California's Latino Economy Surges, Driving State Growth

Latinos are credited with playing a crucial role in California's economic vitality, according to David Hayes-Bautista, co-founder of the research initiative and a distinguished professor of medicine at UCLA. In 2024, Latinos were 5.1 percentage points more likely to be actively working compared to their non-Latino counterparts, indicating a strong labor force participation.

The report indicated that the Latino GDP now constitutes nearly a quarter of the total U.S. Latino GDP. Additionally, if the Latino GDP were treated as a separate economy, it would rank as the sixth largest in the U.S., surpassing Pennsylvania and even some national economies. Dan Hamilton, a professor of quantitative economics at Cal Lutheran, observed that at $1.07 trillion, it sits between Switzerland’s and Saudi Arabia’s economies.

Despite a decline in California's non-Latino population over five of the past six years, the Latino population has shown positive growth. Latinos, making up only 41% of the state's population, have accounted for 95% of California's overall population increase since 2010. In 2024, the Latino labor force participation rate reached 67%, marking an all-time high.

California's economy had previously outpaced the nation's growth by 57% from 1997 to 2019. However, since the pandemic, the state's GDP growth has lagged behind the national average, with a slowdown of 12.7% between 2019 and 2024. Despite this, California's economy experienced a modest growth rate in 2024, mainly attributed to the contributions of the Latino workforce. Hayes-Bautista noted that the return to growth is entirely linked to Latinos.

The report warns that ongoing deportation efforts targeting Latinos could undermine both California's and national economic growth. Researchers stress that directing investments toward Latinos, including enhanced access to education and healthcare, is essential for maintaining the positive economic impact of this demographic.

Additional insights from the study reveal that California Latinos represent a $783 billion consumption market in 2024, surpassing the economies of 37 individual states. Furthermore, the number of Latinos with bachelor's degrees or higher is increasing at a rate 3.5 times greater than that of highly educated non-Latinos. From 2010 to 2024, Latino homeownership in California rose by 26.3%, while non-Latino homeownership increased by less than 1%. Despite their lower population percentage, Latinos accounted for 89% of the state’s growth in homeownership.