The fever pitch in Washington regarding immigration has some business people thinking Hispanics are diminishing in their importance to a strong U.S. economy – they really need to think again.
The Hispanic population in the U.S. numbers approximately 60 million and since 2010 represents nearly 60 percent of American population growth. According to both government and independent sources, the estimated number of illegal migrants contributing to this growth is negative since 2007, thus the Hispanic population growth is due entirely to internal increases – high fertility rates and younger life stages are the primary contributors to this lasting trend. Furthermore, it is now well-known that the bulk of Mexicans in the United States illegally, have resided in the U.S. for many years, building roots and contributing to GDP for decades.
Recently, the Customs and Border Protection has released statistics showing a 40% drop in illegal border crossings at the U.S.-Mexico border, which the Trump administration said was a sign that its hard line on illegal immigration might already be discouraging border crossers. Nevertheless, this downward trend in illegal migration is a continuation of the trend which began during the recession since 2007 and will not affect the dramatic growth in the natural increase of those already in the U.S.
Hispanic consumers also represent the most significant portion of spending growth, due to larger family sizes and younger life stages. In fact, today’s Hispanic households will outspend the average white American households by more than $400 thousand over their lifetimes. This gap will only increase in size and significance as baby boomers age and become increasingly dependent on Medicare and Social Security – both entitlements that are troubled due to our poorly managed public coffers.
For those hopeful that President Trump’s wall will stem the flow of illegal migration from Mexico, a glimpse at flow the chart below reveals the fact that our southern border has seen a diminishing of illegal migrants. Many illegal migrants over-stay their tourist, student or work visas instead of enduring the dangerous and sometimes fatal journey through deserts, mountains and rivers to arrive at the land of opportunity. Data from 2015 shows that the number of Mexican migrants apprehended at U.S. borders reached a 50-year low, according to U.S. Border Patrol. Given the current political climate, the downward trend is expected to continue. And by the way, according to the Department of Homeland Security, Canadians overstaying their visas outnumber Mexicans by a factor of more than two-to-one.
Instead of seeing the Latino community as a drain on economic resources, there are many facts that substantiate their importance to the future viability of our nation. Current manufacturers, farmers and service providers rely on their diligent low-cost labor to keep us productive and competitive. Their relatively young ages (median age 27 vs 44 of Anglos) means their hard work will continue to accrue to the benefit of businesses large and small for many decades to come.
Embracing Hispanics’ strategic value to America and nurturing this vibrant group with education and training will prepare our workforce to compete in the global economy of knowledgeable workers and ultra-skilled human resources. By then we will have learned from our mistake in neglecting the boomer generation by lamenting the loss of low-tech manufacturing, mining and other jobs where we have an over-abundance of population 50 plus suited for yesterday’s opportunities.
Fortune 1000 marketers would do their shareholders well by focusing on gaining the loyalty of Latinos so their enterprises may reap the value of Hispanic consumer spending for their long remaining lifetimes. Downplaying their value as consumers and as productive workers is to lose focus on growing segments that represent dividends and growing share prices to executives and investors.
Hispanics are currently forming businesses at a rate 2.5 times that of businesses overall. Numbering over 4 million in 2016 and yielding $668 billion in annual revenues, these businesses employ millions and have become a key source for American economic vitality. According to US Hispanic Chamber of Commerce president and CEO Javier Palomarez “It’s high time that American legislators realize the pivotal importance of Hispanic businesses; failure to embrace them is equivalent to neglecting a huge voting block and a key part of GDP growth for decades to come.”
Distracting headlines seem to have become the entertainment of this era. This makes it even more critical that serious business people look at real facts and trends, instead of politically-charged hyperbole. Doing so will help lead to sound decisions, smart investments and secure retirement accounts for those in power today and for a greater America tomorrow.