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Hispanic Immigrants: The New Labor Force and the Market

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

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  1. 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

  2. Immigration in the South • The South is a new receiving area • Immigrant labor growing rapidly • Little understood • Promising and disquieting implications

  3. 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

  4. 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

  5. Income Source: U.S. Census, Money Income in U.S.; 2003

  6. 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)

  7. 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

  8. 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.

  9. 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.

  10. 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

  11. Hispanic Buying Power in the South East

  12. Fastest Growing Hispanic Consumer Markets

  13. Spending Patterns in U.S.

  14. Housing……

  15. US Consumer patternsHispanics and Non Hispanics, 2002 Note: Rest includes reading, tobacco products, cash contributions and miscellaneous Source: The Multicultural Economy

  16. Income Source: U.S. Census, Money Income in U.S.; 2003

  17. Industries Hiring Hispanics Source: Latino Labor Report, First Quarter 2004, Pew Hispanic Center

  18. US Consumer patternsHispanics and Non Hispanics, 2002 Note: Rest includes reading, tobacco products, cash contributions and miscellaneous Source: The Multicultural Economy

  19. 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

  20. Hispanic Buying Power • Largest Consumer markets for Hispanics Source: The Multicultural Economy

  21. 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

  22. Hispanic Buying Power in the South East Source: The Multicultural Economy

  23. Hispanic Buying Power in South Carolina Source: The Multicultural Economy

  24. 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

  25. US Consumer patternsHispanics and Non Hispanics, 2002 Note: Rest includes reading, tobacco products, cash contributions and miscellaneous Source: The Multicultural Economy

  26. 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

  27. Hispanic Buying Power • Largest Consumer markets for Hispanics Source: The Multicultural Economy

  28. 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

  29. Hispanic Buying Power in the South East Source: The Multicultural Economy

  30. Hispanic Buying Power in South Carolina Source: The Multicultural Economy

  31. 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

  32. 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

  33. 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

  34. 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

  35. 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.

  36. Market Share in Buying Power 1990 & 2004 Source: The Multicultural Economy

  37. 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

  38. 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.

  39. Regions of Data Collection Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

  40. U.S. Hispanic Population by Ethnic Subgroup Source: U.S. Bureau of the Census, March 2002.

  41. S.C. Hispanic Population by Ethnic Subgroup Source: U.S. Bureau of the Census, 2003 American Community Survey.

  42. Respondent Gender Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

  43. Average Age of Respondents Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

  44. Industries Hiring Hispanics Source: Latino Labor Report, First Quarter 2004, Pew Hispanic Center

  45. Industries Hiring Mexican Immigrantsin South Carolina Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

  46. Type of Work

  47. Average Annual Income* *Annual income based on weekly wages over 50 weeks. Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

  48. Average Monthly Remittances Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

  49. Number of Times that Remittances Are Sent Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

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