Report: Latinos are main contributors to Arizona’s growing labor force

Latinos are the main contributors to Arizona’s growing labor force, largely because they tend to be younger and have higher birth rates than the rest of the population, according to a new report.

But because Latinos tend to work in lower-paying jobs and, therefore, on average, earn lower wages than their peers, their economic output lags behind their share of the overall population, the report found.

The report produced by the Latino Donor Collaborative, a nonprofit research group, and Wells Fargo is intended to highlight the economic contributions of Latinos and underscore their potential to help fuel economic growth in the future through investments in education and training.

The report, presented during a symposium of business and community leaders Thursday at the Arizona Public Service headquarters in Phoenix, is also intended to reshape perceptions of Latinos, said Ana Valdez, president and CEO of the Latino Donor Collaborative.

The report “empowers Latinos, empowers who we really are, not just the perception, but the reality of who we are, which is that we are driving the economy. We are a gift to this country. We are the hardest working people,” Valdez told participants in a video address from Los Angeles.

What does the data say?

With nearly 1.05 million workers, Latinos make up about 33% of Arizona’s workforce. Between 2011 and 2021, Arizona’s workforce grew by 400,000 workers. Latinos made up 276,000 of the 400,000. That means Latinos represented 68.6% of the state’s overall workforce growth, the report said.

During that same period, Arizona’s labor force grew by 1.4% annually, the report said. But the Latino labor force grew more than twice as fast, at 3.1%, the report said.

“The main message here is that Latinos are a sizable fraction of the labor force, and they are contributing most of the growth in the labor force in the state,” said Jose Jurado, an ASU economist and co-author of the report with ASU economist Dennis Hoffman.

The reason is “Latinos tend to be much younger and have a higher birth rate than their peers, and that is allowing them to fill up positions in the labor force at a time where the population in the U.S. has become stagnant and the birth rate has decreased,” Jurado said.

‘A national economic tidal wave’

Latinos contribute $72.6 billion to Arizona’s economy, which means that about 17.3% of the state’s economic output is due to Latinos, the report said.

That 17.3%, however, lags behind the Latino share of the overall population, Jurado noted in an interview. Latinos make up about 33% of the state’s 7.4 million people.

That is because Latinos, on average, have lower annual incomes due to lower educational attainment, Jurado said.

Latinos also tend to have fewer assets that pay dividends or interest, he said.

“Closing this complex gap requires decisive public action, including narrowing the educational gap among members of this demographic. Even today, a college degree is associated with lifelong income increases,” Jurado said in an email.

The gap underscores the need to invest in Arizona’s Latino labor force to drive the state’s economy in the future, noted Jeffrey Guldner, president and CEO of Pinnacle West Capital Corp., which owns APS.

“What you see is this change in demographics really means investment we need to make to continue to drive our workforce to reflect the communities that we serve,” Guldner said during a panel discussion. “It’s a really important demographic that we need to pay attention to.”

The data shows that Arizona’s economy is being driven by the state’s growing Latino population, the increasing purchasing power of Latinos and the rising numbers of Latinos attaining education and training beyond high school, said Chris Camacho, president and CEO of the Greater Phoenix Economic Council.

Latinos, he said, represent “a national economic tidal wave.”

“My hope is that reports like this get embraced by the broader business and civic community,” Camacho said. “We are one of the states that has this really strong tailwind of really positive demographic change, and that is a small indicator of the broader U.S. picture.”

Reach the reporter at daniel.gonzalez@arizonarepublic.com.