The Economic Impact of Latino Workers: A By-the-Numbers Breakdown for Tax Day

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

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Entrepreneurship and Purchasing Power

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  • 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.

Tax Contributions

Photo: http://401kcalculator.org, Creative Commons

Photo: http://401kcalculator.org, Creative Commons

  • 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.

El Día de los Niños: A Day to Celebrate Benchmarks and Help Our Children Reach Even Higher

Yesterday, Secretary of Education Arne Duncan announced that the nation has reached an important milestone in education: in 2012 (the latest year that statistics are available), the national high school graduation rate reached 80 percent. Even more encouraging, researchers believe that if this trend continues, that number will increase to 90 percent by 2020.

The story for Latino students is just as positive, with graduation rates increasing by 15 percent. This impressive jump is great news not only for the Latino community but for the nation overall. Latinos will constitute close to 20 percent of the nation’s labor force in 2020, and educated workers are essential to ensuring that our economy remains robust and competitive.

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The notable improvement in graduation rates can be attributed to several factors. Teachers, parents, and students are finding better ways to partner and communicate, giving children a greater chance at academic success. We believe new education standards are also a key component in making our kids ready for college and able to step into the career path of their choice.

In an increasingly competitive marketplace, our country can no longer be satisfied sitting in the middle of the pack when it comes to academic performance among industrialized nations. In the last test given by the Program for International Student Assessment, in 2012, 29 countries ranked higher than the U.S. in math and 22 in science. This means that while it is great news that our graduation rates are improving, it will take much more to prepare our children for the jobs of the future. That’s why we are encouraging innovation, creativity, and the broader thinking skills necessary to compete in a global job market.

The Common Core State Standards (CCSS) are setting higher benchmarks and improving the way our kids learn. Rather than simply memorizing facts, they are being taught to connect what they learn in the classroom to the world around them, sharpening their analytical skills, and reawakening a love of learning. Fewer, higher, and clearer standards are also allowing our teachers to be creative in the classroom and dive deeper into subject areas, imparting a greater breadth of knowledge.

The CCSS lay out clear guidelines that provide parents with a better understanding of how to best support their children’s learning. They are ensuring that, regardless of race, ethnicity, or ZIP code, all youth are given the same opportunity to succeed. These new standards are elevating what and how we teach our children, a vital component to maintaining the graduation rates we celebrate today and seeing them rise in the future.