What Trump gets wrong about Hispanics in the U.S.

Toyota's Lexus luxury line is among the brands marketing toward Latinos, who injected $1.4 trillion into the U.S. economy in 2016, according to a new report (VidaLexus Presents: RPM – Reengineering Popular Music with Raquel Sofía)

By Tracy Jan
Washington Post

President Trump, as he ran for office, portrayed Latino immigrants as a drain on the U.S. economy, saying "The Mexican government ... they send the bad ones over because they don't want to pay for them."

But Trump’s campaign rhetoric ignored this fact: The growing Latino population injected $1.4 trillion into the U.S. economy in 2016, according to a new report by the Selig Center for Economic Growth. That’s larger than the GDP of Mexico.

The rapid growth of Hispanic buying power in the U.S. is not a result of population growth alone. Per capita, the buying power of Hispanics in the country has jumped from $13,880 each in 2000 to more than $24,050 each in 2016 -- accounting for every man, woman and child.

Upper-income Hispanics are fueling much of that spending power as the proportion of wealthy Hispanic households in the U.S. expands. Those making more than $100,000 a year accounted for nearly 16 percent of all Hispanic households in 2015, double the percentage in 2004, according to the Pew Research Center. More than half of those households reside in California, Florida, New York and Texas.

Corporations have taken note. Industries from real estate and banking to luxury automakers and prestige cosmetics are expanding their marketing towards this rapidly growing demographic.

“There’s definitely money, and growing money, in this segment so you absolutely cannot ignore it,” said Brian Bolain, general manager for Lexus marketing.

[Trump to order building of border wall, crackdown on sanctuary cities]

Toyota, the No. 1 auto brand among Hispanic consumers for the past decade, has created a corporate department specifically targeting Hispanics for its various vehicle divisions, including its Lexus luxury line.

As a result, Lexus is now the top selling luxury automobile brand to Hispanics, said Sara Hasson, senior vice president in Univision’s strategy and insights group who works with auto manufacturers and dealers. Other elite brands such as Audi, Mercedes and BMW are also investing millions each year in Spanish-language advertising, with luxury auto ads on Spanish television and radio tripling since 2013, Hasson said.

One ad introducing the 2017 Lexus IS line, the brand’s entry-level sedan, features a car speeding through city streets spliced with scenes from a soccer match. A male voice-over says in Spanish, “No cheerleaders. No mascots. No halftime show. All thrills. Exhilarating performance in its purest form.”

Hispanics accounted for a quarter of Lexus IS sales in 2016. But Lexus markets a half a dozen cars at higher price points each year to Hispanics, through not only traditional ads but also music videos starring Latin musicians, short programs featuring Latin chefs and athletes, live concerts, and events inviting consumers to test drive various models around a track.

“One of the things we feel that’s key to their success is they are not making an assumption that you could only afford the entry-level vehicle,” Hasson said.

Companies especially strive to build brand loyalty early among wealthy Latinos because they tend to be younger and have larger families than the non-Hispanic upscale consumer. And while the majority of the target audience is bicultural and fluent in both English and Spanish, marketers say it’s still important to create Spanish-language ads that appeal to multi-generational Hispanic families.

“Parents and grandparents, you have to address the whole family,” Bolain said. “People who have a voice and a vote in that ecosystem.”

[The group that seriously out-earns white men]

While affluent Hispanic households tended to be Cuban American or South American two decades ago, there is growing affluence among Mexican Americans, Puerto Ricans and Dominicans, said Gabriela Alcantara-Diaz, who owns her own advertising firm in Miami and who sits on the board of the national trade group AHAA: The Voice of Hispanic Marketing. The trade group, in partnership with Nielsen, a global information and measurement company, has identified Latinos earning $50,000 to $100,000 annually as one of the most influential consumer segments since the baby boomers.  

Hispanic wealth is also expanding beyond the traditional urban centers in Miami, New York and Los Angeles to secondary markets such as San Bernardino, Calif., and Jacksonville, Fla., Alcantara-Diaz said.

“There have been a lot of regional players more aggressive in pursuing the emerging upscale Hispanics” than national opportunities, said Alcantara-Diaz, whose firm began focusing on this demographic while working with Johnnie Walker whiskey and Publix supermarkets two decades ago. “We knew it was just a matter of time before this market would influence national trends.”

Hispanics have become key drivers of homeownership growth in the U.S., accounting for 69 percent of total net growth, according to a 2016 report by the Hispanic Wealth Project. They tend to accumulate wealth through real estate and small businesses but underperform in other assets like the stock market and retirements accounts.

“Hispanics are earning more money but not making up ground on the wealth side,” said Gary Acosta, chief executive of the National Association of Hispanic Real Estate Professionals, who created the Hispanic Wealth Project with the goal of tripling Hispanic household wealth by 2024.

