Study Finds that Without Latinos, the U.S. Economy Would Plummet

Sadly, a stereotypical perception of the Latino community still persists, especially when it comes to large industries and politicians. Latinos are thought of as the last link in the economic and labor chain, but nothing could be further from the truth. If they were an independent country, the GDP of Latinos in the United States would be the fifth largest on the planet, above the United Kingdom, India, France, Italy, Canada, and South Korea, according to a new report.

Researchers Dr. David Hayes-Bautista and Dr. Matthew Fienup of California Lutheran University and UCLA Health released a report on May 16. The report, which was funded by the Bank of America Charitable Foundation, analyzed economic data for Latinos over the last decade. They concluded that this community is vital to sustaining the labor market and the country’s economy.

Economic contribution of Latinos

The economic impact of Latinos was $2.8 trillion in the year 2020. Among the ten largest GDPs in the world, Latino GDP is the third fastest growing over the last decade, only behind China and India. The growth of U.S. GDP without Latinos ranks fifth. Moreover, between 2010 and 2020, the population of this community grew 2.6 times faster than the non-Latino population in the United States. Latino personal income and consumption grew three times faster than that of non-Latinos over the same period. Why is this important?

In economics, it is known that the ingredients that lead to the growth of a country’s Gross Domestic Product (GDP) are more capital (both physical and human), a workforce that is ready to produce, and greater productivity. Latinos offer all of this. Let’s look at some data.

Population growth n Despite accounting for only 18.7% of the population, Latinos are responsible for 65% of the country’s population growth, five times greater than that of non-Latinos in the last decade.

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n The median age for Latinos is 29.5 years old, compared to 40.6 for non-Latinos.

n The educational level of Latinos is growing 2.8 times faster than that of non-Latinos.

Labor force n In 2010, Latinos were 4.5 percentage points more likely to work than non-Latinos. This average increased every year from 2010 to 2020. n Despite accounting for only 18.7% of the population, Latinos were responsible for 73% of the growth in the nation’s labor force in that period. n It is projected that by 2060, the Latino population will include an additional 30 million working age adults.

At the local level

How is this impact translated at the local level? The researchers took the Charlotte Metropolitan Area as an example. Again, let’s take a look at some data.

Latinos generated $12.9 billion in economic activity in Charlotte in 2018. The largest component was personal consumption, which totaled $8.9 billion.

The top five sectors of Latino GDP in the Charlotte Metropolitan Area are: finance and real estate, construction, government services, professional services, and wholesale trade.

Between 2010 and 2018, the labor force participation rate of Latinos in Charlotte was 8.5 percentage points higher than the rate of non-Latinos.

Latinos provide a large and positive demographic impact in Charlotte through the addition of workers and the formation of households. From 2010 to 2018, the number of Latino households increased by 36.5%, compared to 18.4% for non-Latino households.

“Latinos are drivers of economic growth and an important source of economic strength and resiliency for the nation,” the researchers concluded in their report.

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