Latino GDP soared in California

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California has a third of Japan’s population (39.4 million vs. 122.8 million), but its gross domestic product is greater than Japan’s. If California were an independent state, it would have the fourth largest economy in the world; Japan will be fifth.

What is the secret of California’s GDP? In three words: Latin GDP growth.

Gross domestic product measures the final value of the goods and services a country produces. It describes the size and productivity of an economy.

In California, 15.1 million Latinos in the state generated more than a billion dollars of economic activity in 2023, Hispanic GDP grew more than twice as fast as the state’s non-Hispanic GDP (before, during, and after COVID-19), as the Hispanic labor force grew 15 times faster than the non-Hispanic labor force.

He also works more. Following a trend for decades, in 2023 Latin American labor force participation is 5.5 percentage points higher than that of non-Latinos. Additionally, Hispanics are more likely to work in the private sector than non-Hispanics.

With more people working harder and in the private sector, Latinos’ vigorous work ethic lifted California’s economy above Japan’s.

the latinos they are too more entrepreneurs than non-Hispanic demographics, creating and expanding businesses at a faster rate. While one might assume that these companies would focus on construction and agriculture, in 2023 the largest sectors of California’s Hispanic GDP are finance, insurance, business services and real estate.

One of the most important and fastest growing economic sectors is healthcare. Interestingly, for 175 years, California has performed poorly in training Latino health professionals, such as doctors dentists, nurses, etc. How did health care become an important sector of California’s Latino GDP when traditional providers avoided Latino areas?

A new type of health organization has emerged in Latino communities to fill the service gap: community clinics run by community boards focused on preventive services and health promotion for underserved areas.

An example is AltaMed. What was once a community clinic in Los Angeles has become one of the largest federally certified health centers in the country.

Founded in 1969, at the height of the Chicano movement, the Free Clinic of the East Side of Los Angeles began as an all-volunteer organization that supported itself each month through irregular donations of supplies. By 1977, with an operating budget of $50,000, it could barely support two employees.

The small organization suddenly took off financially. AltaMed now It serves more than 700,000 patients annually

in more than 60 centers. It employs more than 5,700 people — at competitive salaries — and has a 2024 operating budget of $1.64 billion.

But the growth doesn’t end there. AltaMed employees spend their paychecks at local stores and restaurants, driving growth in those sectors. AltaMed, a not-for-profit company, contracts with local providers and service providers. Expanding its presence, it hires architects and construction companies.

AltaMed today has a direct and indirect economic impact of $15.1 billion.

In the last decades of the 20th century, by 2024, California’s Hispanic population had grown from 1.4 million to 15.1 million. This population growth is fueling labor force growth, business growth and Latino GDP growth twice as fast as the rest of the state.

If it weren’t for Latin American GDP, California wouldn’t be the fourth largest country in the world. It will be the eighth, close to Italy. California would be much poorer and less competitive without the work ethic and entrepreneurial spirit of Latinos.