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Hispanic Immigrants: The New Labor Force and the Market. Doug Woodward Director, Division of Research Professor of Economics Moore School of Business University of South Carolina. Immigration in the South. The South is a new receiving area Immigrant labor growing rapidly

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Hispanic immigrants the new labor force and the market l.jpg

Hispanic Immigrants: The New Labor Force and the Market

Doug Woodward

Director, Division of Research

Professor of Economics

Moore School of Business

University of South Carolina


Immigration in the south l.jpg
Immigration in the South

  • The South is a new receiving area

  • Immigrant labor growing rapidly

  • Little understood

  • Promising and disquieting implications


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Overview: The Economic Logic

  • Globalization

    • Pulling force: Employment opportunities in U.S.

    • Pushing force: Declining opportunities in Latin America

  • Sustaining force: High productivity

    • Output per wage cost is favorable

    • Low unit labor costs

    • Work Ethic

  • Rising employment creates rising income

  • This income determines buying power

    • Disposable income

    • Remittances

  • Buying power determines new spending


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Economic Pull

  • Private Sector Response to Globalization

  • Some companies pursue a low-cost economic strategy at home

  • Import cheap labor to U.S., including South Carolina

  • Leads to greater economic output than possible otherwise


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Income

Source: U.S. Census, Money Income in U.S.; 2003


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Buying Power

  • Buying Power: The total personal income of residents that is available, after taxes, for spending on goods and services. (i.e. Disposable Income)


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Hispanic Buying Power

  • 1990 – 2009, buying power to grow at a dynamic annual compound rate of 8.2%

  • By 2009, Hispanics to account for 9% of US buying power

  • In dollar power, economic clout to grow from $222 billion (1990) to $992 billion (2009)

  • Population growth grew at 141% between 1990-2009

  • Disposable income of $686 billion

    • GA Hispanic market estimated at $10.9 billion


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Latino Buying Power:South Carolina and United States

Disposable Income in 2004 (in thousand of dollars)

Source: The Multicultural Economy, Selig Center for Economic Growth.


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Buying Power: Southern States Are Increasingly Important for Hispanics

  • Seven states from the South (South Carolina ranks #9) are among the Top ten fast growing consumer markets for Hispanics between 1990 and 2004.

Source: The Multicultural Economy, Selig Center for Economic Growth.


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Hispanic Buying Power Hispanics

  • 1990 – 2009, buying power to grow at a dynamic annual compound rate of 8.2%

  • By 2009, Hispanics to account for 9% of US buying power

  • In dollar power, economic clout to grow from $222 billion (1990) to $992 billion (2009)

  • Population growth grew at 141% between 1990-2009

  • Disposable income of $686 billion

    • GA Hispanic market estimated at $10.9 billion





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Housing…… Hispanics


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US Consumer patterns HispanicsHispanics and Non Hispanics, 2002

Note: Rest includes reading, tobacco products, cash contributions and miscellaneous

Source: The Multicultural Economy


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Income Hispanics

Source: U.S. Census, Money Income in U.S.; 2003


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Industries Hiring Hispanics Hispanics

Source: Latino Labor Report, First Quarter 2004, Pew Hispanic Center


Us consumer patterns hispanics and non hispanics 200218 l.jpg
US Consumer patterns HispanicsHispanics and Non Hispanics, 2002

Note: Rest includes reading, tobacco products, cash contributions and miscellaneous

Source: The Multicultural Economy


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Hispanic Buying Power Hispanics

  • Buying Power: Total personal income of residents that is available, after taxes, for spending on goods and services.

Source: The Multicultural Economy


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Hispanic Buying Power Hispanics

  • Largest Consumer markets for Hispanics

Source: The Multicultural Economy


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Southern states are increasingly important for Hispanics Hispanics

  • Seven states from the South (South Carolina ranks #9) are among the Top ten fast growing consumer markets for Hispanics between 1990 and 2004.

Source: The Multicultural Economy


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Hispanic Buying Power in the South East Hispanics

Source: The Multicultural Economy


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Hispanic Buying Power in South Carolina Hispanics

Source: The Multicultural Economy


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Hispanics Buying Power: HispanicsSouth Carolina and United States

  • South Carolina is still a bit behind national trend.

    Buying Power in 2004 (in thousand of dollars)

Source: The Multicultural Economy


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US Consumer patterns HispanicsHispanics and Non Hispanics, 2002

Note: Rest includes reading, tobacco products, cash contributions and miscellaneous

Source: The Multicultural Economy


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Hispanic Buying Power Hispanics

  • Buying Power: Total personal income of residents that is available, after taxes, for spending on goods and services.

Source: The Multicultural Economy


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Hispanic Buying Power Hispanics

  • Largest Consumer markets for Hispanics

Source: The Multicultural Economy


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Southern states are increasingly important for Hispanics Hispanics

  • Seven states from the South (South Carolina ranks #9) are among the Top ten fast growing consumer markets for Hispanics between 1990 and 2004.

Source: The Multicultural Economy


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Hispanic Buying Power in the South East Hispanics

Source: The Multicultural Economy


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Hispanic Buying Power in South Carolina Hispanics

Source: The Multicultural Economy


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Hispanics Buying Power: HispanicsSouth Carolina and United States

  • South Carolina is still a bit behind national trend.

