♪ Hey, hey (upbeat music) ♪ Hey ♪ Hey, hey ♪ Hey ♪ Hey, hey - Good evening and welcome to "Horizonte," a show that takes a look at current issues through an Hispanic lens.

I'm your host Catherine Anaya.

Tonight, we talk about the power of the Hispanic market.

A new report funded by Bank of America shows the gross domestic product of Hispanics in the Phoenix metro area is over $65 billion.

That's higher than the GDP of two states, Maine and North Dakota.

We will talk more about that report.

But first, Cronkite news reporters, Valeria Rodriguez and Maria Staubs spoke with some Phoenix Latino business owners about the success of their businesses.

- Weren't scheduled to launch our 75th Avenue store until closer to March.

We kind of moved everything up 30 days up so that we could be open for the Super Bowl.

In the beginning, it picked up probably about twice as much as what we were doing prior to it.

But then it kind of leveled out, and we ended up on about 75, 80% over the previous year.

So it has been quite a hike.

(speaking in foreign language) - So you're pretty much gonna find anything that you ever want, anything from edibles to vapes, e-pens, regular flour, of course.

And then as everybody's learning how to use the new concentrates and all that, it's kind of leading to that a little bit.

But you're gonna find about any which way you could imagine anywhere from regular flour, all the way to, we actually have suppositories now.

So imagine that.

We have a special, it's two pizzas and set, and an order wings for $49.99.

(speaking in foreign language) - Joining me now to discuss Hispanic GDP in the Phoenix metro area is Matthew Fienap, one of the co-authors of the report, and the executive director of the Center for Economic Research and Forecasting at California Lutheran University.

Doctor, thank you so much for joining me.

I certainly appreciate it.

- Catherine, thanks so much for having me.

It's great to be here.

- Well, I'm excited to talk about the profound results of this report.

But real quickly, just let us know, you know, how this plays into a larger US study.

- Yeah, so this is a pretty ambitious project that's five years old now.

So for five years in a row, we've produced annual Latino GDP reports.

So we're trying to estimate the direct economic contribution of Latinos living in the United States.

And this, the Phoenix metro data that we're gonna talk about today is indexed to our 2018 data.

And the 2018 US Latino GDP was $2.6 trillion.

To give you a sense how big that is, if Latinos living in the United States in 2018 were in their own country, it would've been the eighth largest GDP in the world, you know, larger than entire countries like Italy.

And actually, in 2020, which is the most recent data that we have, the performance of Latinos during the pandemic really holding up the US economy - Yes.

- was so dramatic that they actually jumped three spots.

The Latino GDP in 2020 was 2.8 trillion.

And again, the tremendous resilience of Latinos holding up the US economy in 2020 during the pandemic allowed them to jump over India, jump over France, jump over the UK to become the fifth largest GDP in the world.

And so that's to say Latinos are drivers of economic growth in the United States, and they're just a tremendous source of resilience that benefits all Americans.

- It is exciting and it is monumental.

And I want to mention that your research team studied the GDP for Arizona last year, but this year you take a deeper study into the Phoenix, Mesa, Scottsdale region.

What areas specifically did you focus on for your research?

- Well, so again, so we're trying to make a calculation of the total economic contribution of Latinos in the entire Phoenix, Mesa, Scottsdale metro area.

And so, just that number's unbelievable.

So $65.1 billion of economic activity.

Latinos living in the Phoenix metro area represent a consumption market of over $44 billion.

That's larger than the entire economy of the state of Wyoming.

And they're making, Latinos are making contributions in all industry sectors, right?

They're actually, the Latino segment of the Phoenix metro economy is more diverse than the broader economy.

And so they're providing a broad foundation of support, that the five biggest sectors among the Latino GDP are finance and real estate.

Latinos are responsible for almost $13 billion of activity in finance and real estate.

Those are followed by professional and business services, construction, education, and healthcare, and government services.

- So can you break down the Latino population growth and what the report says about that striking contribution that Latinos are making into the labor force?

It's phenomenal.

- Yeah.

Yeah.

So actually, you know, so one of the important questions why GDP, why are we using this as the summary statistic?

And the population data will play into this.

You know, the reason we're calculating Latino GDP is because first of all, GDP is a broad measure of economic activity but it's also a universal summary statistic.

This is how we compare the size of economies of whether it's states or countries.

And GDP growth is one of the the single most important summary statistics, 'cause GDP growth produces things like rising wages, higher standards of living, greater economic mobility.

And so Latinos are drivers of that growth.

Now, the story of growing Latino GDP is actually a story of human capital accumulation of Latinos bettering themselves, bettering their families.

