“I am so proud of the Latino community and especially entrepreneurs who are creating new businesses and adding additional jobs in our communities,” Tony Yapias, director of Proyecto Latino de Utah and small business owner. “Entrepreneurs are a key driver of our economy. Latinos by nature are true entrepreneurs and given an opportunity for immigration reform they would do a lot more for this country and economy.”
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.
This report was prepared for the Partnership for a New American Economy and the Latino Donors Collaborative by Marie T. Mora, Ph.D. and Alberto Dávila, Ph.D of the University of Texas – Pan American.
Click this link at http://pnae.us/betterbusiness to see the full report, “How Hispanic Entrepreneurs Are Beating Expectations and Bolstering the U.S. Economy.”
This event and report are part of the #iBuildImmigration campaign that brings business leaders across America together with the Partnership for a New American Economy to tell Washington that we need immigration reform now.
About the Partnership for a New American Economy
The Partnership for a New American Economy brings together more than 500 Republican, Democratic and Independent mayors and business leaders who support immigration reforms that will help create jobs for Americans today. The Partnership’s members include mayors of more than 35 million people nationwide and business leaders of companies that generate more than $1.5 trillion and employ more than 4 million people across all sectors of the economy, from Agriculture to Aerospace, Hospitality to High Tech and Media to Manufacturing. Partnership members understand that immigration is essential to maintaining the productive, diverse and flexible workforce that America needs to ensure prosperity over the coming generations. Learn more at www.RenewOurEconomy.org.