The Hispanic community has always been an active and prominent participant in social and economic activities. This community has shared its culture, and knowledge with everyone with whom they create friendships. Their financial influence is also very significant in the economy. This heritage month we look at their achievement and celebrate their economic prowess. Latinos are part of the key drivers of economic growth, innovation, and entrepreneurship, contributing trillions to the economy and reshaping industries across the board. A published Bank of America report declared that they added $1.3 trillion to the GDP of the nation, which is more than two times their contributed amount in 2010 which was recorded as $661 billion. Their economic contribution is a manifestation of their qualities, hard work, resilience, and harnessing of their potential in the Hispanic community.
In 2021, the Latino community’s economic value was bigger than the entire state of Florida, more than most US states. California, Texas, and New York were the only states which had a greater output than Latinos. The Latina-driven economic activity grew a real 51% between 2010 and 2021.
The Hispanic communities’ buying power is influenced by its young population. With a median age of 30 years compared to 38 years for the general U.S. population, Latinos are youthful and thus more adaptable to the technologies of modern times. This youthful energy helps in the growth of sectors such as technology and entertainment, food industries, fashion, and financial services. As brands across industries seek to appeal to the next generation of consumers, many are recognizing understanding and catering to Latino tastes, values, and preferences. Companies that have successfully tapped into Latino culture can build brand loyalty and trust with this community, a key to success in today’s highly competitive market.
Despite these impressive figures, many economists argue that the reflection of the Latino community’s contributions to the economy. A substantial portion of their work, especially in caregiving roles, goes unpaid and unrecognized. For instance, numerous Latinos offer childcare services, often for neighbors or extended family, enabling others to engage in the workforce. While this unpaid labor may not be included in GDP calculations, it is an essential part of the overall economy.
Professor Belinda Román from St. Mary’s University highlights this data gap, emphasizing that much of the caregiving performed by Latinas is overlooked in official statistics. Additionally, Professor Mónica García-Pérez from Fayetteville State University points out the difficulties Latinas encounter in sectors like retail and hospitality, where high turnover rates complicate the assessment of their complete economic impact.
Latinos, are a very entrepreneurial community, according to the Stanford Latino Entrepreneurship Initiative Latino-owned businesses increased by 34% in the last decade. Latino entrepreneurs are creating new companies that contribute to job creation and meaningful contributions to their local economies. Some of the businesses Latinos are creating are in construction, hospitality, and retail which are both succeeding and also there is a greater presence of companies in tech, finance, and healthcare. Besides its domestic market, Latino-led startups are expanding abroad and can use language and culture to their advantage. As this pattern continues, Latino entrepreneurs are leveraging the unique opportunities presented to them.
The community is achieving positive outcomes in the job market with nearly 30% of Latinos employed in various fields and industries. As a matter of fact, along with the growth of diversity in people who are in job management, business, and professional roles, there is also an increase in the number of Latinos in these positions. This has been happening for several years, which also reflects a progression in education and careers.
Understanding that education is the key to success motivated the Latino community to make that change. As Latinos continue to get higher education, they are also taking up more STEM (Science, Technology, Engineering, and Mathematics) jobs, which are among the U.S.’s talent sectors. This is to be celebrated as they are tapping into an ever-expanding mass of knowledgeable society. This is not only bridging the gap in the labor market but also incessantly uplifting the Latino community’s input to the economy through its continuous transformation and extension. They are not just the buyers and workers; they are the rule makers and influencers, especially in the areas of media, and marketing. The culture of Latinos is the one that impacted and influenced mainstream American culture the most, through the acceptance of reggaetón and Latin pop on a global scale to the integration of Latino cuisine and fashion. Since the demand for a variety of characters and actors in the movie industry and advertising is increasing, Latino voices are the ones that are at the forefront, guiding the advertising of products and the storytelling for their community.
It is imperative to acknowledge and celebrate the strides that Latinos have made in carving a space for themselves and economic prosperity, that has initiated the rise of wealth among the Latino community. The most recent data from The Hispanic Wealth Project reveals that Latino families’ wealth has tripled during the last ten years having reached this goal earlier than the organization’s initial point set for this project. In 2022, the average wealth of the Hispanic family jumped to $63,400 — an increase of 3.17. The HWP says that factors such as the elevation of homeownership, the rise of property values, and the meteoric ascent in the number of Latina-owned companies all have contributed to this upward growth process.
The economic contributions of the Latino community is undeniable and growing stronger by the day. Whether through entrepreneurship, workforce contributions, or consumer spending, Latinos are an essential part of the U.S. economy’s future. However, challenges remain, including access to capital for Latino-owned businesses and the persistent wage gap between Latinos and their non-Latino counterparts. Addressing these barriers will be critical to unlocking the full potential of this vibrant community.
As policymakers and business leaders look ahead, recognizing the unstoppable power of the Latino community is not only essential for promoting economic equity but also for ensuring the continued growth and competitiveness of the U.S. economy as a whole