Power of the Purse: How Hispanics Contribute to the U.S. Economy
Date: December 14, 2017
The report, Power of the Purse: How Hispanics Contribute to the U.S. Economy, finds:
- Hispanic households account for a large portion of America’s spending power. In 2015, Hispanics had an estimated after-tax income of more than $687.8 billion. That figure is equivalent to almost one out of every 10 dollars of disposable income held in the United States that year. Foreign-born Hispanic households made up a sizeable portion of that figure: We estimate their spending power totaled $322.1 billion that year.
- The growing earnings of Hispanic households have made them major contributors to U.S. tax revenue. In 2015, Hispanic households contributed almost $215 billion to U.S. tax revenues as a whole, including almost $76 billion in state and local tax payments. Of this, foreign-born Hispanics contributed $96.9 billion in tax revenues nationwide. That included almost $36 billion in state and local taxes and more than $61 billion in taxes to the federal government.
- In some states, Hispanics account for a large percentage of spending power and tax revenues overall. In both Texas and California, Hispanic households had more than $125 billion in after-tax income in 2015, accounting for more than one of every five dollars available to spend in each state that year. In Nevada, a state with a rapidly growing Hispanic population, their earnings after taxes accounted for more than one-sixth of the spending power in the state. In Arizona and Florida, Hispanics contributed almost one out of every six dollars in total tax revenues in 2015.
- Hispanics, and foreign-born Hispanics in particular, play an important role sustaining America’s Medicare and Social Security programs. In 2015, Hispanic households contributed $101.8 billion to Social Security and $25.3 billion to Medicare’s core trust fund. That included the almost $46.2 billion foreign-born Hispanics contributed to Social Security, and the $11.4 billion they gave to Medicare. Past studies have indicated that from Medicare in particular, immigrants draw down far less than they put into the trust fund each year, making such tax contributions particularly valuable.
- Hispanic Americans who only recently gained eligibility to vote could be a big factor in the 2020 election. Between 2015 and 2020, a projected 5.7 million Hispanics will gain eligibility to vote for the first time, most by turning 18 and aging into the electorate. In six states carried by Republicans in 2016, including Arizona, Pennsylvania, and Wisconsin, the estimated population of newly eligible Hispanic voters will exceed Donald Trump’s 2016 margin of victory. In Michigan, a state Trump carried by 10,704 votes, almost 46,300 Hispanic Americans will gain eligibility by 2020.
- Hispanic business owners provide valuable employment opportunities to American workers. Hispanic entrepreneurs owned more than 20 percent of all transportation and warehouse businesses in the United States in 2012. They also owned roughly one out of every eight of the country’s construction firms. In total, businesses with majority Hispanic ownership provided almost 2.7 million jobs to U.S. workers. In five states, including Florida and Texas, they employed more than 100,000 people in 2012.
Read the full report here.