And in doing so, being drivers of growth.

And some of the ways they're doing that is educational attainment growth is much more rapid.

Latino labor force, they're adding workers at a large multiple of non-Latinos.

And we really see this in population data.

So I like to talk about the Latino economic premium, right?

There's a number of premiums where Latinos outperform non-Latinos across the economy.

Population and labor force are big ones.

So in the Latino metro area from 2010 to 2018, Latino population growth was double that of non-Latinos in the Phoenix metro.

The labor force, their contribution to the Phoenix metro labor force is even more dramatic.

From 2010 to 2018, Latinos added four times as many workers as non-Latinos to the Phoenix metro.

And really, that highlights just how important they are to the growth and the prosperity that we see across the Phoenix metro and Arizona broadly.

- Absolutely, powerful and substantial.

When you talk about that impressive growth of the Latino labor force, can you share some of the insights presented in that report about, you know, the jobs that they're taking on, the age, which I know - Yeah.

- is younger than I think most people might think.

- Yeah.

- And the work ethic - That's right.

- which we know - Oh, yeah.

- has always been strong.

- Oh, yeah.

Yeah.

So let's start with age, and then we'll talk about some of those other issues.

So Latinos are younger on average than non-Latinos.

In fact, across the US, the average age of Latinos in 2018 was 29.5.

It was over 40, nearly 41 for non-Latinos.

And so that means not only are Latinos adding to the population, they're adding to the critical demographic group of working age adults, right?

The United States and the Phoenix metro are really struggling with a dangerous labor shortage, right?

There aren't enough workers, and Latinos are contributing dramatically.

So about a million Latinos a year are coming of age and entering the labor force.

In fact, they're projected to add 60 million additional workers in the next several decades.

And again, so their youthfulness is an incredible gift to metro areas like Phoenix.

The other thing you need to realize about their, it's not just that they're younger.

When we talk about this cohort that's entering the labor force, they are overwhelmingly the children and grandchildren of immigrants.

And so this is an explosive growth cohort.

Latinos coming of age and entering the labor force are, because they're second and third generation Americans, first of all, they're combining the extraordinary and selfless work ethic of their elders with rapid gains in educational attainment, right?

And then combining that with Latino work ethic, working more hours, right?

Working harder, this is really what's propelling, not just Latino GDP growth in the Phoenix metro, it's propelling Phoenix metro GDP growth, it's propelling Arizona GDP growth.

And very certainly US GDP growth as well.

- We take great pride in that, that's for sure.

And this is then, would you say translating into the kind of home ownership you're seeing?

- Yeah, so again, one of the really striking Latino economic premiums is in household formation and home ownership.

So they're more likely to form households than non-Latinos.

In fact, Latino household formation in the Phoenix metro area from 2010 to 2018 was three times the rate of non-Latinos.

And that, you combine household formation with rapid educational attainment, gains in income, and you, of course, see dramatic growth in home ownership.

And so Latino, members of the community in the Phoenix metro area, their home ownership grew at 2.5 times the rate of non-Latinos - Incredible.

- in the three most recent years for we have data.

It is incredible.

- Well, we only have about a minute left, and I do wanna know just what the response is that you received from the business leaders that you talked to - Yeah.

- when you presented the results of this report in Phoenix not too long ago.

- Yeah, so first of all, obviously, the business leaders see this every single day.

They understand what the drivers of growth are largely.

And so there's been a very, very warm reception.

One of the responses that we always hear is has to do with, well, it's obvious then that this is a tremendous investment opportunity, right?

For communities like the Phoenix metro.

If you consider that, you know, Latino home ownership, for example, is growing more rapidly even though they have less access to consumer capital than non-Latinos, they're starting businesses at higher rates even though they have less access to commercial capital.

Amazingly, they have significantly better health outcomes, longer life expectancy, even though they have less access to healthcare than non-Latinos.

And it means that this incredible, this incredible driver of growth could be even greater, right, if we close some of those other gaps, right?

So this is an investment opportunity for communities who can enjoy even greater growth and even greater prosperity by recognizing this and then investing in Latinos and, you know, education, Latinos entering the workforce, Latino new businesses.

And so, really, the sky is the limit for communities when they recognize this.

- Yep, we've been saying it for a long time and your research certainly supports that.

So the future looks bright, Dr. Fienup.

Thank you so much.

- It does.

It's very bright.

Yeah, thanks for letting me be here.

- It's good to talk to you.

Yeah, you bet.

- All right.

- Take care.

Appreciate it so much.

And that's our show for tonight.

For "Horizonte" and Arizona PBS, I'm Catherine Anaya.

Thank you so much for joining us.

Have a great night.

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