Steady growth and a growing workforce: The keys behind the exceptional GDP numbers of latinos in the U.S.

The Hispanic community has long been a key driver of the U.S. economy. According to the Annual Latino GDP Report, prepared by UCLA’s Center for the Study of Latino Health and Culture and Cal Lutheran’s Center for Economic Research and Forecasting, Latino gross domestic product (GDP) reached a record $4.1 trillion.

That level ranks it as the fifth-largest economy in the world, ahead of countries such as Canada, the United Kingdom, France and India. Moreover, between 2019 and 2023, it was the only GDP within the top 10 global GDPs that grew faster than China, even doubling the growth rate of the U.S. economy as a whole. According to the report:

As a summary statistic of U.S. Latino economic performance, U.S. Latino GDP in 2023 is extraordinary. The total economic output (or GDP) of Latinos living in the United States in 2023 is $4.1 trillion, up from $2.8 trillion in 2019 and $1.6 trillion in 2010. If Latinos living in the U.S. were an independent country, Latino GDP in the U.S. would be the fifth largest in the world. For the fourth consecutive year, U.S. Latino GDP is larger than the GDP of India, the United Kingdom or France. Outside the United States, only Germany, Japan and China have higher GDP.

Steady growth and increased labor force

Latino GDP progress has been remarkable: rising from $1.6 trillion in 2010 to $2.8 trillion in 2019 and surpassing $4 trillion in 2023.

Dr. David Hayes-Bautista, director of the UCLA center, explained that the key is labor force participation: "Since 2011, this rate has been four percentage points higher than that of non-Latinos, but in 2023 it reached 6.7 points." This indicates that Latinos are more likely to be working or actively seeking work than the rest of the population.

The report also indicates that between 2010 and 2023, Hispanics added an average of 726,000 workers per year to the labor force, accounting for nearly 59% of total workforce growth in the United States.

Education, income and consumption on the rise

Education has been another decisive factor. Between 2010 and 2023, the number of Latino college graduates grew 125.3%, three times faster than among non-Latinos.

This has driven real wage growth of 61.5%, compared to 21.4% for the rest of the population. As a result, Latino consumption reached $2.7 trillion in 2023, exceeding the purchasing power of Texas ($2.58 trillion) and 25% higher than that of New York ($2.17 trillion).

Although impressive for its size, U.S. Latino GDP is truly remarkable for its rapid growth. Among the ten largest GDPs, U.S. Latino GDP was the third fastest growing between 2010 and 2023. Throughout that period, average annual U.S. Latino real GDP growth was 4.4%, compared to 2.2% for the overall U.S. economy. Between 2010 and 2023, Latino real GDP increased by a total of 74.8%, compared to 27.4% for non-Latino GDP. In other words, Latino GDP is growing 2.3 times faster than overall U.S. GDP and 2.7 times faster than non-Latino GDP.

Professor Matthew Fienup, executive director of Cal Lutheran, said, "Now surpassing the extraordinary $4 trillion milestone, Latino GDP illustrates just how vital Latino strength and resilience is to the nation's economy."

A "growth point" for the United States

Although Latinos represent 19.5% of the country's population, they have contributed 30.6% of national GDP growth since 2019 and 56.7% of population growth between 2010 and 2023, with nearly 1.2 million people added in 2023 alone.

For Hayes-Bautista, this economic dynamism shows that Latinos are the "spearhead of growth (...) If they saw us, if they invested in the Latino workforce and entrepreneurs as they do in the Anglo population, the economic preeminence of the United States would be maintained throughout the 21st century."

In his 2017 book, The New California, Hayes-Bautista noted that since 1940, Latinos have maintained the highest labor force participation rate. According to the author, this trend has not only persisted but is expected to continue rising. With a Latino population of 65 million—characterized by youth and roughly one million births annually—their presence in the labor market is projected to keep growing in the coming years.