U.S. Hispanics Expected to Have Increasing Economic Impact
May 9, 2012
By Elvina Nawaguna
Blanca Pagan works in banking. Sarah Corona owns a Cuban restaurant, and her husband, Jesus Corona, owns a construction company.
Pagan came from Puerto Rico with her boyfriend in 1995 to find a better life before they could start a family. The Coronas came from Cuba.
Today, they have families and are preparing their children for productive lives here.
This is the future of America.
The rapidly growing Hispanic population has become, and is expected to be, an even greater force in the U.S. economy.
In response to the growth of Hispanic population, retailers in recent years have started catering to Hispanics, said Jim Farrell, assistant professor of finance and economics at Florida Southern College’s Barney Barnett School of Business and Free Enterprise.
Many are including aisles with Hispanic foods, targeting that market in advertising, and using more Latino actors and actresses in commercials.
Because Hispanic households tend to be larger, their shopping budgets tend to be bigger.
Sarah and Jesus Corona’s household consists of their two sons, 11 and 13, and both mothers-in-law. The family spends $350 per week on groceries.
‘You know it’s a family of six. We’re a typical Cuban family. We eat. We cook,’ said Sarah Corona, who owns Kongas Latin Cafe on South Florida Avenue.
Last year, U.S. Hispanic purchasing power reached $1.1 trillion, according to estimations from the Selig Center for Economic Growth at the University of Georgia. That power is projected to exceed $1.5 trillion by 2015, the equivalent to a stand-alone economy with more buying power than Indonesia, Australia and the Netherlands and of all but 14 countries worldwide.
That is going to be even more important in states with large Latino populations such as Florida, Texas, New Mexico and California, said Philip Williams, director of the Center for Latin American Studies at the University of Florida. Hispanics make up 22.5 percent of Florida’s population and 17.69 percent of Polk County’s population.
About 50 million people — 16.3 percent of the U.S. population — are Hispanics. The Hispanic population is expected to grow by 167 percent from 2010 to 2050, compared with 42 percent for the overall U.S. population. White non-Hispanics are expected to grow by only 1 percent, blacks by 56 percent and Asians by 142 percent during the same period.
The census identifies people as Hispanic if they originate from Mexico, Cuba, Puerto Rico or other South or Central American or Spanish countries, regardless of race.
Businesses, Williams said, need to be aware of the unique spending patterns of Hispanics, such as the tendency to show much more brand loyalty.
‘From a business perspective, you want to cultivate that brand loyalty earlier on,’ he said. ‘Any time people are spending money and increasing their purchasing power, that’s good for the U.S. economy.’
Besides retailers, the growing Hispanic population means big business for food, education, real estate, financial services, transportation, entertainment and media industries, according to IBISWorld, an independent source of industry and market research, Pagan, who works as the Hispanic community relations coordinator at Lakeland-based MidFlorida Credit Union, manages a team of people assisting Spanish-speaking customers by phone.
Hispanic consumers, she said, feel more welcome at businesses where someone is able to speak even just a few words in Spanish.
‘They really appreciate for you to try, even if you can’t have a full conversation,’ she said. ‘If you have one of the family members and they trust you, you’re going to get everybody else because they are very loyal.’
Most Hispanics are younger, with 60 percent in the U.S. younger than 35. The median age of the U.S. Hispanic population is 28 years, compared with the overall median age of 37 years.
‘What that means is that there is a great potential down the road that many of these Hispanics are going to become homeowners,’ Williams said. ‘As these younger consumers mature and achieve job stability, they’re going to be prime targets for the real estate industry.’
There also has been a 43.7 percent increase in Hispanic-owned businesses between 2002 and 2007 to 2.3 million businesses, more than twice the national rate of an 18 percent increase in the same period, according to census data. Hispanic-owned businesses constitute 22.4 percent of all businesses in Florida.
‘We’re a force to reckon with,’ said Ana Rivera, president and founder of the Puerto Rican/Hispanic Chamber of Commerce of Polk County. ‘We’re influencing commerce, tourism, even as far as politics.’
Hispanic business owners, she said, are not only reaching out to fellow Hispanics, but are excelling in catering to non-Hispanics.
‘As business owners, we want to sell to everyone,’ Rivera said. ‘We open the business to be in business.’
Many immigrants from Mexico and Central America come from very poor backgrounds and at 10.3 percent, still have higher unemployment levels than the national rate of 8.1 percent.
But immigrants historically have shown a stronger desire to succeed, Williams said.
‘One of the things that is common among all immigrant groups is that when they come to the U.S., they see it as an opportunity and they try to make the best of it, and so they have a very strong work ethic,’ Williams said. ‘They also put a strong emphasis on education as a way for their children to do even better.’
Both Pagan and the Coronas see their children’s educations as keys to a successful life here and emphasize the need to be bilingual.
By 2050, the census projects, nearly a quarter of the U.S. population will be Hispanics. Business owners, according to Farrell, will continue to adapt and hire the Hispanic community in proportion to the growing population.
‘I think we rely heavily on immigration to keep our economy growing and the Hispanic community will play a major role in that,’ he said.
Source: THE LEDGER