Economy: Growing Clout
The immense buying power of Hispanics continues to energize the U.S. consumer market. This year, Hispanics will control $1.3 trillion in U.S. spending power. More than one person in six who lives in the U.S. is of Hispanic origin; three out of five living here are born here. In Georgia, Hispanics control almost $18 billion in spending, up from $6 billion in 2000 and from only $1 billion in 1990.
In sheer dollar power, the economic clout of this population across the U.S. rose from $210 billion in 1990 to $491 billion in 2000 to $1 trillion in 2010, and it is expected to climb to $1.3 trillion this year and $1.7 trillion in 2019. The 2014 value will exceed the 2000 value by 155 percent – a percentage gain that is far greater than the 71 percent increase in non-Hispanic buying power.
Hispanic buying power will grow faster than African-American buying power (86 percent) and Native American buying power (149 percent), but more slowly than Asian buying power (180 percent). In 2014, Hispanics account for 9.7 percent of U.S. buying power, up from 9.1 percent in 2010, 6.7 percent in 2000 and 5 per-cent in 1990. In Georgia, Hispanics account for 5 percent of total buying power, up from 3 percent in 2000 and only 1 percent in 1990.
Of the myriad forces supporting this substantial and continuing growth, by far the most important is favorable demographics. Because of both a higher birth rate and strong immigration, the Hispanic population is growing much more rapidly than the total population, a trend that is projected to continue. Between 2000 and 2014, the U.S. Hispanic population increased by 56.2 percent compared to 6.9 percent for the non-Hispanic population.
The relative youth of this population, with proportionally more Hispanics either entering the workforce for the first time or moving up on their career ladders, also argues for additional gains in buying power. Hispanics’ spending patterns already help to determine the success or failure of many youth-oriented products and services. That’s because 34.9 percent of the Hispanic population is under age 18, compared to 20.8 percent of the non-Hispanic population. Also, only 5.8 percent of Hispanics are over 65, compared to 15.6 percent of the non-Hispanic population.
Despite the severity of the Great Recession, employment gains can still be cited as one of the key forces supporting this growth in buying power. From January 2000 through April 2014, the number of jobs held by Hispanics increased by 9.6 million jobs, or 61 percent. That cumulative gain is very impressive and exceeds the 56 percent increase in the Hispanic population that occurred over the same time period.
Because of differences in per capita income, wealth, demographics and culture, the spending habits of Hispanics as a group are not the same as those of non-Hispanic consumers. Due to markedly lower average income levels, the average Hispanic household spends in total only about 79 percent as much as the average non-Hispanic household.
Nonetheless, Hispanic households lead spending in a few product categories, such as groceries, telephone services, apparel, footwear, used cars and trucks, and automobile insurance. Also, Hispanics spend a higher proportion of their income (though less money) on dining out, shelter, utilities, gasoline and motor oil. Hispanics spend about the same proportion of their total outlays (though less money) as non-Hispanics on alcoholic beverages, housekeeping supplies, household textiles, floor coverings, furniture, appliances, vehicle maintenance and repairs, public transportation, personal care products and services, and reading materials.
Hispanics spend substantially smaller proportions of total outlays (and substantially less money) on household operations, new cars and trucks, healthcare, entertainment, education, cash contributions and personal insurance and pensions.
The same survey found that Hispanic households are substantially larger than non-Hispanic households (3.3 persons per household versus 2.4 persons for non-Hispanic households) and have more than twice as many children under 18. On average, there are 1.6 vehicles per Hispanic household compared to 1.9 vehicles per non-Hispanic household. Hispanics are much more likely to be renters (55 percent) than non-Hispanics (33 percent) and much less likely to be homeowners.