Hispanic Entrepreneurs Are Beating Expectations and Bolstering the U.S. Economy
This point obviously seems to be missed in our current political debate. And the conclusions here are driven by numbers and data, not rhetoric. Hispanic entrepreneurship helps drive our economic growth.
The Partnership for a New American Economy and the Latino Donor Collaborative’s 2014 report, “Better Business: How Hispanic Entrepreneurs Are Beating Expectations and Bolstering the U.S. Economy,” shows how the number of Hispanic entrepreneurs in America has grown exponentially over the past two decades, powering the economy during the recent recession. Hispanic immigrants in particular are now more likely to be entrepreneurs than the average member of the U.S. population overall.
Key findings of the report include:
- In recent decades, the number of Hispanic entrepreneurs has grown exponentially. From 1990 to 2012, the number of Hispanic entrepreneurs in America more than tripled, going from 577,000 to more than 2.0 million. This surge far outstripped population growth among the working-age Hispanic American population. It also dwarfed the growth in the number of self-employed non-Hispanics during that period, which grew by just 14.0 percent—roughly one eighteenth as fast as the Hispanic rate.
- Hispanic immigrants, particularly those from Mexico, played a key role in this growth. Between 1990 and 2012, the number of Hispanic immigrant entrepreneurs more than quadrupled, going from 321,000 to 1.4 million. At the same time, the number of self-employed Mexican immigrants grew by a factor of 5.4, reaching 765,000. Entrepreneurship became so established among Mexican immigrants that by 2012 more than one in 10 such immigrants was an entrepreneur.
- There are far more Hispanic entrepreneurs today than expected. In 2012 the rate of Hispanic-American entrepreneurship was more than one whole percentage point higher than we would expect based on factors like population growth, language proficiency, and family structure. Hispanic immigrants overcame obstacles that hinder entrepreneurship at even greater rates: Among that population, the entrepreneurship rate was 2.1 percentage points higher than expected, resulting in an estimated 251,000 additional entrepreneurs in 2012.
- Hispanic entrepreneurs helped power the economy during the recent recession. While entrepreneurship rates among non-Hispanic, U.S.-born individuals dropped during the decade that included the recent recession, the number of Hispanic entrepreneurs grew by 71.5 percent. That made a notable difference on the U.S. unemployment rate: If the 581,000 Hispanic immigrant entrepreneurs who created businesses from 2000 to 2010 were instead unemployed in 2010, the unemployment rate would have been 0.4 percentage points higher, topping 10 percent.
- As entrepreneurship levels have dropped in recent years, Hispanics have increasingly focused on founding new businesses. In 2012, the rate of self-employment dropped to its lowest point in decades, reaching 10.0 percent. But from 2010 to 2012, the number of Hispanic entrepreneurs grew by 160,000 people. For the entire 1990 to 2012 period, Hispanics added new entrepreneurs almost 10 times faster than the population overall.
- Hispanic immigrants now have higher entrepreneurship rates than the U.S. population overall. While 10.2 percent of the U.S. population was entrepreneurs in 2010, 11.0 percent of Hispanic immigrants were. By 2012, that gap had widened to 10.0 percent and 11.7 percent, respectively.
You can download a copy of the full report on the Partnership for a New American Economy website at Report: “Better Business: How Hispanic Entrepreneurs Are Beating Expectations and Bolstering the U.S. Economy,”
While I have seen similar numbers before, I expect this will provide new insights for many, and also reinforce the point that numbers and data, rather than rhetoric, should drive our conclusions.
Paul B. Silverman