Latinos Are Fueling the U.S. Economy's Growth
- As Highlighted by a New NERA Economic Study Sponsored by RBC Capital Markets and the Latino Donor Collaborative -
NEW YORK, Dec. 6, 2016 /PRNewswire/ -- A new economic study shatters many myths associated with the U.S. Latino community and shows that this growing segment of the U.S. population is more educated, more employed, more entrepreneurial and more engaged than many previously believed and increasingly is a major driver of U.S. economic growth.
The study, Making America Rich Again: The Latino Effect on Economic Growth, sponsored by RBC Capital Markets (RBC) and the Latino Donor Collaborative (LDC), and authored by NERA economist Jeffrey Eisenach, shows that Latinos are driving job creation, income growth and new business formation for the country as a whole. Latinos are much younger than the general population. They are going to college in greater numbers and are more active users of smartphones and the internet. According to the study, such factors will only reinforce Latino-driven economic growth well into the future as this youthful Latino population continues to grow, and as more Latinos go to college and start new companies.
"We partnered with the LDC and NERA on this groundbreaking economic study better understand one of our most important marketplaces," said Blair Fleming, Head of U.S. Capital Markets and U.S. Investment Banking at RBC. "It affirms that Latinos are a vital part of the U.S. economic ecosystem, poised to continue fueling the nation's economic growth with high labor force participation, rapid increase in purchasing power, population growth and entrepreneurial activity."
Among the study's key findings are:
- Latinos are creating new businesses faster than other Americans. Latino-owned business grew by 46 percent 2007-2012, compared with a decline of more than two percent in non-Latino businesses.
- Those Latino-owned businesses are hiring. Headcount in Latino-owned businesses increased 22 percent 2007-2012, against a two percent drop in hiring over the same period for non-Latino businesses.
- Latino incomes are also rising fast. Latinos were responsible for 29 percent of real income growth in the United States 2005-2015, with the number of Latino households with incomes over $150,000 growing 194 percent.
- The median Latino age is 28 years old, nine years younger than the U.S. population at large and 15 years younger than the median age of the white non-Hispanic U.S. population.
- The share of Latino high school seniors enrolling in college immediately following graduation jumped 20 percentage points in the 12 years from 2000 to 2012 (from 49 percent to 69 percent). Their enrollment in college after high school now outpaces that of white (67 percent) and black (63 percent) high school graduates.
"Clearly the impact that Latino consumers and entrepreneurs are having on the U.S. economy has been severely underestimated and their clout will only grow as they become an increasing driver of America's mainstream economy," said Sol Trujillo, a former Fortune 500 CEO and co-founder of the Latino Donor Collaborative.
As the study shows, Latinos represent the fastest growing ethnic group in the U.S., accounting for 53 percent of U.S. population growth since 2000. The study also indicates that marketers cannot count on reaching Latino consumers solely through Spanish language media, as 99 percent of 5 to 17 year-old Latinos speak English, and 87 percent speak it well or exclusively.
"Each of the socioeconomic factors we looked at in this study represents important change. Taken together they reveal a major seismic shift. If U.S. Latino consumers were a country, they would represent the world's 14th largest economy – ahead of both Spain and Mexico," said the study's author, Dr. Jeffrey Eisenach of NERA Economic Consulting.
To read the complete study, go to http://www.nera.com/publications/archive/2016/making-america-rich-again--the-latino-effect-on-economic-growth.html.
The Royal Bank of Canada (www.rbc.com), operating since 1869, is one of North America's leading diversified financial services companies and provides personal and commercial banking, wealth management, insurance, investor services and capital markets products and services on a global basis. The company employs approximately 80,000 professionals who serve more than 16 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 36 other countries.
RBC Capital Markets is a premier global investment bank providing expertise in banking, finance and capital markets to corporations, institutional investors, asset managers and governments around the world. We serve clients from 70 offices in 15 countries across North America, the UK, Europe and the Asia-Pacific region. Our more than 7,400 professionals deliver the experience and insights required to raise capital, access markets, mitigate risk and acquire or dispose of assets for clients worldwide. We are consistently ranked, by third-party sources, among the 10 largest and most significant investment banks globally.
RBC Capital Markets is part of a leading, diversified provider of financial services, Royal Bank of Canada (RBC). Operating since 1869, RBC is one of the largest banks in the world and the fifth largest in North America, as measured by market capitalization. With a strong capital base and consistent financial performance, RBC is among a small group of highly rated global banks.
The Latino Donor Collaborative (www.latinodonorcollaborative.org), founded in 2010, is a 501(c)(3) non-profit organization dedicated to reshaping the perception of Latinos as part of the American social mainstream. The LDC is self-funded and independent, and created by an accomplished group of Latino national leaders that generously donate their time to promote friendly high-level dialogue, with the goal of finding best ways to grow revenue and market share – by targeting and serving the Latino audiences. We do this through a nonpartisan agenda that includes outreach to influential people in media, advertising, politics, corporate America, and civil society by confronting stereotypes with data that brings understanding and appreciation of the actual roles being played by Latinos in society, politics, and commerce. The LDC board is passionate about empowering every Latino to be the best they can be, and know that by empowering Latinos, they create a rich, united, and more powerful United States of America.
NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges.
SOURCE NERA
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