By Ret Boney
North Carolina’s Hispanic population is surging and so is its impact on the state’s economy, a new study says.
The state’s Hispanic population totaled 600,913 in 2004, or 7 percent of the state’s population, and contributed more than $9 billion to the state’s economy in 2004, says the study by researchers at the University of North Carolina at Chapel Hill.
If current trends continue, the study says, the economic impact of Hispanics in the state could double over the next four years to $18 billion.
Commissioned by the North Carolina Bankers Association and the Mexican Consulate of Raleigh, “The Economic Impact of the Hispanic Population on the State of North Carolina” was conducted by the Frank Hawkins Kenan Institute for Public Enterprise at the Kenan-Flagler Business School at UNC-CH.
“Hispanics have a major, major impact on this state and its business revenues,” says Jim Johnson, director of the Kenan Institute’s Urban Investment Strategies Center and co-author of the report.
That economic impact generated almost 90,000 new jobs in the state and about $455 million in state and local taxes, the study says.
The total cost of Hispanics to the state for services including health care, education and corrections, less the taxes they pay, totals about $61 million, or about $102 per person.
More than a quarter of the state’s population growth from 1990 to 2004 was driven by the Hispanic population, the study says, and Hispanics fill one in three new jobs created in the state over the past decade.
The combined net income of the Hispanic population in 2004 was about $8.4 billion, 80 percent of which was spent in ways that benefit local economies and 20 percent of which was saved, spent on interest payments, or sent to families outside the U.S.
In some areas of North Carolina, particularly rural areas, products and services Hispanics wish to purchase are not available, which leads them to spend money outside their local community, a phenomenon economists call “leakage.”
To keep Hispanic spending at home, the study says, businesses should develop products and services specifically for the Hispanic market.
As of 2002, North Carolina had more than 9,000 Hispanic-owned businesses that generated a total of $1.8 billion in revenue.
Researchers suggest the state develop policies and procedures to remove barriers for potential Hispanic entrepreneurs in an effort to spark new business development.