The Emerging Minority Majority

As new demographic estimates become available, I make it a practice to review the similarities and differences between the new numbers and last year’s estimates. This time around, the significance that the role ethnic households will play in future growth struck me, specifically the Hispanic segment.

As we all know, immigration has driven and will continue to drive the nation’s population growth. No single group has boosted growth more than the Hispanics segment. In 1990, the Hispanic population in the United States was 7.9 percent. Today, Nielsen Claritas estimates, Hispanics account for 15.5 percent. And if the segment continues to grow at a rate three times faster than the U.S. population in general, as a recent Goldman Sachs study suggests, investors must pay attention to this emerging group. To reinforce the importance of Hispanics, demographers at the Pew Research Center recently predicted that the United States will be a “minority majority” nation by 2050, Hispanics making up as much as 29 percent of the total population.

Ethnic shifts have already occurred in traditional gateway cities like Los Angeles, San Antonio and El Paso, Texas-border towns and booming coastal metros. While New York and Chicago served as magnets for newcomers at the turn of the 20th century, today’s immigrants from Latin America and Mexico typically head to Los Angeles, San Francisco, Miami and Atlanta. They settle in these places for the same reasons that earlier waves of Europeans landed where they did: Friends and family members had already formed self-sustaining ethnic communities. This is particularly true of less skilled immigrants who rely on kinship and informal networks to find work. They’re also attracted to areas whose climates are conducive to outdoor recreational activities and low costs of living. Not surprisingly, those markets with the highest proportion of Hispanics tend to sit along or near the Mexican border.

So I encourage serious investors to pay attention to the Hispanic market and its impact on the American landscape. If current trends hold true, no single segment may play a more important role in driving future growth and shifts in consumer trends.

By Terry Munoz

Source: National Jeweler

Predicting The Future: Hispanics In The 2010 Census.

Now that 2009 is before us, predictions for the future of Hispanics in the U.S. can look forward to 2010. Overall, the Hispanic lifeline is long and the outlook is good. However, what we think we know is changing. Call it the effects of a new era: the 2010 Census will bring about demographic revolution. Our prediction? Traditional stereotypes will be shattered as a new generation takes hold and the Hispanic household gets a makeover. 

Demographic Revolution: 

Hispanics will continue to accelerate as the largest minority in the United States. However, the growth is greater than what is demographically reported. Although, currently being reported to represent more than one in every eight Americans, Hispanics may truly represent more than what meets the statistic. 

When the 2010 census rolls out, it will include important changes. In previous years the Hispanic market has been referred to as “Hispanic or Latino”, now the market will be defined as “Hispanic, Latino or Spanish origin.” Also, in response to a very large percentage of Hispanics’ marking “Some other race”, the Census is considering removing this option all together. 

However the biggest change will be seen in how Hispanics are surveyed and reported: by ethnicity vs. race. The 2010 census will have changes that more clearly distinguish Hispanic as an ethnicity. Additionally, the federal government has mandated that “in data collection and presentation, federal agencies are required to use a minimum of two ethnicities: Hispanic and non-Hispanic.” 

So there you have it. “Hispanic” is an ethnicity, not a race. And for that matter, the only ethnicity required and considered by the U.S. Government to be worthy of segmentation. 

So then how does this change the way we compare and contrast segments? Currently, you see population segmentations including White, Hispanic, Black, Asian and other. After the 2010 census, data will accurately be sorted by Hispanic vs. non-Hispanic and/or Hispanic ethnic population divided by race. So when we truly look at the entire Hispanic market including all definitions of race (White-Hispanic, Black-Hispanic, Asian-Hispanic, etc.) the numbers may be greater than anticipated. 

Rise of a New Generation: 

As it has been reported and projected by many, the 2010 Census will confirm the rise of second generation Hispanics. Since the 1970’s, immigration has been the largest source of Hispanic population growth. However, as births in the U.S. continue to outpace immigration, Second Generation Hispanics will take over as the majority contributor of population growth. 

The Pew Hispanic Center predicts that in 2010 second generation Hispanics will account for 32 percent of the population and 56 percent of the overall Hispanic population growth. This fundamental change has important socio-economic and demographic data implications. 

With a low median age of 12.8 years old, second generation Hispanics will create future shifts in the composition of the market. The primary impact will be within the educational system as well as level of education obtained. Approximately one in seven students enrolling in U.S. schools is Hispanic. Education also has an impact on the face of the workforce and the average income earning potential. 

Also impacted is language. This becomes less of a question of capability and more of question of preference. As the second generation rises, the level of bilingual capabilities increases. While, the level of Hispanics who prefer to speak Spanish as a cultural connection holds strong. 

However, the second generation Hispanic reign will be short given their high fertility rates and the already substantial percentage their children represent. 

Household Makeover: 

Although the traditional married family remains the prominent household makeup, there are many shifts that are challenging traditional stereotypes. The Census predicts that by 2010, the average Hispanic household size will be 3.41 persons, compared to 2.56 nationally. 

One of the biggest changes is among Hispanic women. Although the divorce rate among Hispanics has increased, the majority of new single moms have never been married. This cultural metamorphosis began showing in 2007– the first year in U.S. history that more Hispanic babies were born to single women than to married. 

Another change is the definition of family. Households with 3 and more adults are more predominant in the Hispanic market, but they traditionally consisted of grandparents, parents and grandchildren. Now we will see that multiple adult homes are increasingly built on co-habitation of young singles, single moms or small families. 

The Census projects that by 2010 Hispanics will account for more than 48 million or 15 percent of the total U.S. population. But with the changes in specifying Hispanic as an ethnicity separate from race, that number could be greater. The challenge will lie in shifting how we see Hispanics within the overall population and breaking through traditional stereotypes to embrace the changing faces of today’s Hispanics. All will be proven April 1, 2010. In the meantime, we will keep looking forward and embracing the evolution of this dynamic market. 

By: Kelly Ravestijn

Sources: 
1. American Fact Finder United States Census Bureau. By Hispanic population and projections. 
2. United States Census Bureau; 2010 ACS note book 
3. Questions and Answers for Census 2000 Data on Race. United States Census Bureau 
4. Revisions to the Standards for the classification of Federal Data on Race and Ethnicity. Office of Management and Budget 
5. 2000 US Census Short Form. United States Census Bureau 
6. Overview of Race and Hispanic Origin: Census 2000 brief. United States Census 
7. The Rise of the Second Generation: Changing Patterns in Hispanic Population Growth. Pew Hispanic Center October 14, 2003 
8. The US Hispanic Economy in Transition: Second-Generation Wave, December 11, 2008. HispanicBusiness.com, 2008 
9. Race on the 2010 census: Hispanics and the shrinking white majority; January 1, 2005 
10. Cohabitation, Marriage, And Divorce. Data from the Center for Disease Control, 2002 
11. Unmarried Latinas’ rising birthrates are changing family dynamics. Iconoculture 2008 
12. Consumer outlook; Latina Moms 2008. Iconoculture 2008 
13. Mama Mia. Iconoculture 2008