majority Latino-owned businesses were taken into account, California is the state with the most businesses (307,189) and the largest number of people (2,663,956) employed by them.

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Where are Latino businesses concentrated?

Taking Latino businesses across the United States as a proportion of the total into account, New Mexico leads with 18.22% of the total number of companies in the state, where there are 19,660 companies generating 208,514 jobs.

According to the analysis, without Hispanic entrepreneurs, New Mexico would lose nearly one-fifth of its businesses, most of which are in sectors such as transportation and warehousing; arts, entertainment and recreation; healthcare and social assistance; and construction.

Also, 69% of these companies in New Mexico are on the higher end of the scale in terms of sales.

In Texas, Latino companies generate 2.56 million jobs, and and one-eighth of companies in the Lone Star state belong to entrepreneurs of Latino origin. These companies are in sectors such as transportation and warehousing; food and hospitality; and construction.

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Texas is the third-most Latino-dependent economy in the US. Out of 1,629,258 registered businesses in Texas, 213,880 are Hispanic-or Latino-owned, representing 13.13%. While significantly higher than in other states, this figure remains largely unbalanced compared to the 40.2% Latino population in Texas.

As a measure of the impact, one in five jobs in transportation and warehousing, healthcare and social assistance in Texas is dependent on Hispanic-owned businesses, as are more than 15% of jobs in lodging and food services, administration and support, waste management, and finance and insurance.

Sectors such as transportation and warehousing; wholesale trade; healthcare and assistance; and finance are the most representative of Latino-owned businesses in Florida. In the Sunshine state there are 286,399 companies, representing 16.53% of the total, and they generate 1,793,825 jobs.

As with New Mexico, more than half of those businesses in Florida are at the high end of the scale in terms of sales.

“Hispanic owners tend to do better than the average US business owner in terms of revenue. New Mexico is an excellent example of the importance of the Hispanic community to a state’s economy, although our experience paints a much more complicated picture behind the scenes. The financial tools available to Latinos present a particularly common challenge. If entrepreneurial activity were proportional to population share, Latinos should have three times as many business owners as they do today,” acording to Créditos USA.