The Expert: The Emerging Minority Majority

As new demographic estimates become available, I make it a practice to review the similarities and differences between the new numbers and last year’s estimates. This time around, the significance that the role ethnic households will play in future growth struck me, specifically the Hispanic segment.As we all know, immigration has driven and will continue to drive the nation’s population growth. No single group has boosted growth more than the Hispanics segment. In 1990, the Hispanic population in the United States was 7.9 percent. Today, Nielsen Claritas estimates, Hispanics account for 15.5 percent. And if the segment continues to grow at a rate three times faster than the U.S. population in general, as a recent Goldman Sachs study suggests, investors must pay attention to this emerging group. To reinforce the importance of Hispanics, demographers at the Pew Research Center recently predicted that the United States will be a “minority majority” nation by 2050, Hispanics making up as much as 29 percent of the total population.Ethnic shifts have already occurred in traditional gateway cities like Los Angeles, San Antonio and El Paso, Texas—border towns and booming coastal metros. While New York and Chicago served as magnets for newcomers at the turn of the 20th century, today’s immigrants from Latin America and Mexico typically head to Los Angeles, San Francisco, Miami and Atlanta. They settle in these places for the same reasons that earlier waves of Europeans landed where they did: Friends and family members had already formed self-sustaining ethnic communities. This is particularly true of less skilled immigrants who rely on kinship and informal networks to find work. They’re also attracted to areas whose climates are conducive to outdoor recreational activities and low costs of living. Not surprisingly, those markets with the highest proportion of Hispanics tend to sit along or near the Mexican border.So I encourage serious investors to pay attention to the Hispanic market and its impact on the American landscape. If current trends hold true, no single segment may play a more important role in driving future growth and shifts in consumer trends.Terry Munoz is vice president & industry practice leader for Nielsen Claritas.