By Dr. Ricardo Romo
Nearly 60 million Americans are of Latino descent and they live in every state and U.S. Territory. They are the nation’s largest minority group and constitute 18% of all Americans. Indeed, there are nearly five million Latinos residing in Los Angeles County alone. San Antonio is now 65% Latino and growing.
Researchers have recently published studies on the rising impact of Latinos on the economy and their increasing consumer influence of this ethnic group. The study findings are quite surprising. This essay reviews some of those findings.
Our story begins with a report published by Barron’s this past September titled “Latinos are the Future for U.S. GDP Growth. ” The article presented the findings of scholars from the University of California Los Angeles [UCLA] and California Lutheran University [CLU]. The university researchers, reported by Barron’s, concluded that if Latinos were their own country they would “be the eighth-largest economy in the world, just behind France.” The Gross Domestic Product [GDP] value for American Latinos was estimated at $2.3 Trillion in 2017. This is a startling observation given that Latino economic power is
now greater than the economies of Brazil, Canada, Russia, or Mexico.
Dr. David Hays-Baustista, a prominent UCLA scholar, and other key researchers for the study told Barron’s that “Latinos are the cavalry coming to the rescue of the insufficient workforce in America.” He noted that Latinos provide both quantity and quality of workforce. Having studied Latinos for the past four decades, Hays-Bautista offered that “Latinos pay taxes, believe in education, have a strong family culture, are law-abiding, optimistic, young and they serve our country.”
Professor Hays-Bautista joined with the Latino Donors Collaborative [LDC], a California non-profit organization dedicated to reshaping the perception of Latinos as part of the American social mainstream to issue a report on the economic impact of Latinos. The LDC report found that the purchasing power of Latinos has been on a steady growth pattern since the 1980s. The LDC report estimated that Latino purchasing power had grown 70% faster than that of Americans in general with a projection of $1.7 trillion in 2020. Thus the “Latino Nation” within the United States buys as much in terms of American goods and services as most European or Latin American countries.
Writing for Forbes magazine in February, 2019, Mayra Rodriguez Valladares found other researchers to corroborate the UCLA/CLU study. Citing the research of Gonzalo Huerta and Jacob Funk Kirkegaard, Valladares titled her commentary “Hispanics, Not Trump, are the Biggest Engine of U.S Economic Growth.” The studies both noted that Latinos are central to the continued rise of home ownership among American families.
Over the past decade, Latinos have emerged as major players in the housing market, making up 50% of all new home buyers according to the Latino Donors Collaborative. Latinos are buying homes in cities like San Antonio where Latinos make up 65% [807,000] of the population. Gilbert S. Gonzalez, San Antonio Board of Realtors President and CEO, points out that San Antonio’s housing market is among the most affordable of the large cities in Texas. He added, “That affordability combined with job growth across many industries like tech, medical, and military make this a desirable place to buy and sell property.”
Home ownership for San Antonio Latinos is in fact among the highest in Texas due largely to the reasonable
cost of homes. With a median home list price of $218,000, many Latino working families can afford to buy their own homes in San Antonio. Austin’s median list price of $350,000 for homes is $130,000 greater than that of San Antonio. Home ownership is also notable in Houston’s Latino community of nearly one million residents.
A notable challenge for Latino families is finding work that pays a living wage and offers some type of health and retirement benefits. The median income for all Latinos in Texas is $44,579 compared to the state median of $56,565. Latinos earn less than most Texans because they are clustered in low-skilled work where hourly wages are below the state’s median. Among the jobs employing the largest number of Latinos are construction; restaurant and food industries, and service related jobs in hospitals, schools, and health industries. Many of these jobs pay hourly wages of between $10 to $15 dollars and offer few benefits.
The Federal Reserve of Dallas found that median household income rises to $49,900 for Hispanic households headed by a U.S. native, compared to $38,580 when the head of the household is foreign born. The same study noted that a “greater share of Hispanics
live below the poverty line [22 percent] than the overall share of the state population in poverty [16 percent].”
Still there are reasons to be optimistic. According to the Latino Donor Collaborative, Latinos are “creative, risk-takers and resourceful, and they create 87% of all new businesses in America.” Moreover, Latinos are responsible for 82% of the growth of the U.S. labor force since the Financial Crisis of 2008 according to the LDC report. In the coming decades, America’s Latinos will play an even larger role in driving the nation’s economic growth, as will Latinos in Texas.