The growth of small business entrepreneurs is helping to drive the latest boost in Hispanic affluence. Experts have cited the proliferation of Hispanic-owned small businesses as not only a huge factor in the burgeoning of the Hispanic affluent class but also as a driving force for overall wealth growth in local communities, where many of these businesses are providing good jobs to community members.
According to the U.S. Hispanic Chamber of Commerce, between 2002 and 2007 the number of Hispanic-owned companies grew by nearly 44 percent to 2.3 million. Currently, this sector has expanded to include about 3 million businesses and represents the fastest-growing segment in the entire small business sector. Simultaneously, Hispanics with household earnings of at least $100,000 have increased 125 percent over the past decade, surpassing the 1.6 million mark in 2010 (from 556,000 in 2000), while Hispanic households earning more than $200,000 grew from 1,531 to 4,104 within the same time frame—an increase of 168 percent.
Interestingly, the rise of Hispanic influence has also affected marketing and consumer trends in recent years. According to a 2012 report released by the Selig Center for Economic Growth at the University of Georgia, the purchasing power (or disposable income) of U.S. Hispanics is currently at over $1.2 trillion, which is larger than that of all but 13 countries in the entire world. This is having a direct impact on how companies are positioning their products in various markets.
So how is the affluent Hispanic class defined these days? According to a survey by marketing firm Costa IMC, at least 50 percent of this demographic has an associate’s degree or higher, is between the ages of 35 and 54, and lives in households slightly larger than the U.S. median of 2.59 members. About 45 percent of the total affluent Hispanic population is centered around five metropolitan areas: Los Angeles, New York, Miami, Houston, and Chicago. Household incomes between $75,000 and $99,999 accounted for an additional 1.3 million.
Ramirez, Rosa. “Hispanic Sector Finding Affluence in Owning Businesses” National Journal: The Next America. 9/10/12.
“Small Business Launches Highest Among Latinos” National Journal: The Next America. 9/11/12 .