The demographics of America are changing. The mass immigration of Latin Americans in the last few decades has grown exponentially, to the point that Hispanics now represent 17% of the total U.S. population. Although there is a perception that most of them come from Mexico or identify as white, it is important to understand that Hispanics and Latinos have ties and ancestries linked to different countries. This situation becomes problematic when Latinos are asked to specify their ethnicity and race, such as in the Mortgage Application Form or the U.S. census, which ask them questions that fail to reflect the heterogeneity of the Hispanic population. This situation puts into question the notion of race and the impact it has on the economy and GDP of the United States.

A recent study published by the Latino Donor Collaborative in June 2017 showed that Hispanics contributed $2.13 trillion to the U.S. economy in 2015.[1] If U.S. Hispanics were a nation, they would have the 7th largest economy in the world, ahead of countries such as India, Italy, Brazil, or Canada. The study also found that as the non-Latino workforce goes into retirement and more Latinos enter the work force, Latinos are projected to account for 24.4% of total U.S. GDP growth by 2020. The research was conducted using public data collected from the U.S. Department of Commerce and the U.S. Department of Labor. However, the problem with the report is that it assumes that Hispanics can be considered as a single block.

While the U.S. Census Bureau classifies Hispanic as an ethnicity, it is common to identify it as a race. So much so that in an article published by PEW Research Center in 2016[2], 67% percent of Latinos selected their race as Hispanic. Nonetheless, the same research also found that 24% identified as Afro-Latinos, most of whom come from Caribbean countries, and 34% answered that they were of mixed race.

The reasons for these varied answers might stem from how race is perceived in many Latin-American countries. A large portion of the population of the Dominican Republic identify themselves as “indio” (indigenous) even though they are mostly of African descent, whereas in Mexico most of the population is classified as “mestizo” (a mixture of European and indigenous people ancestry).[3] This plays into the narrative held in many Latin-American countries that most of their current population is the result of the process of mixture or “mestizaje” between Europeans, Native Americans, and Africans, which makes it difficult for U.S.-Latinos to identify as one particular race.

The complexity of the Hispanic ethnic/race classification raises some questions regarding the LCD report. Although Werner Schink and David Hayes-Bautista, the authors of the report, used statistics taken from the Bureau of Labor Statistics as of May 2017, it does not mention how they classify Latinos or whether they are considered to be a race or an ethnic group. Moreover, it would be interesting to know which group contributed most to the findings or the GDP. For example, the 2016 PEW article showed that Afro-Latinos tend to earn a lower income than their other Hispanics counterparts: less than $30,000 in 2013. If this data was not taken into consideration, then the Latino GDP contribution might be different from the one that was published.

What is more interesting is that the U.S. census is thinking about changing its questioning for the 2020 census by classifying Hispanic as race, then specifying ethnic origin[4]: e.g., whether the participant is Mexican, Ecuadorian, etc. The argument is that this will provide a more accurate picture of the Latino population. But it would still be problematic. What would happen with Latin American immigrants who have Chinese ancestry? Are they Latino, Asian, or Chinese? And that is without taking into consideration all the different ethnic groups and minorities found in Asia.

The truth is that the biggest problem is trying to over-generalize groups of people into a single category in an attempt to segment society and maintain the old social order of race differentiation[5].

As the U.S. moves towards a more diverse society, one in which interracial marriage becomes commonplace and where the majority of the population will be made up of different racial and ethnic groups, the concept of race becomes more and more irrelevant. Science has concluded that there is no biological evidence to consider the existence of different human races, other than the fact that a group located in a defined geographical area shares similar features.

Perhaps it is time to change the narrative and begin focusing more on the overall contributions of people as a society. While it is true that people have different ethnic backgrounds, it is the exchange among cultures that has strengthened America as a nation.

Eric Lawrence Frazier, MBA
President and CEO
NMLS #461807  CalBRE #01143484

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