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In Houston and across the U.S., Latinos are growing and spending at higher rates than non-Latino residents, a new report found.
The Metro Latino GDP Report found that Latinos living in the Houston metro area contributed $139.5 billion, or 25 percent, to the local economy in 2021, making the Latino GDP, or Gross Domestic Product, as large as the entire economy of the state of Arkansas.
In the Houston metro area, which encompasses The Woodlands and Sugar Land, 2.8 million people, or 38 percent, identify as Latinos out of a population of 7.2 million, according to 2021 U.S. Census data. Houston’s Latino population is the fourth-largest in the nation and the largest in Texas.
One of the principal goals of the report is to buck the common negative misconceptions of the impact of Latinos in the U.S., said David Hayes-Bautista, author of the report and director of the Center for the Study of Latino Health & Culture at the UCLA Geffen School of Medicine.
Mainstream media often portrays this portion of the population only when talking about immigration, crime or strained resources, Hayes-Bautista said, impacting the popular belief and skewing the opportunities given to these residents based on those misconceptions.
“There is another story about Latinos that you don’t hear about, and this is based on data, based on numbers,” Hayes-Bautista said. “And it’s a very different portrait of growth, hard work, strong families, industriousness, patriotism.”
The report was released this week by the Center for Economic Research and Forecasting at California Lutheran University, the Center for the Study of Latino Health and Culture at the University of California, Los Angeles, and Bank of America. The report analyzed Latino-specific data from 2021 on income, labor market, economic activity, among other metrics.
“From 2018 to 2021, Latino GDP grew seven times more rapidly than Non-Latino GDP in the Houston Metro area,” the report states. “During those years, the Houston Metro Latino GDP grew at an average annual (CAGR) rate of 1.94 percent, compared to only 0.27 percent for Non-Latino GDP.”
GDP refers to the total output or contribution to the economy, be it by personal consumption or labor force representation.
Latino consumption has also increased at a faster rate than that of non-Latinos, driven by gains in education attainment and income, according to the report.
Across the Houston Metro area, Latinos spent $92.6 billion in 2021 – a consumption market larger than the entire economy of the state of West Virginia. In the U.S., Latino consumption reached $2.14 trillion.
For this report, experts examined the output by sector. The top three sectors impacted in Houston by Latino contributions are: professional and business services with a contribution of $17 billion; construction with $16.9 billion; and wholesale trade at $15.6 billion.
Latino contributions in some of these sectors outpace that of the general Houston population. In construction, for example, the general Houston Metro population GDP contributes 5.6 percent to the sector, while the Latino GDP accounts for 12 percent.
“In general, the Houston Metro Area’s Latino economy is broad and diversified,” the report states. “As they do for the broader state of Texas and the nation, Latinos provide a broad foundation of support for the Houston Metro Area’s economy.”
The GDP isn’t the only thing growing in this area. Latino population is growing at twice the rate of their non-Latino counterparts, Hayes-Bautista and his co-authors report. While non-Latino populations grew by 16 percent per year between 2010 and 2021, Latinos grew by 36 percent.
In that same timeframe, the Latino population in Texas grew by nearly 30 percent compared to a 13 percent growth for non-Latinos across the state.
The total economic output of Latinos in Texas reached $581 billion in 2021, an amount larger than that of the entire state of Michigan, the report found. The largest component feeding the Latino GDP was personal consumption, which reached $381 billion in 2021.
“As with the broader U.S., the story of the Texas Latino GDP is foremost a story of rapid growth. From 2018 to 2021, the Texas Latino GDP grew 2.7 times more rapidly than Non-Latino GDP,” the report states. “Despite being only 40 percent of the state’s total population, Latinos are responsible for nearly 50 percent of the total growth of Texas GDP.”
This rapid growth can be attributed to the economic mobility achieved through education, Hayes-Bautista said. As more Latinos enroll in higher education or earn certificates that move them up in the workforce, they earn more money for themselves and their families.
“A U.S.- born Latino has a median age of 21, and they have human capital that their parents might not have enjoyed,” he said. “They are U.S. citizens, they are fluently bilingual, about 95 percent here in Houston graduated from high school… and about two-thirds go on to college.”
Despite Latinos being one of the groups hardest hit by the coronavirus pandemic, the total economic output of the Latino population in the U.S. during 2021 was $3.2 trillion, up from $2.8 trillion in 2020, the report states.
If the U.S. Latinos were their own country, its GDP would be the fifth largest in the world, larger than the total economic output of India, the United Kingdom and France.
“Latinos in the U.S. represent a consumption market larger in size than the entire economy of nations like Italy or Canada,” the report states. “From 2010 to 2021, Latino real consumption grew 3.0 times faster than Non-Latino, driven by rapid gains in Latino income.”
The researchers started doing these reports at the national level, then slowly started adding states where there’s a large number of Latinos. That led to Bank of America sponsoring the research at the local level where they were seeing interest in this knowledge, Hayes-Bautista said.
Exploring the Houston metro area and its booming Latino population made for perhaps not surprising, but interesting findings, he said.
“We kind of expected to see what we did, which is Latinos are leading the charge in every single growth compound,” he said.
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