In the past 20 years alone, the Latino population in the United States has doubled from $27 million to $54 million, and it is estimated to double again by 2050. The relationship between Latinos and the economy is evident, as the growing numbers of individuals of Latino origin in the United States are quickly becoming a significant part of the consumer market, and thereby a driving force in the US economy.
Latinos and the Economy | The Continuing Rise in English Fluency
One of the fastest growing ethnic minorities in the United States is composed of native Spanish speakers from Latin America and the Caribbean, commonly referred to as Latinos.
The number of native Latino Spanish speakers in the United States (US) has made Spanish the second most spoken language in the country.
But according to more recent reports, half of second generation Latinos in the US are bilingual.
Moreover, English language fluency is largely dependent on when individuals emigrated to the US or whether they were born in the US. Reportedly English proficiency among foreign-born Latinos is 5% versus 42% for second generation Latinos, and 76% for third generation.
The country of origin also appears to play a role in the level of English fluency – Puerto Rican and Mexican immigrant children are reported to have higher English fluency than their Dominican and Salvadorian counterparts. The longer immigrants live in their adopted country, the more likely they are to learn the dominant language.
Bilingualism among the next generations of Latinos in the US is expected to rise, along with the use of Spanglish especially popular among Spanish speaking Latino youth ages 16 to 25.
Language aside, it is common for individuals immigrating to a country to contribute to the overall economy – and the same can be said looking at the relationship between Latinos and the economy, as well as second and third generation individuals.
With political tension concerning immigration high in the current climate of the United States, it is important to look at the direct impacts it has on the country.
Latinos and the Economy | Latino Immigration Helps Drive the Economy of the United States
1. Latinos in the US Drive Auto Sales
According to the Multicultural Report from the Selig Center for Economic Growth at the University of Georgia, since 2013 Latino’s as a group are one of the fastest growing consumer groups in the country.
One marker of this is the growth of sales in the automobile industry.
Latino consumers, analysts predict, will be the auto industry’s leading growth engine for the next couple of decades if current trends continue. According to reports from IHS Automotive’s Polk Market Data, in 2014, Latinos were responsible for growth in auto retail sales in the top three selling cars: 35%, 33%, and 100% for Toyota, Nissan and Honda, respectively.
As a result, the relationship between Latinos and the economy will likely be highlighted through more marketing directed at Latinos, including translations of slogans and branding into Spanish and other dominant languages spoken by Latinos.
2. More Latinos in the US are New Business Owners
The relationship between Latinos and the economy is not only evident in consumer markets, but also in business ownership.
Latino individuals are responsible for opening more new businesses over the past decade than any other group in the United States.
In addition to starting new businesses, their success rate is also higher than that of non-Latino-owned new businesses, as measured by the Kauffman Index (0.46 for Latinos versus 0.29 for non-Latinos).
The number of Latino owned businesses is reportedly growing at three times the rate of the national average.
According to a study by the Stanford Latino Entrepreneurship Initiative, growth rate in new businesses owned by Latinos between the years 2007 and 2012 increased by 47% in contrast to non-Latino owned businesses which conversely declined by 3.6%.
3. Rise in Latino Home Ownership
The Latino population in the US is largely a young population. Moreover, newer generations of Latinos are better educated than their parents, and as a result have higher level jobs and more consumer power.
This is demonstrated by the fact that despite an overall decline in US home ownership, Latinos accounted for more than half of the increase in home sales between 2000 and 2014.
According to the U.S. Census Bureau, Latino home ownership rate rose dramatically over a 12-month period from December 2014 through December of 2015 – the largest one year increase in more than a decade.
In many areas, banks along with other related services have made it a point to target Spanish speakers in the Latino community, providing bilingual, culturally adapted information regarding home ownership and sales.
Currently immigration, both in the United States and globally, is a contentious topic; however, one must take into consideration the economic benefits (among others) it brings. The proof can be seen in the statistics surrounding the relationship between Latinos and the economy.
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