Latinas contributed $1.3 trillion to the US economy, a new report says. This number could be even higher

Latinas make substantial contributions to the US economy.

The Hispanic female population will contribute $1.3 trillion to the gross domestic product in 2021, up from $661 billion in 2010, according to a recent report funded by Bank of America.

This marks a real GDP growth rate of 51.1% between 2010 and 2021, which is 2.7 times the economic contribution of the non-Hispanic population.

Total U.S. Latino output in 2021 was also greater than the entire state of Florida that year, the report said, citing data from the Bureau of Economic Analysis. In fact, only those in California, Texas, and New York, respectively, were higher that year.

Despite these high numbers, some economists believe that U.S. Latinas may contribute more to GDP than the report’s figure.

Belinda Román, Associate Professor of Economics at the University of St. Mary’s, said there is activity in various areas that the data may not capture. Child care is one of them.

“A lot of it is uncompensated care,” she said in an interview with CNBC. “Interestingly, there’s a lot of Latinas in that space that you’re not going to see in these numbers, so I think to some degree it might not actually be big enough.”

Economist Mónica García-Pérez also believes the figure could be higher, saying that some of the “immeasurable” contributions of Latinas—like being a stay-at-home mom who provides childcare for other neighbors, for example—allow ” other groups”. to participate in the labor market”.

She also highlighted the occupational roles they generally hold as posing some difficulties in evaluating their contributions.

“This group is very sensitive to shocks and could be related to their presence in sectors where there is a lot of mobility or turnover,” said the Fayetteville State University economics professor. She added that they tend to be concentrated in care and service industries such as health care, retail and hospitality. This is what makes them a “moving part” in economic cycles.

In the event of a recession, for example, García-Pérez said Latinas are “likely to lose their jobs much faster being in the sectors they’re in,” as seen during the Covid-19 pandemic. “But they’re also more likely to be re-entered into the market because the cost of entry and the type of positions they’re entering have lower barriers.”

When it comes to labor force participation, Latinas outperform other groups, the BofA report found.

From 2000 to 2021, the participation rate for Latinas increased by 7.5 percentage points. On the other hand, the participation rate of non-Hispanic women during the same period was constant.

The group was also more resilient than others. Although labor force growth generally slowed in 2020, growth rates for Hispanic men and women were still positive. In contrast, the non-Latino labor force growth rate was negative that year, meaning more people left the labor force than entered it.

Beyond that, Latino GDP grew at more than five times the rate of non-Latino GDP between 2019 and 2021, gaining 7.7% versus 1.5%. Meanwhile, Hispanic male GDP grew at nearly four times the rate of non-Latino GDP during those years, at 5.9 percent.

These contributions are notable given that Latin American households have been some of the hardest hit by the pandemic.

“When the broader economy needs it most, that’s when we see the most dramatic contributions from Latinos in the U.S.,” said economist Matthew Fienup, co-author of the report and executive director of the Center for Economic Research and Forecasting at California Lutheran University. “While all Latinos are a source of economic strength, Latinos are the engines of vitality that the economy needs.”

“If Covid-19 couldn’t stop this growth, it’s hard to see what would,” said David Hayes-Bautista, co-author of the report and director of the Center for the Study of Latino Health and Culture at the UCLA School of Medicine. .

Since the late 1970s, the share of Latinas with a job has increased. Specifically, the employment-to-population ratio for the group rose from 41.6 percent in December 1978 to 56 percent in December 2023, according to data from the Economic Policy Institute.

By comparison, the share of black women—who, along with Latinas, face the worst wage gaps compared to white, non-Hispanic men—increased by 11.9 percentage points. The value for women as a whole increased by 8.8 percentage points during that period.

“Some of this is expanding opportunities for women,” said Elise Gould, senior economist at EPI. Part of that is also due to the lack of wage growth for typical workers in recent decades, she said. “Because it can be hard to make progress, households may have had to work harder to do better.”

That seems to be paying off to some extent. Increasing labor force participation as well as an increase in educational attainment result in group income gains, notably about 2.5 times those of non-Hispanic women from 2010 to 2021, found co- authors of the BofA report.

Hayes-Bautista also cited intergenerational changes and the faster growth of the Hispanic female population relative to the Hispanic male and non-Latino populations as another catalyst for Latinas’ economic output.

“What we started to see around 2000 is that the first generation of immigrants started to leave the workforce,” he said. “As they get older, their shoes are filled by their daughters and granddaughters, who are twice as numerous in terms of population size, and bring much higher levels of human capital.”

Latinas in particular supported the contributions of Latinos as a whole. Fienup told CNBC that overall Latino contributions have led to positive labor force growth in certain regions of the country at times when the non-Latino labor force has been contracting.

“We expect this dynamic to be increasingly important over the next three decades,” he said. “What we’re seeing now is really just the beginning of what’s going to be an increasingly important story in the United States economy.”