“Hispanicshoppersalone contributedover$1.9 trillionin2020.Hispanic Americanconsumerswere alsothelargestminority marketwithbuyingpower in2020,withagrowthof 87%overthepast10years.”
NIELSEN CONSUMER IQ 2023
Why do some Latinos/Hispanos from outside the United States perceive their U.S.-based counterparts as having limited economic influence?
In today's globalized world, the economic power of the Hispanic consumer group in the United States has become a force to be reckoned with. However, an intriguing question arises when considering the purchasing power of Latinos living in the U.S.: Why do some Latinos from outside the United States perceive their U.S.-based counterparts as having limited economic influence? This article aims to shed light on this misconception, particularly in relation to Mexican brands that hesitate to advertise their consumer products to their countrymen living in the USA.
The perception of the economic power of Hispanic consumers in the U.S. can vary based on a range of factors, including cultural differences, historical context, and media representation. It is essential to recognize that perceptions are not universally shared and can be shaped by personal experiences, biases, or misinformation.
Understanding the historical context of migration patterns can provide insights into this perception divide. Many Hispanic immigrants in the U.S. arrived with limited resources and faced socio-economic challenges. This initial wave of migration may have contributed to the perception of Hispanos in the U.S. as economically disadvantaged. However, the landscape has changed significantly over time.
Nearly 5 million Hispanic-owned businesses contribute over $800 billion to the U.S. economy annually. Hispanic employer businesses employ about 3 million workers.
The overwhelming majority of Hispanic-owned businesses employ at least one employee, and more than one-third of these businesses employ five workers or more.
The number of Hispanic-owned businesses increased by 14% between 2012 and 2017, more than twice as fast as the national average.
According to the Census Bureau's 2021 Annual Business Survey, there were 375,256 Hispanicowned businesses in 2020, an increase of 8.2% from 2019. These businesses contributed more than $800 billion to the American economy annually and employed about 2.9 million workers.
The highest number of Hispanic-owned firms was in the Construction sector, followed by Transportation and Warehousing; Administrative and Support and Waste Management and Remediation Services. Hispanic-owned businesses also had a strong presence in the Health Care and Social Assistance sector, which had the highest number of businesses with majority Black or African American ownership.
The 2020 Census found that the Hispanic population increased by 23% from 2010 to 2020, reaching 62.1 million people or 18.7% of the total U.S. population. Hispanic entrepreneurs are creating jobs, generating wealth and contributing to the social and economic well-being of their communities and the nation as a whole.
A recent report by LLYC and Expedition Strategies has shed light on the immense economic potential of the Hispanic population in the United States. With a projected purchasing power of $2.6 trillion by 2024, exceeding the GDP of many nations, Hispanics are proving to be a driving force behind the nation's dynamic and resilient economy.
The economic impact of Hispanos in the United States has reached unprecedented levels, with the 2019 Hispano GDP standing as a testament to their remarkable performance. Surpassing $2.7 trillion, the Hispano GDP showcases significant growth from $2.1 trillion in 2015 and $1.7 trillion in 2010. If considered an independent country, the U.S. Hispano GDP would rank as the seventh largest in the world, on par with France and surpassing economies such as Italy, Brazil, and Canada.
The U.S. Hispano GDP is remarkable not only for its size but also its consistent growth. Over the past two years, real Hispano GDP has seen an average growth rate of 5.63 percent, double that of the broader U.S. economy. Since 2010, real Hispano GDP has outpaced real U.S. GDP growth by 57 percent and Non- Hispanic GDP growth by 70 percent. On a global scale, the U.S. Hispano GDP stands as the third fastestgrowing among the top 10 largest GDPs, with the broader U.S. economy ranking fourth.
The $2.7 trillion U.S. Hispanic economy encompasses various industries, providing a deep and wide impact on the nation's economic landscape.
The leading sector within the U.S. Hispanic GDP is Education & Healthcare, contributing $446 billion or 16.4 percent of the total GDP. Following closely is Professional & Business Services, accounting for $327 billion or 12.0 percent, and Finance & Real Estate, contributing $252 billion or 9.3 percent.
These sectors not only drive economic growth within the Hispanic community but also provide a broad foundation of support to the overall U.S. economy.
Contrary to the perception of limited purchasing power, Hispanics in the U.S. have experienced remarkable economic growth and integration. The rise in educational attainment, higher incomes, and increasing socio-economic mobility among the Hispaniccommunity has resulted in a substantial expansion of their purchasing power. This growth has caught the attention of savvy marketers who recognize the importance of targeting this influential consumer segment.
HOWEVER, DESPITE THEIR GROWING ECONOMIC POWER, HISPANICS CONTINUE TO FACE NEGATIVE STEREOTYPES AND DISCRIMINATION.
These stereotypes can have a significant impact on the way that Hispanics are treated in the workplace, in the marketplace, and in society as a whole.
THERE ARE A NUMBER OF THINGS THAT CAN BE DONE TO CHANGE THE PERCEPTION OF THE HISPANIC/LATINO CONSUMER IN THE UNITED STATES.
FIRST
It is important to educate people about the diversity of the Hispanic community. Hispanics come from a wide range of countries, cultures, and socioeconomic backgrounds. It is important to avoid making generalizations about all Hispanics.
SECOND
It is important to highlight the positive contributions that Hispanics make to the U.S. economy. Hispanics are more likely to start businesses than the general population. They are also more likely to be self-employed. Hispanics are also a major source of innovation in the U.S. economy
It is important to challenge negative stereotypes about Hispanics. These stereotypes are often based on ignorance and prejudice. It is important to speak out against these stereotypes and to educate people about the truth about Hispanics.
BY CHANGING THE PERCEPTION OF THE HISPANIC CONSUMER, WE CAN HELP TO CREATE A MORE INCLUSIVE AND EQUITABLE SOCIETY. WE CAN ALSO HELP TO ENSURE THAT HISPANICS HAVE THE OPPORTUNITY TO REACH THEIR FULL POTENTIAL IN THE U.S. ECONOMY.
LDC LATINO DONOR
2021 LDC U.S. LATINO GDP REPORT
LLYC AND EXPEDITION STRATEGIES
UNDERSTANDING U.S. HISPANIC CONSUMERS 2022
DR. DAVID HAYES-BAUTISTA
LA NUEVA CALIFORNIA
GOVERNING ARE LATINOS THE FUTURE OF STATE AND LOCAL ECONOMIC GROWTH?
ASPEN INSTITUTE
DRIVING THE SUCCESS OF LATINO ENTREPRENEURS
NIELSEN
NIELSEN CONSUMER IQ 2023
JEC.SENATE.GOV
FAST FACTS ABOUT THE ECONOMIC STATUS OF HISPANIC AMERICANS
CENSUS BUREAU
CLARITAS
THE 2022 HISPANIC MARKET REPORT
