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LinkedInLatinos are America's economic salvation
At almost 58 million and growing, Hispanics make up the largest minority group in the United States.
When it comes to the economic power of this group, consider these figures:
Latinos who live and work in the U.S. were responsible for $2.13 trillion of gross domestic product in 2015, almost 12 percent of the country's $18.04 trillion GDP. And the projections for 2020 are even higher: Latino GDP will account for almost 25 percent of the nation's economic growth, according to David E. Hayes-Bautista, director of the Center for the Study of Latino Health and Culture at the University of California at Los Angeles.
Hayes-Bautista, who spoke at the State of Hispanic Businesses Forum, hosted by Wells Fargo and the four largest Hispanic chambers of commerce in North Texas, said if the Latino GDP were representative of an independent country, it would be the world's seventh largest. It would be topped only by U.S., China, Japan, Germany, United Kingdom and France, and it would be bigger than the GDP of India, Italia, Brazil, Canada or Russia.
In an interview, Hayes-Bautista explained his methodology and his projections.
Explain the concept of Latino GDP and how you came to that number.
For decades, I've researched the Latino contributions to the American society, and I had always noticed the high participation rate on the workforce — the highest of any (demographic) group in 75 years.
I have followed Latino businesses (and their) tremendous growth rate. The number almost doubles every five years.
As the figure most widely understood by people worldwide is GDP because of the size and growth rate, we decided to estimate the Latino GDP, the total value of products and services produced by Latinos.
Then we used the same methods employed by the Department of Commerce, the same databases, so everything matched.
It took us almost a year and a half to finally understand the amount we (Latinos) contribute to the U.S. GDP: $2.13 trillion, which would be the seventh largest GDP in the world.
It was surprising to me. I thought we would be like the 30th economy. But our growth rate is an annual 2.95 percent, 70 percent higher than the non-Latino GDP. We contribute a lot to this country.
Why the difference with the non-Latino GDP?
We keep growing, while the non-Latino GDP often barely grows. Sometimes it doesn't. We're basically the economic salvation to the U.S.
We're a younger population, we're entering the labor force, while baby boomers and whites retire and die.
Each year, half a million white workers leave the workforce after turning 65 years old, while each year one million Latinos turn 18 years old and enter it. We are the future of the nation's GDP.
What are the variables prompting Latinos to become the world's seventh GDP?
One is the work ethic. Not only the workforce participation rate is high we also work more hours per week, and we work more in the private sector, which is the one sector that generates wealth. Government doesn't create wealth, and you see fewer Latinos in the public sector.
We have a good sense of family, and we tend (more than other groups) to form couples with children units, almost doubling the rate for whites. And we don't use welfare that much.
We are very healthy. We live three and a half years longer than whites, we suffer 30 percent fewer heart attacks, 35 percent less cancer, 10 percent fewer strokes. And finally, we are very patriotic.
How much does Texas contribute to Latino GDP?
Here we have about 10 million Latinos, so we can safely say they contribute more than 20 percent of that GDP.
If this is a calculation based on official figures, why hasn't the government done the math before?
I ask myself the same question every week. In California, we Latinos make up 40 percent of the population, the same as here in Texas. However, there are only a few Latino researchers, so research is limited.
But sometimes diversity is not enough for a research group in a lab. That diversity needs to find a voice. I'm a Chicano from the 1960s, and I found my voice. I make my voice heard when I see something wrong.
I was originally educated as an engineer, so I relay a lot to data. And if someone says something off-kilter, I show them the figures.
Your most recent book is La Nueva California: Latinos from Pioneers to Post-Millennials. How much the new generations contribute to that GDP?
The post-millennials are people born in 1997. They're just entering the workforce; they're still studying. The GDP estimate was made with a population with just eight years of schooling, very low-income, and nevertheless they lifted the world's seventh largest GDP.
Their U.S.-born children graduate from high school, they're going to college, they have a lot more human capital than their immigrant parents. So now let's imagine how much more they will be able to do with their investment in education.
There's this view of millennials as a generation born in a digital world, with little political commitment and less urge to work than previous generations.
Latino millennials and post-millennials are very different from whites.
To Anglo post-millennials, their parents gave them a good cultural baggage, they know the arts, they travel to Europe, etc. But parents of Latino post-millennials, almost 70 percent of whom are immigrants, instill in their children values of work, family and honesty.
Post-millennials are said to be somewhat lazy, they don't want to get direction, they're not diligent. I see that among the resident doctors I teach, and faculty members my age complain about that.
I tell them they should select Latino resident doctors because since they were 5, they made the doctor's appointments for their parents, they helped them pay their bills, to get a mortgage, they know about responsibility since they were children.
Latino millennials have fled the anti-immigrant rhetoric all their lives. White millennials aren't bothered by anything.
Why doesn't the private sector invest as much in Latino businesses?
At least half of Latino businesses lack employees. They're very small, almost micro-businesses. And an additional 20 or 30 percent employ just one worker or family members.
For me, the key is not persuading Latinos to start something, but to make its growth easier.
What would be your pitch to persuade the anglo business sector to invest in Hispanic entrepreneurs?
I would tell them their investment is not philanthropy, nor charity. It's an investment. They will get a return from that investment.
This Q&A was conducted, edited and condensed by Jenny Manrique, a reporter with Al Dia, a Spanish-language publication of The Dallas Morning News.
CORRECTION, 11:27 a.m., January 16, 2019: An earlier version of this story incorrectly translated GDP amounts as billions. Latinos who live and work in the U.S. were actually responsible for $2.13 trillion of gross domestic product in 2015, almost 12 percent of the country's $18.04 trillion GDP.
Source: Published originally on Dallas News, Latinos are America's economic salvation, by Jenny Manrique, January 10th, 2019.