    Buying Power in 2004 (in thousand of dollars)

Source: The Multicultural Economy


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States with Emerging Hispanic Populations Hispanics

  • Memphis, Tennessee

  • Hispanic population of 53,628 with a working population of 27,429

  • Concentrated in construction, distribution and retail trade

  • $570.8 million in wages

  • $359.6 million spent in local economy causing an additional $664.0 million by workers and businesses who benefit from the Latino population


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States with Emerging Hispanic Populations Hispanics

  • Eastern North Carolina

  • Study of direct and indirect impact of Hispanic workers shows how much impact the population has on the region, based on remittance patterns


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States with Emerging Hispanic Populations Hispanics

  • Banking in North Carolina

  • The Latino Community Credit Union opened in Durham to support Hispanic population in the area in 2000

  • It has since opened offices in Charlotte, Raleigh, Greensboro and Fayetteville

  • The bank has 27,000 members with over $17 million in assets

  • An average of 1500 new customers join each month


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States with Emerging Hispanic Populations Hispanics

  • Georgia

  • Approximately 10,000 of the 414,000 small business loans in fiscal year 2002 went to Hispanic-owned small business.

  • 11 of Atlanta’s top 25 minority owned firms are owned by Hispanics.


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Market Share in Buying Power 1990 & 2004 Hispanics

Source: The Multicultural Economy


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Immigration and the Low Wage Strategy Hispanics

  • Businesses can import almost unlimited cheap unskilled labor

  • Displaces and lowers wages of existing labor?

    • Many jobs not desired by local citizens

    • Demand for labor greater for Latinos immigrants and raises output

  • Our state (like everywhere) is virtually ignoring this phenomenon

  • Unfortunately, immigrant labor does not create jobs that we can track


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The South Carolina Survey Hispanics

  • To better understand the phenomenon, researchers from the Moore School of Business interviewed 381 Mexican immigrants from across the state in 2005.

  • The surveys covered all regions of South Carolina, from the Lowcountry to the Midlands and the Upstate.


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Regions of Data Collection Hispanics

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.


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U.S. Hispanic Population by Ethnic Subgroup Hispanics

Source: U.S. Bureau of the Census, March 2002.


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S.C. Hispanic Population by Ethnic Subgroup Hispanics

Source: U.S. Bureau of the Census, 2003 American Community Survey.


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Respondent Gender Hispanics

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.


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Average Age of Respondents Hispanics

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.


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Industries Hiring Hispanics Hispanics

Source: Latino Labor Report, First Quarter 2004, Pew Hispanic Center


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Industries Hiring Mexican Immigrants Hispanicsin South Carolina

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.


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Type of Work Hispanics


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Average Annual Income* Hispanics

*Annual income based on weekly wages over 50 weeks.

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.


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Average Monthly Remittances Hispanics

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.


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Number of Times that Remittances Are Sent Hispanics

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.


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Medium of Remittance Transfer to Mexico Hispanics

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.


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States of Mexico Hispanics

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.


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Respondents’ Home States* Hispanics

*Only those Mexican states whose aggregate numbers represented more than 1 percent of the respondent population are listed.

Source: Mexican Immigrant Survey, 2005, Moore School of Business, University of South Carolina.


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Percentage of Respondents with Bank Accounts Hispanics

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.


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Top Reasons Indicated For Having No Bank Account Hispanics

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.


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Housing Hispanics

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.


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Average Dollars Spent on Housing Per Month Hispanics

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.


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Respondents’ Years of Education Hispanics

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.


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Mexican Spending in South Carolina Hispanics

  • Total Buying Power: $ 4.4 billion

  • Out of 400,000 Latinos living in the state, it is considered that 80 percent are Mexican

  • Assume two-thirds of these immigrants are in the South Carolina labor force. This yields 211,200 Mexicans working in South Carolina.

  • Given an average annual income of $21,910, that means the total earnings of Mexican immigrants in South Carolina amounts to $4,416,192,000.


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This Hispanics$4.4 billion Mexican “buying power” is in South Carolina is much higher than previously reported.

  • An often-cited estimate for all Latinos in South Carolina has been reported to be $2.1 billion in 2004 (Selig Center for Economic Growth).

  • Latinos accounted for 1.9 percent of the South Carolina’s $103.6 billion in overall total buying power.

  • The Selig Center figures are based on official U.S. government data sources and do not adequately account for undocumented immigrants, so their figure fall below the total for South Carolina’s Latino population.


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$3.5 Billion: Estimate of Local HispanicsSpending by Mexican Immigrants

  • Of the $4.4 billion in Mexican buying power

    • Some money is sent via remittances to Mexico (16 percent of income) and some saving in the U.S.

    • Assume about 20 percent is not spent locally.

    • This 20 percent leakage is consistent with the recent North Carolina economic impact study.

  • Taking 80 percent the total $4.4 billion in earnings as the amount spent in South Carolina, it turns out that Mexican immigrant local buying power totals $3.5 billion in 2005.


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Time Living in South Carolina Hispanics

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.


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Respondents Future Plans Hispanics

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.


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Latino employment growing rapidly Hispanics

Low unit labor costs, ample supply of labor

Construction boom benefits from new workers

Employment spreading to other industries

Employment growth creates income and buying power

SC spending impact: $2.20 - 2.35 billion

What we need to know:

Specific spending behavior

Money sent to home communities in Latin America

Household formation and housing implications

Entrepreneurial activity

Job displacement effects

Local and state tax effects

Summary


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For the Complete Report and Updates Hispanics

  • Moore School of Business web page

  • research.moore.sc.edu

  • This also includes a blog


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