How Latinos Drive America’s Economic Growth

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from TIME Magazine,

Victoria Flores … belongs to the fastest-growing group of small-business owners in the U.S. From 2007 to 2012, Latinos launched small businesses at a pace more than 60 times that of their non-Latino counterparts, according to the Stanford Latino Entrepreneurship Initiative. Latinas like Flores are making their own contributions to that boom: according to the 2016 State of Women-Owned Businesses Report, the number of Latina-owned businesses in the U.S. has grown by 137% over the past nine years–outpacing all other categories of minority women.

One might get a very different impression, however, by listening to the political debate in the U.S. To hear Donald Trump explain it, Latino immigrants are a drag on the economy. “They’re taking our manufacturing jobs. They’re taking our money. They’re killing us,” he said at a rally in 2015. According to a 2016 Pew Research poll, 59% of Americans say immigrants strengthen the country, while 33% say they are a burden. But this diverges along partisan lines, with 78% of Democrats saying they strengthen the nation and just 35% of Republicans agreeing.

The reality is Latinos make up about 17% of the U.S. population and pump an estimated $1.3 trillion into the economy each year. They also represent about 15% of the country’s workforce. (Undocumented immigrants, encompassing all countries of origin, total about 5%.) Far from being a distraction or a drag, Latinos are providing crucial growth in the U.S. economy. This fall, in a $75.8 billion back-to-school market, Latinos planned to spend 16% more per household than the rest of the nation, according to the National Retail Federation. And the numbers are growing: they will likely become 30% of the nation’s population by 2060.

One reason latinos may be more willing than others to gamble on a new business is that so many have already taken considerable risks–whether to get to the U.S. in the first place or just to get ahead. Compared with the risks of crossing a border or merely enduring the hardships that can still result from belonging to a minority group in the country, the uncertainty of starting a business seems almost negligible.

Despite their booming growth, Latino-owned businesses are typically smaller than others. A new Census survey of entrepreneurs found that in 2014, the average Hispanic-owned company had sales of about $1.1 million; white-owned firms averaged about $2.4 million. It’s a gap that Trujillo and other business leaders attribute to a dearth of mentoring available to new Latino business owners.

From 2000 to 2014, Hispanics accounted for about half of the growth in homeownership in the U.S., according to the National Association of Hispanic Real Estate Professionals (NAHREP). In 2014 alone, Hispanics were responsible for 40% of homeownership growth, the largest share among any racial or ethnic group.

Banks have taken note. “We could see the growth happening around us,” says John Stumpf, CEO of Wells Fargo. “It was one of those just obvious things.” To that end, Wells Fargo announced a goal of lending $125 billion to Hispanic home buyers over the next 10 years.

Overall, homeownership rates for Latinos are still lower than those for non-Hispanic whites. There are reasons for that. Latino households have lower median incomes in the U.S. relative to others, and they’re denied home loans at a rate that is 5 percentage points higher than the average, according to Harvard’s Joint Center for Housing Studies. But trends point to improvement: the Urban Institute predicts that Hispanics will account for 52% of new homeowners between 2010 and 2030. While states like California, Texas and Florida still account for the largest numbers of Hispanic homeowners, Gary Acosta, CEO of NAHREP, says markets in Iowa and Wisconsin are experiencing the greatest growth.

a 2015 Nielsen report found that sales in several beauty categories–including cosmetics, hair care, personal-care appliances and shaving needs–declined overall in the U.S. the previous year even as sales increased in Hispanic households.

Which explains in part why Flores at Lux Beauty Club is so busy. “There are so many different types of Latinas. They don’t all look like me,” she says. “There’s Dominican Latinas, there’s Puerto Rican Latinas, there’s dark, light. We’re all different colors and have different hair textures. So we want to be able to buy products that speak to us.”

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