Today, President-elect Donald Trump is on the verge of making history too. With 16 cabinet-level officials and more than two dozen administration appointments announced, he is on track to appoint the first cabinet without a Latino in more than 28 years. For a president-elect who ran on restoring economic growth, ignoring U.S. Latinos makes little sense. Latinos are driving American economic growth, and they are at the core of what I call America’s New Mainstream Economy.
I encourage Mr. Trump and his advisers to read a new report by economist Jeffrey Eisenach, “Making America Rich Again: The Latino Effect on Economic Growth.” The study shatters myths associated with the U.S. Latino community and documents a growing segment of the U.S. population that is better educated, more employed, more entrepreneurial and more engaged than many understand.
Most Americans know that the Latino population in the U.S. is growing fast, but what is less understood is that it has become a major source of entrepreneurs. Latino youth—the workforce of the future—are graduating at higher rates and are more connected online than other segments of the population. The overwhelming majority speak English and were born in the U.S.
Consider these findings in Mr. Eisenach’s study:
• Latinos are driving new business creation. The number of Latino-owned business grew 46% from 2007 to 2012, compared with a decline of more than 2% for non-Latino businesses. There are now more than four million Latino-owned business in the U.S. If not for Latinos, the U.S. would have fewer businesses today than it did in 2007.
• Those businesses are hiring. Head count in Latino-owned businesses increased 22% from 2007 to 2012, against a 2% drop in hiring over the same period for non-Latino businesses.
• Latino incomes are rising fast. Latinos were responsible for 29% of real income growth in the U.S. from 2005 to 2015, with the number of Latino households earning incomes of more than $150,000 growing 194%.
Those numbers are real, and they are unambiguous. Latinos are driving job growth, income growth and new business formation. According to Mr. Eisenach’s report, if U.S. Latino consumers were a country, they would represent the world’s 14th largest economy and that economy would be growing faster than India’s or China’s. That is one important part of the New Mainstream Economy story.
The story gets even better. Today with more than 56 million living in the U.S., Latinos comprise some 17% of the nation’s population. But the median age for Latinos is 28 years old—nine years younger than the overall U.S. population—and Latinos are increasingly well-educated. The share of Latino high-school seniors enrolling in college immediately following graduation jumped 20 percentage points in the 12 years from 2000 to 2012—to 69% from 49%. This now outpaces enrollment rates of white (67%) and black (63%) non-Hispanic high school graduates.
Latinos are also early adopters of that other great driver of U.S. economic growth—technology. Latinos are more likely to use cellphones and smartphones than the general population, just as they are more likely to use online shopping tools and be early adopters of new technology. Latino-driven economic growth is a reality today that will be even more powerful tomorrow.
I am a lifelong businessman. I have run global, large-cap companies, and I have run startups. In all those roles, my instinct has been to look for growth opportunities and to seize them. The New Mainstream Economy represents America’s growth opportunity—and the Latino community is at its core.
The Trump administration must understand this economic reality if it is going to succeed in restoring the kind of growth that will bring prosperity to all Americans. Less regulation and lower taxes are effective recipes for a stronger growth climate for U.S. corporations and for small- and medium-size businesses. Improved access to capital for small- and medium-size businesses is also paramount. Diversity of experience and perspective is always a strength both for a business and for a nation-state.
Those who have been appointed or who will be nominated should seek advice, counsel and information regarding this New Mainstream Economy from those who live it. There are many influential, experienced and knowledgeable Latinos who can offer such advice.
The president-elect prides himself on being a winner and a builder. If he wants to build a winning economy, he cannot simply replicate successful pro-business strategies of the past. He must boost the powerful engines of today’s New Mainstream Economy—a task that requires tapping the expertise of the Latino community.
Mr. Trujillo is chairman of Trujillo Group Investments and former CEO of U.S. West, Orange and Telstra.