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Hispanic Immigrants: The New Labor Force and the Market. Doug Woodward Director, Division of Research Professor of Economics Moore School of Business University of South Carolina. Immigration in the South. The South is a new receiving area Immigrant labor growing rapidly
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Hispanic Immigrants: The New Labor Force and the Market Doug Woodward Director, Division of Research Professor of Economics Moore School of Business University of South Carolina
Immigration in the South • The South is a new receiving area • Immigrant labor growing rapidly • Little understood • Promising and disquieting implications
Overview: The Economic Logic • Globalization • Pulling force: Employment opportunities in U.S. • Pushing force: Declining opportunities in Latin America • Sustaining force: High productivity • Output per wage cost is favorable • Low unit labor costs • Work Ethic • Rising employment creates rising income • This income determines buying power • Disposable income • Remittances • Buying power determines new spending
Economic Pull • Private Sector Response to Globalization • Some companies pursue a low-cost economic strategy at home • Import cheap labor to U.S., including South Carolina • Leads to greater economic output than possible otherwise
Income Source: U.S. Census, Money Income in U.S.; 2003
Buying Power • Buying Power: The total personal income of residents that is available, after taxes, for spending on goods and services. (i.e. Disposable Income)
Hispanic Buying Power • 1990 – 2009, buying power to grow at a dynamic annual compound rate of 8.2% • By 2009, Hispanics to account for 9% of US buying power • In dollar power, economic clout to grow from $222 billion (1990) to $992 billion (2009) • Population growth grew at 141% between 1990-2009 • Disposable income of $686 billion • GA Hispanic market estimated at $10.9 billion
Latino Buying Power:South Carolina and United States Disposable Income in 2004 (in thousand of dollars) Source: The Multicultural Economy, Selig Center for Economic Growth.
Buying Power: Southern States Are Increasingly Important for Hispanics • Seven states from the South (South Carolina ranks #9) are among the Top ten fast growing consumer markets for Hispanics between 1990 and 2004. Source: The Multicultural Economy, Selig Center for Economic Growth.
Hispanic Buying Power • 1990 – 2009, buying power to grow at a dynamic annual compound rate of 8.2% • By 2009, Hispanics to account for 9% of US buying power • In dollar power, economic clout to grow from $222 billion (1990) to $992 billion (2009) • Population growth grew at 141% between 1990-2009 • Disposable income of $686 billion • GA Hispanic market estimated at $10.9 billion
US Consumer patternsHispanics and Non Hispanics, 2002 Note: Rest includes reading, tobacco products, cash contributions and miscellaneous Source: The Multicultural Economy
Income Source: U.S. Census, Money Income in U.S.; 2003
Industries Hiring Hispanics Source: Latino Labor Report, First Quarter 2004, Pew Hispanic Center
US Consumer patternsHispanics and Non Hispanics, 2002 Note: Rest includes reading, tobacco products, cash contributions and miscellaneous Source: The Multicultural Economy
Hispanic Buying Power • Buying Power: Total personal income of residents that is available, after taxes, for spending on goods and services. Source: The Multicultural Economy
Hispanic Buying Power • Largest Consumer markets for Hispanics Source: The Multicultural Economy
Southern states are increasingly important for Hispanics • Seven states from the South (South Carolina ranks #9) are among the Top ten fast growing consumer markets for Hispanics between 1990 and 2004. Source: The Multicultural Economy
Hispanic Buying Power in the South East Source: The Multicultural Economy
Hispanic Buying Power in South Carolina Source: The Multicultural Economy
Hispanics Buying Power:South Carolina and United States • South Carolina is still a bit behind national trend. Buying Power in 2004 (in thousand of dollars) Source: The Multicultural Economy
US Consumer patternsHispanics and Non Hispanics, 2002 Note: Rest includes reading, tobacco products, cash contributions and miscellaneous Source: The Multicultural Economy
Hispanic Buying Power • Buying Power: Total personal income of residents that is available, after taxes, for spending on goods and services. Source: The Multicultural Economy
Hispanic Buying Power • Largest Consumer markets for Hispanics Source: The Multicultural Economy
Southern states are increasingly important for Hispanics • Seven states from the South (South Carolina ranks #9) are among the Top ten fast growing consumer markets for Hispanics between 1990 and 2004. Source: The Multicultural Economy
Hispanic Buying Power in the South East Source: The Multicultural Economy
Hispanic Buying Power in South Carolina Source: The Multicultural Economy
Hispanics Buying Power:South Carolina and United States • South Carolina is still a bit behind national trend. Buying Power in 2004 (in thousand of dollars) Source: The Multicultural Economy
States with Emerging Hispanic Populations • Memphis, Tennessee • Hispanic population of 53,628 with a working population of 27,429 • Concentrated in construction, distribution and retail trade • $570.8 million in wages • $359.6 million spent in local economy causing an additional $664.0 million by workers and businesses who benefit from the Latino population
States with Emerging Hispanic Populations • Eastern North Carolina • Study of direct and indirect impact of Hispanic workers shows how much impact the population has on the region, based on remittance patterns
States with Emerging Hispanic Populations • Banking in North Carolina • The Latino Community Credit Union opened in Durham to support Hispanic population in the area in 2000 • It has since opened offices in Charlotte, Raleigh, Greensboro and Fayetteville • The bank has 27,000 members with over $17 million in assets • An average of 1500 new customers join each month
States with Emerging Hispanic Populations • Georgia • Approximately 10,000 of the 414,000 small business loans in fiscal year 2002 went to Hispanic-owned small business. • 11 of Atlanta’s top 25 minority owned firms are owned by Hispanics.
Market Share in Buying Power 1990 & 2004 Source: The Multicultural Economy
Immigration and the Low Wage Strategy • Businesses can import almost unlimited cheap unskilled labor • Displaces and lowers wages of existing labor? • Many jobs not desired by local citizens • Demand for labor greater for Latinos immigrants and raises output • Our state (like everywhere) is virtually ignoring this phenomenon • Unfortunately, immigrant labor does not create jobs that we can track
The South Carolina Survey • To better understand the phenomenon, researchers from the Moore School of Business interviewed 381 Mexican immigrants from across the state in 2005. • The surveys covered all regions of South Carolina, from the Lowcountry to the Midlands and the Upstate.
Regions of Data Collection Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.
U.S. Hispanic Population by Ethnic Subgroup Source: U.S. Bureau of the Census, March 2002.
S.C. Hispanic Population by Ethnic Subgroup Source: U.S. Bureau of the Census, 2003 American Community Survey.
Respondent Gender Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.
Average Age of Respondents Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.
Industries Hiring Hispanics Source: Latino Labor Report, First Quarter 2004, Pew Hispanic Center
Industries Hiring Mexican Immigrantsin South Carolina Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.
Average Annual Income* *Annual income based on weekly wages over 50 weeks. Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.
Average Monthly Remittances Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.
Number of Times that Remittances Are Sent Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.