GLOBAL STRATEGY SOLUTIONS FOR MARKET LEADERS

executive summary

Special RepoRt

The U.S. HispanicEconomy in Transition

the U.S. hiSpanic economy in tRanSition | 

Executive Summary

chp 1:POPuLatiON

•HispanicsarenowthelargestethnicminorityintheUnitedStates,numbering45.5million.Teyaccountor15.1percentothepopulation,comparedto12.9percentorAricanAmericansand4.4percentorAsians.•By2050,theCensusprojectsthattheHispanicproportionotheU.S.populationwillsoarto24.44percent,ornearlyoneourthothetotalpopulation.•Between1990and2006,U.S.Hispanicsincreasedby97.8percent–almostvetimesasterthanthenationalgrowthrateo19.8percent.Since2000,thenumberoHispanicshasexpandedby24.4percent,accountingornearlyhalotheincreaseintheUnitedStates’populationorthatperiod.•Tesecondgeneration,withitslowmedianageo12.7yearsanditshighertilityrate,willleadthisshiinthecompositionotheU.S.Hispanicmarket.ProjectionsbythePewHispanicCentershowthatby2020nearlyhal(47.0percent)othegrowthintheU.S.Hispanicpopulationwillcomeromthesecondgenerationandanother27.5percentromthethirdgeneration.Withtheascentothesecondgeneration,immigrantswillaccountoronlyaquarteroallnewU.S.Hispanicsby2020.•Only24percentoU.S.HispanicshavelittleornocommandotheEnglishlanguage.

chp 2:HOuseHOLD

•Hispanichouseholdsaremuchlargerthantheirnon-Hispaniccounterparts.Hispanichouseholdsaverage3.4persons,with1.6othosebeingwageearners.Tetypicalnon-Hispanichouseholdhas2.4persons,owhom1.3arewageearners•Hispanichouseholdsalsocontainmoreyoungpeoplethannon-Hispanichomes.Hispanichouseholdshave1.11childrenunder18,whiletheoverallU.S.averageis0.59childrenperhousehold•TemedianageorHispanicswas27.3in2006,comparedwith36.4ortheoverallU.S.population.WhiletheU.S.medianagecontinuestorise,rom35.3yearsin2000,themedianageoHispanicsremainsthelowestoallgroups.•TerearedistinctdierencesinageamongHispanicsubgroups.Morethan18percentoCubansare65orolder,whileascant4percentoMexicansareinthatagebracket.Ontheotherhand,36.7percentoMexicansand33.6percentoPuertoRicansareyoungerthan18,comparedwithjust23.3percentoCubans.

chp 3:LaBOr FOrce

•Between1980and2006,thetotalU.S.labororceincreasedby41.65percent,or44.6millionworkers.Hispanicscontributed14.5millionworkerstothetotal,accountingornearlyathirdotheincreaseintheU.S.labororceduringthelast26years.•Overthesix-yearperiodbetween2000and2006,Hispanicsaccountedorthegreatestpart(79.2percent)othe25percentoverallgrowthin“constructionandextractionoccupations.”Hispanicsalsorepresentedmorethanoneourth(26.5percent)othe41.85percentgrowthin“management,business,andnancialoperationsoccupations.”Indeed,certainindustrieshavereliedonHispanicstogroworcompetitivelysustaintheiroperations.•AmongU.S.workersinthe20-to24-year-oldgroup,17.96percentareHispanic.Since34.3percentoU.S.Hispanicsareyoungerthan18,thenearuturewillseelargenumbersoyoungHispanicsenteringthelaborpool.•DataindicateastronglinkbetweeneducationalattainmentandHispanicearnings.In2006,medianearningsorHispanicmaleswithbachelor’sdegreesreached$45,917,whilemedianearningsorthosewithonlyhighschooldiplomaswere$30,844.Furthermore,Hispanicmenwithmaster’sdegreeshadmedianearningso$68,167.•TenumberoHispanicsinmanagementandproessionaloccupationshasincreasedovertime.In2000,only6.6percentoHispanicworkerswereinmanagement,business,ornancialoperationsoccupations.By2006,thathadincreasedto7.5percent.

