Thank you to ELFA member Michael Baez, VP of Professional Services and Customer Strategy at Leasepath, for providing this article in celebration of National Hispanic Heritage Month, Sept. 15 - Oct. 15, 2024. Visit the ELFA Equity Linked page to share your thoughts on this topic.
Demographics
The Hispanic community is a significant and rapidly growing demographic within the United States. As of 2021, there were approximately 62.5 million Hispanics in the U.S., accounting for roughly 19% of the total population. This is a significant increase from 1980, where Hispanics constituted only 7% of the population. The Hispanic community is quite diverse, with the largest groups being Mexican (37.2 million), Puerto Rican (5.8 million), Salvadoran (2.5 million), Dominican (2.4 million), and Cuban (2.4 million).
Geographically, the Hispanic population is concentrated in several key states. California, Texas, Florida, New York, and Arizona with the major metropolitan centers of Los Angeles, New York, Miami, Houston, Riverside, CA, Dallas-Fort Worth and Chicago having significantly large Hispanic communities.
The Hispanic population at a median age of 30 is also relatively younger compared to the overall U.S. population which has a median age of 38. This more youthful demographic will undoubtedly play a crucial role in the future workforce and economic landscape of the country.
Purchasing Power
The purchasing power of the Hispanic community in the U.S. has seen incredible growth over the last few decades. In 2020, the buying power of Hispanics was estimated at $1.9 trillion, accounting for 11.1% of the total U.S. buying power with a current projected forecast of $2.76 trillion by 2026. This represents a dramatic increase from $213 billion in 1990.
There are several factors contributing to this growing economic influence. The Hispanic community has experienced substantial growth in educational achievement, leading to higher average incomes and greater economic participation and prosperity. Additionally, Hispanics have demonstrated a strong entrepreneurial drive, with many starting and cultivating successful businesses.
Hispanic consumers are also known for brand loyalty and preference for products and services that resonate with cultural values. This has led to a growing focus on the Hispanic community with companies tailoring their marketing efforts to appeal to this demographic.
Business Impact
Hispanic-owned businesses play a vital role within the U.S. economy and span across various industry sectors, including retail trade, healthcare, construction, manufacturing, and professional services. The growth of Hispanic-owned businesses has outpaced the national average, reflecting the community’s economic contributions and entrepreneurial spirit. In 2023, the Hispanic community generated $3.2 trillion in GDP which would equate to being the fifth largest economy in the world.
In summary, the Hispanic community in the U.S. is a dynamic and influential demographic with significant purchasing power and a growing presence in the business landscape. Their contributions are shaping the economic and cultural fabric of the nation, making them a key focus for businesses and policymakers alike.
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