Study Shows Impressive Growth in the U.S. Latino Economy

by | Oct 1, 2023 | Firm News, Immigration Explained

In a recent report unveiled by the Latino Donor Collaborative in collaboration with Wells Fargo, the U.S. Latino economy has shown remarkable growth, surging to $3.2 trillion in 2021. This substantial increase marks a significant rise from the previous year’s figure of $2.8 trillion.

Over the past decade, the U.S. Latino economy has demonstrated an impressive rate of growth, surpassing the non-Latino economy by two and a half times. This surge has propelled the Latino economy beyond the gross domestic product (GDP) of major nations like the United Kingdom, India, France, and Italy. The report, presented by the nonprofit, nonpartisan organization LDC, which focuses on reshaping perceptions of U.S. Latinos through data and economic research, highlights these compelling statistics.

Furthermore, if the Latino community were considered an independent nation, its GDP would rank as the fifth-largest in the world, as revealed by the study.

The study also delves into the specific sectors that contribute to the Latino economy’s strength. Key areas of industry stability include accommodation and food services, construction, administrative support, waste management, and transportation.

Geographically, the growth of the Latino community’s economic impact remains widespread throughout the United States. However, states such as California, Texas, and Florida have played a pivotal role in driving this growth, contributing $682 billion, $465 billion, and $240 billion, respectively, to the U.S. economy. This can be attributed to the substantial population share, labor force participation, and overall productivity of Latinos in these states.

For perspective, California’s Latino economy alone would rank as the 21st largest economy globally, positioning it between Poland and Switzerland according to LDC’s analysis.

Emerging Latino markets, such as South Dakota, North Dakota, and New Hampshire, have also experienced remarkable economic growth. South Dakota, in particular, exhibited an annual growth rate of 11.8% in the economic impact of Latinos in 2021, slightly outpacing its neighboring states.

The report goes on to underscore the growth in wages and salary incomes within the Latino community, totaling $1.67 trillion in 2021. Over the previous decade, Latinos have seen a substantial annualized growth rate of 4.7%, compared to the 1.9% growth rate for non-Latinos. However, despite these gains, a significant wage gap still exists, with the average Latino worker earning 80 cents for every dollar earned by their white non-Hispanic counterparts.

The purchasing power of Latinos in the United States remains robust, reaching $3.4 trillion in 2021. This collective purchasing power has grown between 2.1 and 2.4 times faster than that of non-Latino individuals, according to the report’s findings.