[Hispanics are doing really well. And so is Donald Trump.]

Wells Fargo expanded its Hispanic sales force by 15 percent last year in hopes that more diverse loan officers and home mortgage consultants would better cater to its growing Latino clientele, said Brad Blackwell, an executive vice president with Wells Fargo Home Mortgage.

The bank is also opening new mortgage offices in branches that serve large Latino populations in Los Angeles, Dallas, Houston and Phoenix. And it has made a commitment, in collaboration with the Hispanic Wealth Project, to lend $125 billion to Hispanic homebuyers by 2025 and invest $10 million from the bank’s foundation to educate and counsel Hispanic homebuyers.  

(Wells Fargo’s commitment follows a $175 million settlement in a lawsuit alleging that the bank discriminated against Hispanic and African American borrowers.)

In contrast to the many other companies pursuing wealthy Latino consumers, Sotheby’s International Realty, which focuses on high-end properties, does not specifically tailor its marketing toward Hispanics, let alone advertise in Spanish.

In Miami, where Sotheby’s average property sale price tops well over $1 million, Latino agents make up about a third of the real estate agents. But the nuances of language and cultural differentiation tend to disappear, said Michael Valdes, a global vice president at Sotheby's and the company’s highest ranking Latino.

What would Reagan do? Immigration reform is the most Republican of causes.

 

By Frank Keating

November 11, 2013

LA TImes

 

Like many Republicans — what's more, like many Americans — I regard Ronald Reagan as my political hero and inspiration. For conservatives who came of age in the 1960s and '70s, President Reagan offered a principled and compassionate argument for individual freedom and an equally compelling case for personal responsibility.

In 1989, Reagan described his view of America "as a tall, proud city built on rocks stronger than oceans, wind-swept, God-blessed and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here."

Unfortunately, too many conservatives — though they aspire to walk in Reagan's footsteps — have forgotten that immigration reform is the most Republican of causes. We cannot support open borders for trade but not for people. We cannot support the unfettered exchange of goods and ideas while building razor-wired walls that separate children from their parents. We cannot make America stronger and more prosperous by excluding tomorrow's talent and industry.

From my perspective as a Reagan Republican — indeed, as a senior official in the Reagan administration during the last major immigration reform process — I am convinced that we stand on the precipice of opportunity.

In numbers that we haven't seen since the early 20th century, immigrants have been coming here to work and to build a better future for their families. Just as immigrants helped fuel the engine of America's emerging industrial economy 100 years ago, today they are filling two critical job gaps: high-skilled professions in science, technology and advanced manufacturing, and low-skill service and industrial jobs in fast-growing regions. We need immigrants of all skill levels to help build the 21st century economy.

Offering opportunities to new Americans doesn't take jobs from citizens. The economy is not zero-sum. It's dynamic, and bringing new talent to American jobs will enlarge the economy for everyone. In June, a Congressional Budget Office report estimated that the Senate's bipartisan immigration reform bill would boost economic growth by 5.4% after 20 years and reduce the deficit by $900 billion over that period.
Immigration would also help address a critical long-term gap in funding for America's two signature entitlement programs: Social Security and Medicare.

In 1950, there were about 16 workers for every retiree. Today, there are only about three. But according to Social Security's chief actuary, immigrants, who tend to come to the United States at the start of their careers, would enrich the Social Security trust fund by $500 billion over the next 25 years, and by an impressive $4 trillion by the end of the century. That's a game-changer.

These numbers underscore an important point. Immigrants are coming here to work, not to become dependent on the state. People don't make perilous journeys and risk their life savings and sometimes their lives for the goal of getting a welfare check, a food-stamp card or a housing voucher. And welfare reform has made America even less attractive for those who would go on the dole.

But the considerable economic benefits aren't the main reason we should reform immigration. America was the world's first nation to be based on principles, not ethnicity. Citizenship is at once narrow and broad — available to those who share our principles, regardless of race or national origin. It is unconscionable to leave a class of neighbors who share our values in perpetual second-class status.

The promise of citizenship has always drawn pioneers who have made America the strong country it is today. Immigration reform fulfills the promise of the American dream for new generations who will make our country even stronger.

The Senate bill also protects the rule of law by securing the border and ensuring that only law-abiding immigrants receive legal status. Border security is the indispensable lintel that shoulders the load. Without it, the entire structure would be in jeopardy. President Obama can help calm concerns by pledging not to use delays or waivers to weaken the bill.

Future Americans with will, resolve and heart are waiting. As Ronald Reagan might have put it, it's time to open the doors.

Frank Keating, a former Republican governor of Oklahoma, is president and chief executive of the American Bankers Assn.

Copyright © 2013, Los Angeles Times