The U.S. Latino economy continues to experience significant growth, with its value reaching $3.2 trillion in 2021, up from $2.8 trillion the previous year, according to a report by the Latino Donor Collaborative in partnership with Wells Fargo.
The report, released by the nonprofit, nonpartisan group LDC, reveals that the U.S. Latino economy has grown two and a half times faster than the non-Latino equivalent over the last decade, surpassing the gross domestic product of major countries like the United Kingdom, India, France, and Italy.
If the U.S. Latino economy were an independent country, it would rank fifth in the world, according to the study.
“We currently have an under-invested, under-engaged massive economy,” said Sol Trujillo, chairman of the Latino Donor Collaborative, in an interview with CNBC’s “Squawk Box.”
The report highlights the strength of the Latino community in industries such as accommodation and food services, construction, administrative support, waste management, and transportation.
The growth of the Latino community has been particularly significant in California, Texas, and Florida, contributing $682 billion, $465 billion, and $240 billion respectively to these states’ economic impact due to their strong population share, labor force participation, and overall productivity.
“If you look at the charts in our study, you’ll see that 48 out of the 50 states’ growth is tied to this Latino cohort,” added Trujillo.
Spectators cheer during Puerto Rican Day Parade in New York. Thousands of people lined both sides of Fifth Avenue for the annual parade, which recognizes the achievements and influence of Puerto Ricans and Latinos in the city.
Eric Thayer | Reuters
According to LDC’s analysis, the California Latino economy alone would rank as the 21st largest economy in the world, positioned between Poland and Switzerland.
In emerging Latino markets like South Dakota, North Dakota, and New Hampshire, there has been a surprising surge in economic growth, with South Dakota experiencing an annualized growth rate of 11.8% in 2021, slightly outpacing its neighboring states.
“Businesses operating in these areas must stay ahead of these substantial changes to ensure they remain relevant,” noted LDC in the report, emphasizing the need for businesses to adapt to the evolving customer base.
The report also highlights the wage and salary growth of Latinos, totaling $1.67 trillion in 2021. Over the past decade, Latino wages and salaries have grown at an annualized rate of 4.7%, outpacing the growth of non-Latinos at 1.9%.
However, despite the rapid growth, a significant wage gap persists in the country, with Latino workers earning an average of 80 cents for every $1 earned by white non-Hispanic employees.
The report reveals that Latinos’ purchasing power in the U.S. reached $3.4 trillion in 2021, growing 2.1 to 2.4 times faster than their non-Latino counterparts.
“In the rest of this century, this cohort is only going to get bigger and bigger,” said Trujillo. “So those who want to get in early, think about it. Think about capital and fund structures that could flow.”
The findings of the report were released alongside the L’Attitude conference, which examines the state of Latino leadership, participation, and representation in corporate America, as well as in the public, media, and entertainment sectors.
The report is based on data from 2021, sourced from the U.S. Census Bureau, the Bureau of Economic Analysis, the Bureau of Labor Statistics, and other reliable sources.
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