A new report by the Latino Donor Collaborative and Wells Fargo reveals that the U.S. Latino economy has reached $3.2 trillion in 2021, representing a growth of $400 billion from the previous year. Over the past decade, the Latino economy has grown two and a half times faster than the non-Latino economy, surpassing the GDP of major countries such as the United Kingdom, India, France, and Italy. If the Latino community were an independent country, its GDP would rank fifth in the world. The report highlights that there is untapped potential in the Latino economy, and further investments and engagement are needed.
The strength of the Latino economy lies in industries such as accommodation and food services, construction, administrative support, waste management, and transportation. The growth of the Latino community has had a significant impact in states like California, Texas, and Florida, where it has contributed $682 billion, $465 billion, and $240 billion respectively to their economies. This growth can be attributed to the strong population share, labor force participation, and overall productivity of the Latino community in these states. Overall, 48 out of the 50 states’ economic growth is tied to the Latino cohort, demonstrating their significant contribution to the U.S. economy.
Despite the rapid growth of the Latino economy, a substantial wage gap persists, with Latino workers earning 80 cents for every $1 earned by white non-Hispanic employees. However, Latinos’ wages and salary incomes have grown more than those of non-Latinos over the past decade, at an annualized rate of 4.7% compared to 1.9% for non-Latinos. Additionally, the purchasing power of Latinos in the U.S. reached $3.4 trillion in 2021, growing 2.1 to 2.4 times faster than their non-Latino counterparts. The report concludes that the Latino community will continue to grow throughout the century and encourages early investment and capital flow to harness the potential of this expanding demographic.