New Mexico’s Latinos a $36B economic engine

If you’ve lived in New Mexico for any length of time, you already know that Latinos play an outsized role in the state’s economy. But thanks to a national report, we now have a number that bears that out: $36 billion.

That’s the Gross Domestic Product – a measure of economic output, for all you non-economics nerds out there – that New Mexico Latinos produced in 2018, according to a new study authored by a pair of professors from California universities. If taken as a standalone figure, that’s larger than the entire economic output of Vermont, and it’s growing quickly, according to the study.

“It is clear that Latinos, because they are such an important source of vitality and resilience in the economy, they will be drivers of the nation’s post-pandemic recovery,” said Matthew Fienup, executive director of the Center for Economic Research and Forecasting at California Lutheran University and one of the study authors, during a presentation earlier this month.

But while the high-level number gets the headlines, some of the more interesting data from the study is buried under the surface, painting a picture of an economic engine that helped support New Mexico during a challenging decade. And it’s only going to get stronger in the future, according to the study.

“This is an impact that will only grow in size and importance in the years ahead,” Fienup said.

The study, funded by the Bank of America Charitable Foundation, provides state-level analysis of New Mexico and seven other states with substantial Hispanic populations. The study does not differentiate between Hispanics and Latinos.

According to the study, Arizona, California, Florida, Illinois, New Jersey, New Mexico, New York and Texas collectively contain nearly three-quarters of the nation’s Latino population, and more than three-quarters of the lofty $2.6 trillion the study estimates Latinos contributed in economic impact in 2018.

“What we see is Latinos in these eight states together represent the world’s ninth-largest economy,” Fienup said.

More than the totals, Fienup highlighted the GDP growth for Latinos in New Mexico and across the country. Between 2010 and 2018, Latino GDP grew by 76%, faster than any of the 10 largest national GDP totals in the country, Fienup said.

Fienup attributed that to a couple factors, namely the group’s increased educational attainment, which grew far faster than the national average during that period, and its growing presence in the labor force, each of which fueled more demand for goods and services.

“The single biggest driver of the growth of the economic impact of Latinos is rising consumption,” he said.

But what does this mean for New Mexico, which has the nation’s highest percentage of Hispanic residents, according to the 2020 census? In New Mexico, a strong showing from Latino workers helped buoy the state during its so-called “lost decade,” according to the study. Fienup said the state would have lost population if not for Latino residents from 2010 to 2018, as the non-Latino population and workforce declined during that window.

New Mexico has a reputation for having a lot of government jobs, but that’s less true for Latinos than for other populations. David Hayes-Bautista, director of the Center for the Study of Latino Health and Culture at the University of California-Los Angeles, said almost 68% of employed Latinos work in the private sector, compared to about 55% of other demographic groups. In a government-heavy state, Hayes-Bautista said these private sector jobs – concentrated in industries like construction and health care – have fueled wage growth.

“And that creates the economic growth that can then be shared around the society,” Hayes-Bautista said.

Hayes-Bautista also noted an age gap between New Mexico’s older residents, who are majority non-Hispanic white, and its younger cohort, who are disproportionately Latino. As baby boomers continue to age out of the workforce, the workers replacing them will be primarily Latino in New Mexico.

Hayes-Bautista acknowledged that the COVID-19 pandemic had a disproportionate impact on Latinos in New Mexico and elsewhere, with higher mortality rates than the national average. However, he said he was encouraged by what Latinos contributed to their communities, as sums of money sent home to family members in Mexico and Central America, which some expected to drop during the pandemic, rose significantly.

“What we have seen during the 18 months of the pandemic is that Latinos rose to COVID with confidence, with optimism, with resilience,” Hayes-Bautista said.

Stephen Hamway covers economic development, health care and tourism for the Journal. He can be reached at shamway@abqjournal.com.

 

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