How Latinos Power the American Economy

The 2016 presidential race focuses on immigration as candidates and the media miss a much bigger story.
Sunday, March 13, 2016

We are business leaders and we are here to tell you a surprising truth: Latinos are big drivers of economic growth. Unless you run a retail business, you probably have no idea what we mean. Few on the campaign trail or in the media ever talk about Latinos and economic growth. The candidates and reporters have a hard time getting past immigration.

Voters are making choices about the nation’s future without knowing the real story about Latinos in America, and those decisions will have consequences for the country’s future. The national conversation needs to be informed by the facts.

First, Latinos’ purchasing power has been growing 70% faster than Americans’ as a whole since the late 1980s, according to the 2013 Multicultural Report from the Selig Center for Economic Growth at the University of Georgia. That dry statistic is showing up everywhere in the real world. One example: Latinos drove between 33% ( Nissan) and 100% (Honda) of auto makers’ combined retail sales growth in the U.S. in 2014, reports IHS Automotive’s Polk Market data unit. Leaders of U.S. consumer-products companies know this and have geared their growth strategies around Latino consumers.

Second, Latinos are driving net new-business formation in the U.S. According to a study by the Stanford Latino Entrepreneurship Initiative, from 2007-12 Latino-owned net new-business formation skyrocketed 47% while non-Latino net new businesses declined by 2%. New businesses mean new jobs.

Third, Latinos in the U.S. are much younger than Americans as a whole, and young Latinos in America are better educated and earn more than ever. That means Latino household-formation is rising too. From 2000-14, Latinos accounted for more than half of the increase in household ownership in the U.S. That also means that America will not suffer a European-style demographic crisis as baby boomers retire. Young Latinos are stepping into the workplace and paying the taxes that will keep the nation’s fiscal house in order.

Knowing the truth of Latinos driving U.S. economic growth, we have watched this presidential campaign unfold at first with disappointment, then with concern and now with real alarm. The authors here are a Republican and a Democrat, a former Clinton administration cabinet secretary and the first native-born Latino CEO of a Fortune 150 firm. We are working with a wide range of concerned Latino leaders from all sectors and political perspectives, business people and former senior government officials from both parties, including Linda Alvarado, Aida Alvarez, Mike Fernandez, Federico Pena, Bill Richardson and Ken Salazar. Before all else, though, we are Americans.

As Americans and as businesspeople, we believe that the country should be doing everything it can to support economic growth, jobs and wages. Growth in the past quarter was 0.7%, and that is not enough. Voters seem to agree. They are anxious about their jobs and incomes.

Instead of looking to the Latino community as a pillar of national economy, however, one of the main issues of this campaign has been immigration and the fear that immigrants are taking U.S. jobs. What is going on?

It turns out that many Americans tend to hold strong but mistaken impressions of our community. This is the conclusion of an independent survey conducted in January for the Latino Donor Collaborative, a group we have founded to make sure Americans understand the full contributions of the Latino population. The survey showed that most non-Hispanic, white Americans with moderate views of the Latino community do not believe that Latinos share their American values. The survey also uncovered that many Americans believe that nearly half of us are undocumented immigrants, when in fact only 16% are, according to the 2014 Hispanic Trends report by the Pew Research Center.

The Pew report also made clear that Latinos in this country are just as likely as non-Latinos to say “the U.S. is the best country in the world” and are more likely to believe “most people can get ahead if they are willing to work hard.” American values are Latino values.

Many also believe that immigrants increase the crime rate and sponge off the welfare system. That would be disturbing if true—but it isn’t. According to government statistics, immigrants correspond to lower crime rates, and every million new immigrants will pay $500 billion more into the Social Security Trust Fund over 25 years than they will take out.

Immigration is a gut issue. If you hold these mistaken impressions close, and if you cannot see how you are going to make your rent or mortgage payment next month, those fears make a lot of sense. But as Americans, we all want the kind of economic growth and prosperity that help us find good jobs and support our families. Latinos are creating those jobs by starting new businesses, buying new houses and replacing the family car.

If the virtues of economic growth are not convincing enough, consider this: Latino voting strength in every swing state—Nevada, North Carolina, Virginia, Florida, Colorado and others—has grown since 2008. Candidates will win Latino votes when they talk about us not as the comic-book characters some imagine us to be, but as fellow Americans who are vital contributors to the nation’s prosperity.

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