If U.S. Latinos were an independent country, their gross domestic product would rank fifth in the world, surpassing those of the United Kingdom, India and France, according to a report released Thursday.
The economic output of Latinos in 2020 was $2.8 trillion, up from $2.1 trillion in 2015 and $1.7 trillion in 2010, according to a report by the Latino Donor Collaborative in partnership with Wells Fargo. LDC is a nonprofit, nonpartisan group focused on reshaping perceptions of U.S. Latinos through data and economic research.
In terms of personal consumption, U.S. Latinos “represent a consumption market larger in size than the entire economy of nations like Canada or South Korea,” the study found, reflecting Hispanics’ gains in personal income through higher labor participation and educational advancement. In 2020, Latino consumption was measured at $1.84 trillion.
“This report proves that our country’s biggest growth opportunity lies in our U.S. Latino cohort,” said Sol Trujillo, a co-founder and the chairman of the board of the Latino Donor Collaborative. “We’re talking about not just population growth and workforce growth, but also economic growth in terms of wealth creation, businesses formed, homes purchased, products purchased, movie tickets and sports tickets bought, streaming subscriptions, you name it.”
Latinos, who make up 19% of the U.S. population, are responsible for more than half of the U.S. population growth from 2010 to 2020 and more than 65% of the population growth from 2019 to 2020. Latinos make up about 25% of American youths.
Three-quarters of the Latino population were concentrated in just 10 states in 2020: Arizona, California, Colorado, Florida, Georgia, Illinois, New Jersey, New York, North Carolina and Texas.
According to the report, Latino growth staved off a decline in the population and labor force in three states — New Jersey, New York and Illinois — from 2010 to 2018.
That is important because “growth is what impacts tomorrow,” said one of the authors of the report, Dan Hamilton, the director of economics at the Center for Economic Research and Forecasting at California Lutheran University. “What happened yesterday is impacting today.”
Even though studies show that the Covid pandemic took a toll on Latinos personally and financially, the report found that Latino economic output went from being equivalent to the world’s eighth-largest GDP at the start of 2020 to the fifth largest when the year ended.
The report also found that Latinos’ wages and salary incomes grew more than those of non-Latinos from 2010 to 2020, although there is still a substantial wage gap for Latinos compared to non-Latino whites.
Despite the pandemic, Latino real wage and salary income shot up by 6.7% in 2020, while it shrank by 1.1.% for non-Latinos.
“What we see — not only in the GDP, but in all the other data that we’re looking at — is that Latinos and Latinas prevailed. They powered through,” Hamilton said. “They may have gotten sick from Covid sometime in 2020, but two or three weeks later they were back on the job.”
Hamilton said that while the data showed a decline in labor participation among the non-Latino population after the Covid pandemic, “for Latinos, it rose,” he said.
As a result, Latino real GDP contracted a small amount in 2020, by 0.8% compared to 4.4% for non-Latinos.
In terms of homeownership, Latino households grew by 29.2% from 2010 to 2020, compared to 5.8% for non-Latinos. However, Latino homeownership still lags behind non-Hispanic white homeownership.
In education, the number of people with bachelor’s degrees or higher grew 2.8 times more rapidly for Latinos than for non-Latinos from 2010 to 2020.
While Latinos still lag behind whites in college attainment — 22% of Latino adults 25 and older have associate degrees or higher, compared to 39% of all U.S. adults — the number of Latinos with a bachelor’s degree or higher increased by 13% in 2020.
The findings are being released as part of a series of reports on Latinos that are being discussed at L’Attitude, a conference examining the state of Latino leadership, participation and representation in corporate America, as well as in the public, media and entertainment sectors. The conference, taking place in San Diego from Thursday to Sunday, examines issues around topics from wealth building to health disparities. Speakers include former President Barack Obama and the CEOs of several companies, including Nike and Accenture.
The report is based on data from 2020, the most recent year for which information is publicly available. It includes data from the Census Bureau, the Bureau of Economic Analysis and the Bureau of Labor Statistics, among others.
“U.S. Latinos are leading the growth in every category. This is why every business needs to understand that investing in this cohort and catalyzing more growth is essential for shareholders, employees and customers,” Trujillo said.