Economic uncertainty and our unsettled politics lead the news today, but the most consequential business story is the one not told. It is the good news story of a group of Americans – Latinos – who have been quietly and increasingly powering U.S. economic growth, both as job creators and as consumers. As the U.S. population ages, and as we struggle against the headwinds of an anemic global economy, U.S. Latinos are forming the core of America’s New Mainstream Economy. A handful of simple facts tell the story.
First, U.S. Latino buying power is huge, and rising fast. We already enjoy $1.5 trillion in annual purchasing power. That number has been growing much more quickly than the purchasing power of the general U.S. population – 70 percent more quickly over the last 25 years.
I see the effects throughout the economy. According to a National Association of Hispanic Real Estate Professionals report, Latinos accounted for half of the increase in owner households in the United States from 2000-2014. IHS Automotive reports that Latinos drove between 33 percent (Nissan) and 100 percent (Honda) of automakers’ retail sales growth in 2014. Colleagues in the C-suites of America’s largest retail companies all tell me the same story – Latinos are driving sales growth.
Second, U.S. Latinos are driving net new business formation, and new businesses mean new jobs. According to a Stanford Latino Entrepreneurship Initiative study, between 2007 and 2012 Latino-owned new business formation skyrocketed 47 percent while non-Latino net new businesses declined by two percent. Latinos account for one out of every five new entrepreneurs in the United States and Latino-owned businesses have grown at double the growth rate of all firms.