Hispanic Americans are firm believers in the American Dream: hard work will earn you and your family a better life. Expected to make up much of the growth in the American workforce in the next four decades, Latinos are helping to revitalize communities and strengthen local economies all throughout the nation. Hard work however, is just one contributing factor to ensuring that the country remains prosperous. In order to support investments in education, infrastructure, health care, and many other areas that millions of Americans rely on, everybody must contribute financially through the tax system. Luckily for this country, Latinos are a tremendous asset thanks to their commitment to paying their fair share of taxes.
In honor of Tax Day, let’s take a by-the-numbers look at the economic impact that Latinos have on the U.S. economy.
Labor Force Participation
- Nearly 16 percent or about 25 million workers in the U.S. labor force are Latino.
- By 2050, the overall share of Latinos in the U.S. workforce is expected to double to nearly 30 percent.
- In 2014, Hispanic adults had the greatest participation rate in the U.S. workforce with more than 65 percent working or actively looking for a job.
- Last February, the Hispanic unemployment rate fell to 6 percent, finally returning to its prerecession lows.
Entrepreneurship and Purchasing Power
- Despite slower growth during the recession, the number of Hispanic-owned business was projected to grow by nearly 40% between 2007 and 2013, to nearly 3.2 million businesses.
- In 2013, sales receipts for Hispanic-owned businesses in the United States totaled almost $470 billion.
- Because the Latino population is comparatively younger than other racial and ethnic groups and the number of Hispanics in the United States is quickly growing, Hispanic purchasing power is also expected to grow to nearly $1.7 trillion by 2019.
- In 2013, Hispanic households paid almost $124 billion in federal taxes, including individual and corporate income taxes, payroll taxes, and excise taxes, and almost $67 billion in state and local taxes.
- States with large Hispanic populations have also benefited from their tax contributions. Hispanic households accounted for 23 percent of state and local tax payments in Texas, 20 percent in California, 18 percent in Florida, and 15 percent in Arizona.
- Tax contributions from Hispanic households also play a critical role in funding Social Security and Medicare. In 2013, Hispanic households contributed about $98 billion to Social Security and $23 billion to Medicare through payroll taxes. Many economists believe that tax contributions from young Latino workers will be the key to keeping the Social Security system strong.