The U.S. Latino economy continues to grow, reaching $3.2 trillion in 2021, up from $2.8 trillion the previous year, according to a new report from the Latino Donor Collaborative in partnership with Wells Fargo.
Over the past decade, the U.S. Latino economy has grown two and a half times faster than its non-Latino equivalent, outpacing the gross domestic product of the United Kingdom, India, France and Italy, according to the report released by LDC, a nonprofit, nonpartisan group focused on reshaping Latinos’ perceptions of the country through data and economic research.
If Latinos were an independent country, their GDP would rank fifth in the world, according to the study. “We have a massive economy that is underinvested right now, underinvolved,” Sol Trujillo, president of the Latino Donor Collaborative, told CNBC in an interview.
Industry strength for Latinos remains steady in accommodation and food services, construction, administrative support, waste management and transportation.
While Latino community growth remains widespread in the U.S. geographically, the community drove particular growth in the states of California, Texas and Florida, with an economic impact of $682 billion, $465 billion and $240 billion, respectively.
This is largely due to the strong Latino population share, labor force participation and overall productivity in those states.
Foto: Bloomberg
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Rapid Latino Growth
According to LDC‘s analysis, California’s Latino economy alone would rank 21st among the world’s largest, between Poland and Switzerland. In Latino emerging markets, South Dakota, North Dakota and New Hampshire have experienced an astonishing rise, with the highest GDP growth rates since 2011.
“Companies operating in these areas must stay ahead of these substantial changes to ensure they remain relevant. And be able to meet the needs of their evolving customer base,” LDC noted in the report.
The report also found that wages and salary income, totaling $1.67 trillion in 2021, grew more than that of non-Latinos over the previous decade at an annualized rate of 4.7%, compared to 1.9% for non-Latinos.
But despite the rapid growth, a substantial wage gap persists in the country, with the average Latino worker earning 80 cents for every dollar earned by non-Hispanic white employees.
On the other hand, the collective purchasing power of U.S. Latinos grew between 2.1 and 2.4 times faster than that of their non-Latino counterparts, according to the report.
The report is based on data from 2021, the most recent year for which public information is available, and includes data from the U.S. Census Bureau, the Bureau of Economic Analysis and the Bureau of Labor Statistics, among others.