Latino Population Growth Spurs Economies in Key States

By Alberto Garcia

The birth rate among Latinos is a major factor in economic growth in key states and explains the decline in employment in other states, according to a leading expert.

An article published this week by economist Alan Nevin compares the average number of children in Latino families to those among Asian and non-Hispanic families to help explain current and future impacts on employment and economic growth. The highest birth rates were among non-U.S.-born Latino families.

Nevin explains that the birth rate in the United States is currently 2.0, or roughly the population replacement rate. Combined with immigration, increased birth rates have led the population of the U.S. to grow by about 2.5 million people per year.

“[F]or an industrialized nation to prosper, it is necessary to have two children born for every mom and dad,” Nevin stated. “If that birth rate falters, the economy of the nation cannot grow and prosper on a long-term basis.”

Of the population growth in the U.S., most has occurred in 15 states, including Arizona, California, Florida, and Texas, where Latinos have led in the percentages of births. In slower population growth states, including Ohio, Michigan, and Indiana, Latinos accounted for only single digit percentages of the births.

“The 15 high-growth states are achieving the 2.0 ratio or higher and do so solely because of the growth of the Hispanic and often the Asian population,” Nevin said.

For example, in California, 47 percent of the births were from Latino parents; in Arizona, 42 percent of the births were Latinos; and in Texas, half of all births were from Latinos. Comparatively, Latinos made up only 9 percent of births in Indiana, 7 percent of births in Michigan, and 5 percent in Ohio.

The statistics also show that the average number of births among ethnicities varied. Only 14.8 percent of non-Hispanic woman had three or more children, whereas 19.8 percent of U.S.-born Hispanic women had three or more children, and 39.9 percent of non-U.S.-born Hispanic woman had three or more children.

“Thus, from a pure economic standpoint, the Hispanic population is providing the U.S. with its primary growth and is allowing the 15 high-growth states to account for 75 percent of the nation’s population gains,” Nevin concluded. “And it is no secret that the Hispanic population is the driving force behind the state’s ability to supply its burgeoning labor needs, both skilled and unskilled,” he added.

When comparing the impact of population growth on economic growth, Nevin reviewed the experiences of the U.S. and other industrialized countries, including Japan, Germany, and Russia, each with substantially lower population growth rates than the U.S. Japan, for example, has been experiencing population growth rates of 1.4 children per couple, in addition to its nearly complete ban on immigration. In the past 20 years, Japan has had virtually no job growth, holding steady at 62 million jobs. In comparison, the U.S. market has increased by over 24 million jobs over the same period.

Mr. Nevin concluded that immigration, combined with higher birth rates among immigrants, has been a big factor in the growth of the U.S. economy.

“In 1900, 13.6 percent of the population of our country consisted of the foreign-born. This year, it is 13.5 percent,” Nevin stated. “Not much has changed in that respect over the past 117 years. It is apparent that the foreign born contribute substantially to our economic growth and the diversity of our nation. And that’s a very good thing.”

The report also helps shed light on the reasons behind economic decline in certain states that played a role in last year’s presidential election. Much was made about jobs lost to foreign countries, but, looking at the natural decline in populations in key states, like Ohio and Pennsylvania, other factors seem to be at heart of the decline in jobs in those states.

Mr. Nevin currently serves as Director of Economic and Market Research at Xpera Group, a San Diego-based consulting firm. He holds a Master degree in Statistics and Research from Stanford University, as well as a Bachelor of Arts degree in Marketing and a Master of Business Administration in Real Estate Economics from American University in Washington, D.C.

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