Latinx business

Latinos are a Source of Economic Vitality for NJ

New Jersey’s Hispanic-Latino GDP was $97 billion in 2018, larger than the entire economic output of the state of Hawaii. Additionally, the persistence, hard work, increased educational attainment and health longevity of Hispanics are a tremendous source of economic vitality for New Jersey and for the United States. These are just some of the findings in the 2021 State Latino GDP Report produced by the Center for Economic Research & Forecasting at California Lutheran University and the Center for the Study of Latino Health & Culture at UCLA.

The report, which was commissioned by Bank of America, finds that Arizona, California, Florida, Illinois, New Jersey, New Mexico, New York, and Texas collectively contain nearly three-quarters of the nation’s Latino population. Therefore, the report provides detailed analysis of the state-level Latino GDPs for these eight states, benchmarked against the broader U.S. Latino GDP.

New Jersey’s top three 2018 Latino GDP sectors are: Education & Healthcare (17.8% share of the NJ Latino GDP), Professional & Business Services (13.5%), and Transportation & Warehousing (9.0%). As with the US Latino GDP, the largest component of New Jersey’s Latino GDP is personal consumption. Latino consumption totaled more than $73 billion in New Jersey in 2018.

Latinos are making strong and consistent contributions to New Jersey’s population and labor force. In fact, were it not for Latinos, both the population and the labor force of New Jersey would have contracted from 2010 to 2018. During that time, Latinos added an average of 37,500 people per year to the state’s population, while the population of Non-Latinos shrank by an average of 17,500 people per year. During that same time, the number of Latinos in the labor force increased by an average of 18,500 workers per year, while the number of Non-Latinos shrank by an average of 7,500 workers per year.

The economic contribution of Latinos in New Jersey, as with US Latinos broadly, is driven by rapid gains in human capital, strong work ethic, and a positive health profile. In New Jersey, from 2010 to 2018, Latino educational attainment grew at a rate 3.3 times faster than the educational attainment of Non-Latinos.

Over those 9 years, the Latino labor force participation rate was an average of 5.2 percentage points higher than Non-Latinos. In 2018, Latino labor force participation was a full 5.4 percentage points higher. Latinos in New Jersey also boast lower age-adjusted mortality rates across the leading causes of death. New Jersey Latinos’ age-adjusted mortality rate is 37% lower than the state’s White Non-Latinos for cancer and 42% lower for heart disease. New Jersey Latinos enjoy greater longevity, with a life expectancy that is nearly 2 and a half years longer than White Non-Latinos (82.7 years compared to 80.3). The family values, hard work, and strong health profile of Latinos in New Jersey and in the U.S. are a tremendous source of economic vitality.

As a summary statistic for the economic performance of U.S. Latinos, the total economic output (or GDP) of Latinos in the US was $2.6 trillion in 2018. If Latinos living in the US were an independent country, the US Latino GDP would be the eighth largest GDP in the world. The U.S. Latino GDP is larger even than the GDPs of Italy, Brazil or South Korea.

While impressive for its size, the U.S. Latino GDP is most noteworthy for its extraordinary growth. Among the world’s 10 largest GDPs in 2018, the Latino GDP was the single fastest growing. Latino real GDP grew 21% faster than India’s and 30% faster than China’s. Over the entire period from 2010 to 2018, the Latino GDP was the third fastest growing, while the broader US economy ranked fifth. Latino GDP grew a remarkable 74% faster than non-Latino GDP from 2010 to 2018.

As with the broader US Latino cohort, the performance of Latinos in the eight states targeted in this report is extremely impressive. The eight states had a combined 2018 Latino GDP of $2.0 trillion, representing 76% of the U.S. Latino GDP.

If these Latinos were a single state, they would produce the second largest state GDP in the nation. Second only to California.

These eight state Latino GDPs are large even on the world stage. Treated as a single economy, Latinos in these eight states produce greater economic activity than the entire country of South Korea or Brazil. Latinos in these eight states are the equivalent of the world’s 9th largest GDP.

A primary component of the dramatic economic performance of Latinos is personal consumption. From 2010 to 2018, real consumption among US Latinos grew 135% faster than Non-Latino. 2018 aggregate consumption among Latinos in the eight target states is $1.36 trillion. This represents a consumption market that is 30% larger than the entire economic output of the state of Florida. Robust consumption and rapid consumption growth are driven, in turn, by rapid gains in human capital and strong labor force participation.

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