the U.S. hiSpanic economy in tRanSition | 

Executive Summary

chp 4:cONsumer marKets

•Duringthepastdecade,U.S.Hispanicpurchasingpowerhasincreasedatacompoundannualgrowthrate(CAGR)o6.96percent.TatannualgrowthindisposableincomeismorethandoublethetotalU.S.rateo2.8percent.Indollarsamounts,Hispanicbuyingpowerjumpedrom$429billionin1996to$870billionin2008,withtheHispanicshareothetotalUSdisposableincomereaching8.6%•U.S.Hispanicpurchasingpowerwillgrownearly31percentrom$841.37billionin2006to$1.10trillionby2012.•Nearlyonequarterothe$592.2billionthatHispanicsspentonconsumerexpendituresin2006wenttojusttwocategories:oodandvehicles.Hispanicsspent11.8percentonoodin2006and11.4percentonvehiclepurchases.•Hispanicsalsoincreasedtheirmarketshareonew vehiclepurchasesatabriskpace:uprom4.7percentin1994to10.7percentin2006.•U.S.Hispanicshavesubstantiallyincreasedtheiraggregatenancialassets.From2000to2005,the valueoHispan¬ics’nancialassetsexpandedatacompoundannualgrowthrateo4.4percent,wellabovethe0.6percentannualincreaseinvaluereportedorallU.S.households.

chp 5:WeaLtH

•RobustimmigrationandhighertilityratesquadrupledthenumberoU.S.Hispanichouseholdsrom2.7millionin1972to12.03millionby2006.Atthesametime,meanhouseholdincomeamongHispanicsshowedanimpressivegrowthrateo56percentinrealdollars.TemeanincomeoHispanichouseholdsactuallyroserom$32,335in1972to$50,575in2006.•Householdincomereached$38,747,or80percentotheoverallU.S.medianhouseholdincome.HouseholdsoPuertoRicanoriginreportedthelowestmedianamilyincomeamongU.S.Hispanicso$35,899,whilethehighestmedianincomeo$48,037wasreportedorHispanicsoSouthAmericanorigin.HispanicsromCubaalsoreportedtheabove-averagemedianincomeo$41,823.•AmongU.S.Hispanics,61.0percentonetworthwasconcentratedinhomeownership,comparedwith63.0percentorblacksand38.5percentorwhitesin2002.Hispanicsalsotendtoinvestmoreintheirownbusinesses.In2006,themeannetworthorHispanichouseholdsreached$72,862.•TeaggregatenetworthotheU.S.Hispanicpopulationreached$945billionin2006,astunning111.1percentincreaserom1996.woorcesdrovethataccumulationowealth:a58percentincreaseinthenumberoHispanichouseholdsanda34percentriseinaveragenetworth.Fornon-Hispanicwhites,theincreaseinaggregatenetworthwas72.8percentoverthesameperiod.

chp 6:BusiNess aND eNtrePreNeursHiP

•Hispanic-ownedcompaniesareamongtheastest-growingbusinesssegmentsinthenation,andheretoosmallbusinessesdrivegrowth.TenumberoHispanicrmsjumped273percentbetween1987and2002,risingto1.6million,accordingtothelatest2002SurveyoBusinessOwnerspublishedin2006.•ServiceindustriespredominatedamongHispanic-ownedrms.Telargestsingleindustrialsector,asclassiedbytheU.S.Census,was“OtherServices,”accountingor15.8percentoallHispanic-ownedrms.•Notsurprising,HispanicrmsareconcentratedinstateswithlargeHispanicpopulations.Caliorniaishometo27.2percentoallHispaniccompanies,accordingto2002Censusdata.Nextisexaswith20.3percent,whileFloridaranksthird.•Hispanic-ownedcompaniesrepresentanincreasinglyimportantcomponentotheU.S.enterpriseeconomy.HispanelligenceestimatesthatthenumberoHispanic-ownedrmsapproached3millionin2008,withbusinessreceiptso$389billion.