U.S. Latinos Play Increasingly Significant Economic Role

"Despacito,” Luis Fonsi’s and Daddy Yankee’s smash single, served as an important reminder of the booming cultural prominence of Latinos in the U.S. The song, with a 16-week run at the top of the Billboard Hot 100, tied the  record for the longest run in the number one spot.  This is especially significant since the lyrics are mostly in Spanish (note that the original version of the song, as opposed to the chart-topping version that is a remix, is entirely in Spanish). This continuing cultural prominence can be felt everywhere, and it extends beyond music. For instance, consider general market retailers. Recently, I noticed that the produce sections of my local supermarket locations now feature chayote, nopales, tomatillos, and at least half a dozen kinds of fresh chili peppers. Besides this cultural impact, it’s important to emphasize that U.S. Latinos have been making a notable economic impact.

The Latino Donor Collaborative (LDC) attempted to quantify the economic impact of Latinos in the U.S. by estimating the Latino GDP (gross domestic product) attributable to the economic activity of U.S. Hispanics. The findings are helpful in illustrating the depth and breadth of the economic impact of this demographic. In 2015, according to the study, the 55 million Latinos in the U.S. produced a GDP of $2.13 trillion. To provide some context, in 2015, the U.S. Latino GDP was the seventh largest in the world—larger than that of India, Italy, Brazil, and Canada. Additionally, from 2010–2015, the compound annual growth rate (CAGR) of the U.S. Latino GDP was the third fastest in the world.

The LDC report also focuses on an economic area often neglected in previous studies on the economic impact of the U.S. Latino population: workforce participation. This is especially critical as the Baby Boomers retire from the labor force and increasingly depend on the resources generated by those still working. The study found that, from 2010 to 2015, 70% of the growth in the labor force was the result of Latinos joining. It also found that U.S. Latino workers accounted for nearly all the growth in the mature workforce segment (ages 25–64) from 2010 to 2015. 

Another important feature of the U.S. Latino population that contributes to its strength from an economic perspective is its youth. In 2015, the median age of the non-Hispanic U.S. population was 40, while that of U.S. Hispanics was 28. This characteristic is often mentioned in studies of the U.S. Latino population, but the LDC study explores a little more broadly its implications from a workforce perspective. As previously outlined, young Latino workers are fueling the civilian workforce just as non-Latinos workers are aging into retirement. The same impact is occurring on the non-civilian (i.e., military) side. In 2015, Latinos accounted for more than one-quarter (25.7%) of all Marines age 18–24 and more than one-fifth (22.2%) of all U.S. Army soldiers in the same age range.

In addition, all this dynamic productive activity on the supply side has been generating demand for products and services and will continue to do so. Nielsen now predicts that Hispanic buying power, which hit $1.4 trillion in 2016, will reach $1.8 trillion by 2021. This represents a tremendous opportunity. The data clearly show that the U.S. is in the midst of a profound demographic shift—one that is having a positive impact on economic growth. The growing significance of Latinos in the U.S. has enormous implications for all sectors of society but especially for content publishers and consumer marketers. It’s important that content and marketing professionals consider the bottom-line economic significance that Latinos are having and will continue to have over the coming decades. Engaging the U.S. Latino population should be a strategic consideration for growth across all sectors. During this era of demographic transformation, publishers and marketers that aren’t already considering U.S. Latinos in their growth plans should look to seasoned veterans in media and at agencies as partners as they seek to connect with U.S. consumers. 

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