Hispanics and Macroeconomics
31 Oct 2006|Miguel Winebrenner
I haven’t really applied my studies in economics to Hispanic marketing consulting too much, but here’s a quick story of how this changed last week:
On Friday I was invited to speak at a CIMA (Chicago Interactive Marketing Association) event called “LunchByte.” These events are hosted by CIMA a few times per year and their purpose is to bring together members (mainly online marketers) and share knowledge that could be used for progress/innovation. This “LunchByte” was hosted by Univision.com and my piece, along with Rick Marroquin’s from McDonald’s, was aimed at educating CIMA members about the opportunities- particularly interactive ones- that abound in the Hispanic market. The focus of my presentation was on Hispanic Teens and their contributions to the evolution of the Hispanic market landscape. However, it was a slightly different angle that caught the attention of the 100 or so people there, and one slide in particular that generated most audience questions- the slide about expenditures (of all people, not only Hispanics) in the United States over the course of their lifetime, and the role Hispanics play in this story.
The graph, which I will give credit to Dr. Harry Pachon for finding and presenting at the Hispanic Gaming Summit a few months ago, tells the story that as age increases, so do expenditures. Not too surprising- wage increases, promotions, savings, less debt, pensions, etc. all contribute to this overall trend. In fact, the pinnacle of lifetime expenditures, according to this graph, is at about 60 years of age. At this age many people are enjoying years of compounded savings, they may be at the nirvana of their careers, and their kids may be going off to college. So many of these 60-somethings are buying a second home, or a fancier car- a boat perhaps- and their kids are sending tuition bills. The effects of this to the U.S. economy are enormous—literally, economic growth depends on this age bracket’s expenditures.
However, there is a big problem- the U.S. population as a whole is getting older on average. In other words, the “pot” of younger people that will make their way up to this nirvana state of expenditures is shrinking. And, some predict, the moment when this trend will start to move the macroeconomic needle is soon (about 15-20 years). So, assuming that this is true and that the economy will depend on the younger generation of this country more than ever, the time to pay close attention and put dollars against the Hispanic market has never been more critical. Hispanics are 10 years younger on average than the general market; they are the largest and fastest growing segment; they are having more kids; 1 in 5 teens are Hispanic; etc, etc, etc.
So without getting into much more detail, based on this experience last week, I am enthused about using this story as a way to encourage companies to place the Hispanic market as a higher priority in their overall strategic vision.
To see the graph on lifetime expenditures visit www.census.govprev next