December 6, 2016

IMPORTING THE SUPERIOR CULTURE:

How Latinos are driving income growth in America (Melody Hahm, 12/06/16, Yahoo Finance)

As an economist, Eisenach says he occasionally sees a piece of data that may be interesting or exciting but doesn't fit with a larger phenomenon and doesn't tell a full story. This data on Latinos, however, sheds light on the potential of people behind a big demographic shift in the US. In the case of Latinos, be they entrepreneurs, consumers, marketers or wealth managers, there is a rich road of opportunity ahead. He says the data speaks for itself.

"The data surrounding Latinos' economic implications pull together a story that's compelling, pervasive and deep. Especially because the average Latino is nine years younger than the overall population, we know that this demographic will be with us for a while, and we can take advantage of that," he says.

In addition to holding a Ph.D. in economics, Eisenach has been an outspoken advocate for less regulation, and has been a consultant who worked for Verizon (VZ) and other companies in the telecommunications space to push back against the Federal Communications Commission (FCC). He's co-leading Trump's telecommunications policy team, which means he's responsible for hiring the new staff members of the FCC.

He says he decided to pursue this report through the lens of economics, not politics.  "The study is completely separate from my relationship with Trump," he says. "I embarked on this as an economist."

Eisenach says he was surprised by much of the data. For example, Latinos are creating new businesses and increasing headcount at a faster pace than the overall population. Hispanics have had the highest entrepreneurship rate of any ethnic group each year since 2002. Latinos accounted for more than one out of five new entrepreneurs, up from 10% in 1996. Of course, many of these businesses remain small -- there are over 4 million Latino-owned business in the US, but only 2% of them earn over $1 million in annual revenue, according to data compiled by the Hispanic Chamber of Commerce.

And, despite the threat of wage stagnation over the past several years, Eisenach says Latinos are responsible for 29% of real income growth in the US between 2005 and 2015, with the number of Latino households with incomes over $150,000 growing 194% over the same period. Though the median income among Latino households is below the country's average, the growth is rapid, and signals significant momentum for the Latino population.

In fact, over the last decade (between 2005 to 2015), Hispanics -- who account for just 18% of the population -- accounted for 29% of the growth in real aggregate income. Bureau of Labor Statistics data show that median weekly earnings of full-time wage and salary workers rose nearly 11% for Hispanics between the first quarter of 2000 and the first quarter 2016, more than triple the increase for the population overall.

Posted by at December 6, 2016 5:57 PM

  

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