Did you know that if Latinos in the United States were a country it is estimated to have a $2.8 Trillion GDP – making them one of the largest economies in the world? Depending on annual fluctuations, this figure would collectively put American Latinos on par with countries like France and the U.K.
And the incredible thing is that we’re growing every year. In fact, Latinos make up the youngest largest ethnic group in the U.S. ensuring that our total economic output and our total spending power will continue to grow.
From everyday household purchases to big-ticket items like cars and homes, the Latino community’s financial influence is reshaping the American consumer market – but sometimes, we wouldn’t even know it.
Still, we’re not even close to meeting our full potential. Despite our massive economic output, many Latinos struggle with financial literacy.
My goal is to explore the growing economic strength of Latino families, highlighting the ways their consumer habits shape businesses, communities, and the entire U.S. (and global) economy – and how we can better prepare ourselves to support our families, communities and nation.
So, as I get started here on Smart Latino Money, my aim is to discuss issues important to Latino Americans. I will encourage and join the growing chorus of beautiful voices to help shape our communities. I truly believe that a strong Latino-American community is a strong American community.
Latino Economic Power: Local, National, and Global BenefitsLatino Buying Power
Latinos are like other Americans. We buy what we need, we buy what we want, and we impact local, state, and national economies.
And it’s no small chump change, either! In fact, every year, Latinos buy about $1.5 trillion in goods and services, according to recent reports (Selig Center for Economic Growth):
When you consider that total U.S. Consumer Spending is often cited around $14–$15 trillion annually (though this figure changes with economic conditions), that means Latinos account for about 10% of total U.S. consumer spending.
Those are large numbers!
Why is this important? Well, in practical terms:
Latino buying power has been growing faster than many other demographics, meaning this share is likely to increase.
When mainstream businesses tailor their products and services to Latino preferences, including bilingual services and culturally relevant marketing—they tap into a rapidly growing consumer base and can increase overall sales and profitability.
Small Business Growth With a High Rate of Entrepreneurship
Check this out: Latinos start new businesses at a faster rate than many other demographic groups, fueling job creation and stimulating local economies.
Latino entrepreneurs have been founding businesses at a rate faster than the U.S. average, sometimes quoted as 2–3 times higher than non-Latino entrepreneurs, depending on the study year.
We are a boost of energy to the American economy. And yet, we’re often demonized by politicians and pundits in the media – for siphoning precious resources. When, in fact, we Latinos are the precious resource – que no?
Between 2007 and 2019, Latino-owned businesses grew by 34% compared to just 1% growth for all other businesses.
— Source: Stanford Latino Entrepreneurship Initiative
Instead of politicians and pundits demonizing, why not feed this powerful American economic engine? By providing financial education and access to capital for Latino entrepreneurs, we can create thriving businesses that employ more workers and contribute to tax revenues. (Stanford Latino Entrepreneurship Initiative, 2021).)
According to the Stanford Latino Entrepreneurship Initiative’s ‘State of Latino Entrepreneurship’ report, Latino-owned businesses have increased by 34% between 2007 and 2019—significantly outpacing the 1% growth of all other businesses in the United States during the same period. This surge in entrepreneurship highlights the growing economic impact of Latino communities, fueling job creation, innovation, and overall economic growth.
In fact, Latino American entrepreneurship outpaces the U.S. business growth rate at about 3:1.
This is despite not much support from mainstream businesses!
Engaging with and supporting Latino financial habits pays dividends on multiple levels: it empowers individual families, fuels small business innovation, and generates broader economic growth. Recognizing and meeting the financial needs of Latino communities, businesses, policymakers, and educational institutions can help create a robust, inclusive economy that benefits everyone. That’s the reason I’m here. I want to discuss and promote smart money moves for Latino families, young people starting their careers, Latino entrepreneurs, and older Latino Americans who need more discussions on what to do with their retirement money.
Citation
- Latino Donor Collaborative, The Latino GDP Report: Quantifying the Impact of American Latinos on the U.S. Economy (California Lutheran University, 2021), [URL if available].
- Jeffrey M. Humphreys, The Multicultural Economy (Selig Center for Economic Growth, University of Georgia, 2020), [URL if available].
