How Latino businesses and entrepreneurs are driving the U.S. economy – Orange County Register
Irán Sanchez Salazar and Daisy Orosco pose in front of their coffee pop-up truck. The business and real-life partners founded their coffee brand Malcriada in 2022. (Courtesy of Malcriada)
For 27-year-old Irán Sanchez Salazar, being a Latino entrepreneur in Los Angeles is a source of great pride.
The Bell resident, who spent two years in Mexico waiting for his permanent residency papers to come through, used that time to hone his craft and pursue a career in specialty coffee. Now Sanchez Salazar co-owns a coffee brand called “Malcriada,” whose menu is inspired by Mexican and Chicano heritage and culture. In 2022, Sanchez Salazar and his girlfriend began making and selling the beans and blends at pop-ups in Southeast LA
“I think for me, as a Latin American company, it’s something that I take with me wherever I go,” Sanchez Salazar said. “It is very important for us. It’s part of our mission: to preserve the culture we inherited and also share it with other people.”
Sanchez Salazar is one of a growing number of Latin Americans pursuing entrepreneurial dreams — and whose demographic has become a key driver of U.S. economic growth. New reports released during Hispanic Heritage Month in mid-September and October show that Latinos in the U.S. are driving the economy – both as consumers and business owners. As older, non-Latino workers retire, research shows younger Latinos enter the workforce and contribute through private businesses, spending and tax revenue.
Latinos generate more than $800 billion in annual revenue through nearly 5 million Latino businesses across the country, according to a report released Oct. 12 by the U.S. Treasury Department and the Stanford Latino Entrepreneurship Initiative. There are over 62.5 million Latinos living in the U.S. — 19% of the U.S. population, the report said.
An annual study from the Center for the Study of Latino Health and Culture at UCLA Health and California Luthern University shows that total U.S. Latino economic output was $3.2 trillion in 2021 – an increase of 2.8 trillion US dollars in 2020 and 1.7 trillion US dollars in 2010.
The report also found that Latinos in the U.S. have the fifth-largest GDP — gross domestic product, a measure of the total value of goods and services — in the world, larger than that of India, France or the United Kingdom. This corresponds to growth of 7.1%. , adjusted for inflation, and exceeds the $3 trillion mark for the first time, researchers said. Researchers said the numbers are due to the rapid increase in Latino income.
California also had the largest Latin American economy in 2021 at $682 billion – followed by Texas and Florida, according to the Latino Donor Collaborative’s latest U.S. Latino GDP report, released in late September. With growing consumption and purchasing power, California’s Latino economy alone would be the 21st largest in the world, between Poland and Switzerland.
Despite economic challenges, business closures and high unemployment rates during the coronavirus pandemic, more Latin American entrepreneurs are starting their own businesses.
Research shows that nearly 25% of all new entrepreneurs in 2021 were Latino. Areas with higher percentages of Latino and Black residents saw large increases in business application rates in 2020. Additionally, from 2019 to 2022—during the pandemic and as businesses continued to recover—average weekly earnings for Latino workers rose 2.4%, explaining inflation. According to the Labor Department, the unemployment rate in this community also hit a record low of 3.8% last September.
Notable among the numbers: Younger Latinos are entering the workforce, spending money and starting businesses.
The Latino Donor Collaborative report emphasizes that this population is “significantly younger” than other groups. The majority are under 25, with the most common age range being 10 to 14, compared to 60 to 64 for non-Latinos.
A combination of “robust population growth, high labor force participation and increasing human capital will continue to drive the dynamic growth observed to date,” the report said.
More Latinos are also graduating — albeit at lower rates than their white counterparts — and getting jobs. “This influx of younger, working-age Latinos, along with economic progress, is making all the difference,” said Sol Trujillo, co-founder of the Latino Donor Collaborative.
“Latino GDP is growing every year simply because of age. It’s a young cohort. If one were to take all Anglo-Americans in the country aged zero to 100, the most populous age of this cohort would be 58 years. If you took all Latin Americans in the 0 to 100 category, the most populous age would be 11 years old,” he told Trujillo. “There are a million Latinos in the country who turn 18 every year…they now make up nearly 80% of the total workforce in our economy.”
With overall “youth, strong work ethic, deep family values, entrepreneurial spirit, healthy lifestyle and patriotism… Latinos are poised to power the U.S. economy into the mid-21st century and continue to be a source of economic strength and resilience that benefits all .” “said researchers of the 2023 U.S. Latino GDP report.
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Coffee connoisseur Sanchez Salazar was proud when he heard about Latinos’ growing GDP. He and his business partner hope to one day open their own Malcriada cafes in Southeast LA
“I think this information is good to see how much of this country we carry on our shoulders,” he said. “I like to think I’m one of those people who works really hard and does things without expecting it. For generations, we haven’t necessarily expected the best working conditions, the best benefits… Latinos are here to contribute. We are not free riders.”
Christopher Rivera, owner of Seis Solis Wine Co., sells wines wholesale in Orange, Santa Ana and throughout the region and dreams of opening a tasting room in Orange County. The Northern California native said wine grapes are grown in Lodi, but the coronavirus shutdown forced him to divert his business online.
The company’s name – Seis Soles, the “sixth sun” – is inspired by Aztec ancestry and tradition and respects traditional Mexican family values while encouraging new ideas. According to the website, it represents the growth of “the culture and values of a new generation.” Rivera’s business model supports representation and inclusivity, which he believes the wine industry needs to work on more. He hopes to create a brand “that Latinos can identify with” and share.
“I started (Seis Soles Wine Co.) because Latinos are growing in purchasing power, political power and representation, especially in California,” said Rivera, 38. “People always put us in a box and act like we’re one Monolith. You almost have a caricature of what a Latino or Mexican might be in California. Nowadays, our disposable income tends to increase as we are no longer only busy with manual tasks. We come into our own, learn new things and participate in the economy.”
After noticing a lack of inclusive children’s clothing to gift to her expectant uncles, LA-based Jessica Sosa-Cardenas co-founded a children’s clothing brand called PeaTree, which sells hand-sewn organic onesies and children’s clothing at pop-up markets and retailers around the world Region.
Now the small business, founded in 2019 by two second-generation Mexican sisters, carries a line of children’s clothing that represents Latinxness. PeaTree’s collections also celebrate LGBTQ+ parents and those with children through in vitro fertilization, surrogacy or adoption.
Sosa-Cardenas said PeaTree contributes to the community through local partnerships. She believes it is important to support other women of color and their businesses.
“Working on this brand that represents my culture is so great because it’s the double layer of not only being Latino but also being a woman and knowing that I’ve been able to achieve all of this. I want it to be an example of what real commitment and hard work can do,” said Sosa-Cardenas, 38. “The love for my family, the love for my culture, the love for our traditions is what it’s all about goes.”
Staff writer Allyson Vergara contributed to this report.
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