A Sure Bet In Case of a Recession: The U.S. Latino Market
August 24, 2022
Experts cannot all agree on the future of our economy. While GDP is contracting, we also know that unemployment remains low, corporate cash balances are healthy and revenue and profit margins are expanding.
But, as the possibility of a new recession looms, there is a lesson we learned from the 2008-09 Great Recession, and that is that Hispanics helped drive us out of the last big economic downturn, and we can expect a repeat of that today.
The U.S. Latino market is “growing GDP at 8.6%, faster than China, faster than India, and nobody talks about it,” said Sol Trujillo, Chairman of the Latino Donor Collaborative, to a panel of world renowned journalists and economists, as reported by Forbes.
This should be no surprise. Latino Donor Collaborative reports Latinos were responsible for 78% of the net new jobs in the labor force since the Great Recession. Furthermore, Latino household growth was 23.2% in 2010-18, compared to 3.8% for that of non-Latino households.
Well informed marketers know that cultural segments, including Hispanics, the largest segment, are growth drivers for today’s increasingly diverse market. Here are four reasons why.
- The Latino Market is Huge: If U.S. Latinos were a country their 2019 GDP of $2.7 Trillion would make them the 7th largest economy in the world – bigger than Canada, Italy or Brazil. They number 63 million which is 20 percent of the U.S. population.
- Latinos have Money: The single largest component of Latino GDP is Personal Consumption. In 2019, Latino consumption stood at $1.85 trillion, or 68 percent of the U.S. Latino GDP. Latinos in the United States represent a consumption market that is nearly identical in size to the entire economy of the state of Texas.
- Latinos Work: Latino contribution to the U.S. labor force is just as impressive. From 2010 to 2019, Latinos added an average of more than 660,000 workers per year to the U.S. Labor Force. During that same time, Non-Latinos added an average of just over 510,000 workers per year. Over the entire period, the size of the Latino labor force increased by 25 percent while the size of the Non-Latino labor force increased just 3 percent. One factor which drives Latino’s strong contribution to the U.S. labor force is that Latinos have a younger median age than non-Latinos. In 2019, the Median Age for Latinos was 29.8 years. For non-Latinos, it was 40.8 years.
- Latinos are Smart: One of the most important drivers of rapid Latino income growth has been the extraordinary growth of Latino Educational Attainment. From 2010 to 2019, the number of people with a bachelor’s degree or higher grew 2.8 times more rapidly for Latinos than Non-Latinos. The number of educated Latinos rose by 73.1 percent during this time, while the number of educated Non-Latinos rose by only 26.5 percent.
In closing, I invite you to challenge your marketing and advertising teams to create advertising content that reflects nuanced insights for each of your key segments, including the Hispanic market. Thanks to the ANA and its Alliance for Inclusive & Multicultural Marketing, we now have ongoing research that proves that culturally nuanced campaigns increase purchase intent 3times versus advertising not culturally nuanced. And, using those ads in relevant segment media channels adds an additional 10% lift in sales. Clearly, you can make your advertising
work 3 times harder and increase your efficiency. That is one more way to recession proof your valuable marketing dollars.
One final thought. Invest in bringing onboard multicultural experts to guide you. It will put all your
marketing in hyperdrive.
About Roberto Orci
Roberto is a marketing and advertising executive who provides leadership and guidance to take companies to the next level. He can be reached at do************@gm***.com