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The Latino business sector has become so large and powerful in Los Angeles that if it were its own state, its gross domestic product would exceed the GDPs of states like Louisiana and Oregon.
That’s part of a study expected to be released Sept. 8 called “Los Angeles Metro Latino Gross Domestic Product 2022,” conducted by two local university affiliate research organizations and funded by the Bank of America Charitable Foundation.
The study, the first of its kind for the LA area, focuses largely on the growth of the area’s Latino market, as well as its overall size and educational attainment.
Not only is the Latino community in Los Angeles larger than any other US city, but between 2010 and 2018, the number of people in the LA area with a bachelor’s degree or higher grew 2.6 times faster among Latinos than non-Latinos. . And the Hispanic-Latino labor force participation rate was on average 4.3 percentage points higher than that of non-Latinos. Population growth and education are associated with a thriving economy.
Raul Anaya, business bank’s local president at Bank of America and the bank’s top Latino, said the report confirms what the Los Angeles Latino business community believes to be true — home ownership, home buying and small business formation across the country and especially in Los Angeles, where Latinos make up 45% of the population. Community help is all driving.
The Los Angeles Metropolitan Statistical Area—the government that includes the Los Angeles, Long Beach, and Anaheim areas—is the largest MSA by Latino population, with 6 million Latinos in 2018. Master data is available.)
The Los Angeles metro area’s Latino GDP in 2018 was $285 billion, larger than the combined economies of states like Connecticut, Louisiana and Oregon, the report said.
“I think these are things that Bank of America has recognized for many, many years around growth, around wealth accumulation, around home ownership, around business formation in the Latino community,” Anaya said.
Trend lines
Anaya said the bank has 12 million Latino customers, including one million Latino small businesses, and the report’s findings will allow the company to stay ahead of future trends.
“To give one example, currently, more than 60% of our financial centers across the country have associates who are certified in Spanish and ready to speak with our Latino clients, whether they are individuals, families, or small businesses. Anaya added. “That’s how they choose to interact with us, so it’s important that our bankers are culturally aware of what our Latino customers’ needs are.”
Statewide, Latinos are starting businesses at a faster rate than the national average.
The Latino GDP report details how the LA area’s Latino economy is highly fragmented and how local — and regional — Latinos contribute significantly to the population and labor force.
“The main industry sectors driving this growth are around retail, transportation and hospitality,” Anaya said. “Recognizing that the Latino community is an important part of the growth of the Greater LA economy, and recognizing that LA County has a population of over 10 million people, it is important to have a diverse economy in order to cope with the current economic climate. Oscillations that occur in any region.
“The diversity of the industries and how (Latinos) can start businesses so quickly, how they can accumulate wealth so quickly, it’s good for the overall growth and resilience of the Southern California region. It’s an economic powerhouse.”
The main player
When released, the report details how Latinos have made a strong contribution to the Los Angeles workforce. Between 2010 and 2018, the Latino community added an average of 38,610 workers per year to the state’s labor force, while non-Latinos added an average of just 7,206 workers per year. Although they make up only 45 percent of the local population, Latinos are responsible for 84 percent of labor force growth.
Portos Bakery Inc. Since President Raul Porto opened his business in 1976, the business landscape in Los Angeles has changed dramatically, due in part to growth.
“For starters, the Latino population was much smaller and had much lower purchasing power,” he said. What’s more, non-Latinos are now more open to working with Latino merchants, “and they’re more open to trying foods from different countries.”
According to Porto, like any business, Porto had to overcome many challenges. “Initially it was about getting enough customers and sales to survive. Once we got past that, hiring staff and managing the growth became part of our next challenge.”
In addition to significantly increasing the number of workers, the Latino community has seen significant growth in home ownership. Between 2010 and 2018, the number of Latino homeowners increased by more than 16,000, while the number of non-Latino homeowners increased by only 1,300.
Anaya said the key to predicting what the future of the Los Angeles business community will look like in 10 years is to look at what is driving growth in the area.
“Look at the trends. The educational achievement of the Latino community here in LA is growing 2 1/2 times faster than non-Latinos,” Anaya said.
“Latinos have a much higher labor force participation rate, seven times higher than non-Latinos. The Latino community is very entrepreneurial, and when you look at the creation of businesses, that means that over time, in the years to come, the Latino community here in greater LA will continue to be a larger and larger part of it. Economy of Southern California.
The research for the report was conducted by Matthew Finup and Dan Hamilton of the Center for Economic Research and Forecasting at California Lutheran University, along with David Hayes-Bausta and Paul Hsu of the Center for Latino Health and Cultural Studies at the UCLA Geffen School of Medicine.
The report will be released at the L’Attitude Los Angeles trade conference on September 8 at the Lascaux Theater.
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