Report highlights Latin American growth, spending power

Latin Americans around the world are significantly shaping the U.S. economy, according to a new study published by the Latino Donor Collaborative and sponsored by Wells Fargo. The 2023 Latino GDP Report was released at a 7:30 a.m. media briefing at the opening of the 2023 L'ATTITUDE Conference, being held Sept. 27 to 30, 2023, at the Miami Fontainebleau Hotel.

Co-authored by Arizona State University economists Dennis Hoffman and José A. Jurado, who respectively serve as director and principal investigator at ASU's L. William Seidman Research Institute of the W. P. Carey School of Business, the report examined the $3.2 trillion global Latino economy and its impact on U.S. business and gross domestic product and income levels.

"Latinos' economic influence continues to expand rapidly," the authors wrote, noting that income levels grew 4.7 percent in the period between 2011 and 2021, providing trillions in new investments in American entrepreneurship and representing "the third-fastest growing among major economies, trailing only China (7.7%) and India (6.2%)."

Ana Valdez, CEO and president of the LDC, thanked ASU researchers for their detailed analysis. "For the first time, our report provides a breakdown by state and more information on rapidly emerging Latino markets," she said in a statement. "This not only prepares businesses to better understand their customer value, but it also provides useful data for policymakers, think tanks, and exporters to use for comparisons."

Exponential growth

In addition to examining the global Latino community, LDC's sixth annual report highlighted U.S. Latino contributions, which researchers noted are growing two-and-a-half times faster than the non-Latino demographic.

Following are additional research highlights:

• Multi-billion GDI contributions: Latino contributions to GDI (gross domestic income) reached $250 billion in California, $166 billion in Texas, $104 billion in Florida and $51.5 billion in New York.

• Collective purchasing power: Consumption and purchasing power grew 2.1 to 2.4 times faster than non-Latino counterparts. 

• Workforce growth: U.S. Latinos account for 78 percent of workforce growth, representing the highest workforce participation rate of any group.

• Homeownership: U.S. Latinos account for over half of all the new homeowners in the country and 68 percent of the net new car purchases.

• Household spend: Household spending has surpassed non-Latino counterparts by 16 percent annually. In total, U.S. Latino households possess $12.8 trillion in net worth.

"Latinos play a significant role in bolstering the U.S. economy through three primary channels: population growth, a high degree of workforce participation, and increased productivity linked to educational attainment," researchers wrote. "From 2010 to 2021, the Latino population saw a surge of 12.1 million individuals, one million more than the non-Latino population. This constituted 52% of the total U.S. population growth during that time, translating into a 24.1% increase in the Latino population, compared to a 4.3% rise among non-Latinos."

Three-pronged analysis

The report assessed Latino contributions through three lenses, which researchers summarized as follows: contributions made "by and on behalf of" Latinos, productive activities earned from Latino income or GDI, and purchasing power of Latinos.

The LDC credited Hoffman and Jurado for refining the pioneering research and methodology originally developed by Dr. Werner Schink, who had notably analyzed seven categories of Latino economics: consumption, residential investment, nonresidential investment, inventory adjustment, exports, imports and government purchases.

"In 2023, ASU researchers refined this methodology for the Latino GDP report," LDC representatives wrote. "They identified several ways the Latino community impacts the U.S. economy, including one method that captures GDP-linked expenditures made by or on behalf of Latinos."

Michael M. Crow, president of ASU, praised LDC and researchers, stating, "The data collected by The Seidman Research Institute at ASU's W. P. Carey School of Business offers insight that reveals an unprecedented opportunity for businesses, policymakers, and educational institutions to adapt, innovate, and prosper in tandem with this demographic."

A copy of the report is available at www.latinodonorcollaborative.org/original-research/2023-ldc-u-s-latino-gdp-report

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