Helping the Young
In many situations, policies that help young households gain skills and good jobs will also benefit minorities, he said. Millennials, the cohort of young Americans born after 1980, are the most diverse group in U.S. history, according to Pew. Also, the projected enrollment of racial and ethnic minorities in U.S. public schools this school year outnumbered white students for the first time, according to figures from the National Center for Education Statistics.“It’s a good thing that we’ve got lots of young people who want to work, and compared to many other countries, we’re in good shape,” Mather said. “But in terms of the opportunities for these young people, especially in the wake of the recession, that’s what really needs to be addressed.”
Jasmin Figueroa, pictured with her family. A senior scientist at Johnson & Johnson,... Read More
The 26-year-old represents the economic potential that could be unleashed as the U.S. transitions into a majority-minority nation over the next 30 years. At a time when
countries such as Japan and Germany struggle to deal with aging populations, increased heterogeneity in the U.S. bolsters the outlook for its labor market and growth.
“It’s completely beneficial for the country to morph into that type of environment -- it just makes everything a little bit richer,” said Figueroa, who lives in Franklin Park, New Jersey, about 42 miles (68 kilometers) southwest of New York City. She credits her success with values instilled by her father, a New Yorker of Puerto Rican descent, and her mother, who was born in Guyana.
The unfolding population transition means it’s increasingly important to ensure that minorities, who lag whites in metrics from high school graduation to household wealth, have the skills needed to succeed, according to researchers such as William Frey, a demographer at the Brookings Institution in Washington. Failure would leave the U.S. in a precarious position, he says.
The buying power of minorities continues to climb
Majority Minority
Using the latest projections from the Census Bureau issued in December, Frey calculates that whites will make up 49.7 percent of the U.S. population in 2044, down from 63 percent in 2013. Hispanics will make up 25.1 percent, up from 17.1 percent two years ago, while the shares of Asian and multiracial U.S. residents will also climb. Blacks, who will make up 12.7 percent of the population in 2044, represent the only decline, falling from 13.2 percent in 2013.In some facets of American life, the shift will be reached even sooner, said Valerie Wilson, director of the program on race, ethnicity and the economy at the Economic Policy Institute in Washington. Looking specifically at the working class, which she defines as Americans without a bachelor’s degree, the majority-minority transition will occur in 2032, she said.
Buying power is growing the fastest among multiracial and Hispanic U.S. residents
Retiring Whites
Almost 85 percent of Americans age 65 and older identified themselves as white in the 2010 Census, meaning many of the jobs freed up by their retirement will need to be filled by the growing number of younger minority workers.“We have to make sure that population is prepared and trained to fill those positions,” Wilson said.
Just as minorities will in time make up the bulk of the American workforce, they’ll also comprise most consumers, said Paul Taylor, a senior fellow at the Pew Research Center in Washington. With household spending accounting for almost 70 percent of the economy, the way minorities consume will become increasingly important to track, he said.
The combined buying power of racial minorities -- blacks, American Indians, Asians and multiracials -- in the U.S. is forecast to rise 28 percent to $2.8 trillion by 2019, according to the Selig Center for Economic Growth at the University of Georgia in Athens. The purchasing power of Hispanics, who are considered an ethnic rather than a racial group, is projected to soar 32 percent to $1.7 trillion.
Purchasing Power
While those totals are dwarfed by the economic clout of white households, whose purchasing power is expected to reach $12.9 trillion in 2019, that will represent just a 20 percent increase from last year.Companies would do well to take heed, said Jeffrey Humphreys, the director of the Selig Center.
“A lot of companies look overseas for fast-paced growth, but there is fast-paced growth right here in our own backyard and it’s in these minority consumer markets,” Humphreys said. “Because these different groups spend their dollars differently, a tailored message or product makes sense for many businesses.”
For example, black Americans tend to spend more on children’s clothes, groceries and utilities and less on new cars, alcohol and health care, according to Humphreys, who used the Labor Department’s consumer expenditure survey for data on racial groups’ outlays. Hispanics devote more to dining out and phone services, and less to entertainment, education and personal insurance.
Immigration Laws
Credit for the diversity boom in the U.S. should go to the Immigration Act of 1965, said Pew’s Taylor. The legislation removed national origin quotas that had formed U.S. policy since the 1920s and replaced them with a system that took into account immigrants’ skills and family relationships with U.S. residents.President Barack Obama is expected to lay out a proposal for rewriting immigration laws in his State of the Union address Tuesday. He will propose new taxes on the wealthiest Americans to fund expanded tax credits for higher education and child care and create a new break for two-earner couples. He’s also seeking an expanded tax credit for lower-income workers to make community college free.
More Schooling
In order for the population shift to work in the U.S.’s favor, initiatives should be implemented that help address the disparities in the well-being between races, Brookings’ Frey said. That means increasing investment in schools and creating a stronger bridge between the classroom and the workforce for minorities.Some 76 percent of Hispanics and 68 percent of blacks graduated high school on time with a regular diploma in the 2011-2012 school year, according to the National Center for Education Statistics. That compares with 85 percent of whites.
Meanwhile poverty rates for blacks and Hispanics were much higher than that of whites’ last year, data from the U.S. Census Bureau shows. Median income for blacks and Latinos trailed non-Hispanic whites by at least 30 percent.
“What’s been most striking for me is the fact that Latinos have been one of the fastest growing groups, and at the same time, they’re at or near the bottom of the income distribution,” said Mark Mather, a demographer at the Population Reference Bureau in Washington. “You could see the overall poverty rate in the U.S. increase simply because you have this large and growing group at the bottom.”
Helping the Young
In many situations, policies that help young households gain skills and good jobs will also benefit minorities, he said. Millennials, the cohort of young Americans born after 1980, are the most diverse group in U.S. history, according to Pew. Also, the projected enrollment of racial and ethnic minorities in U.S. public schools this school year outnumbered white students for the first time, according to figures from the National Center for Education Statistics.“It’s a good thing that we’ve got lots of young people who want to work, and compared to many other countries, we’re in good shape,” Mather said. “But in terms of the opportunities for these young people, especially in the wake of the recession, that’s what really needs to be addressed.”
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