News Column

A Bicultural Bias

December 2003, HISPANIC BUSINESS Magazine

Abel Ramírez Magaña

A recent study by the Pew Hispanic Center (PHC) projects that over the next 20 years, second-generation Hispanic births in the United States will outpace the rate of Hispanic immigration. That demographic shift has profound implications for the future of the nation's largest ethnic group and forces academics and marketers to re-evaluate long-held conventions about the market.

"We're all used to the idea that the growth of the Latino population is one of the key demographic events of our day," said Robert Suro, director of PHC, in a PBS interview. "This report signals a change in the character of that growth: A shift from immigrant growth to that of native-born children."

The report adds to a growing body of research that shows a tendency for Hispanics to acculturate rather than assimilate. Historically, U.S. immigrants have been assimilated into society by replacing their native customs with the Anglo-dominant culture. Hispanics, by contrast, have largely preserved their cultural traits while adopting a complementary set of skills from the mainstream, a process known as acculturation (see table, "Hispanic Segments").

  Isolated Acculturated Assimilated
•Household income $20,500 $36,100 $37,000
•Household size 3.9 people 3.6 people 3.1 people
•Time in the U.S. Primarily first generation U.S.-born or long-term resident Fourth generation & beyond
•Neighborhood Inner city; heavy ethnic minority concentration Mostly suburban; multi-ethnic neighborhoods Suburbs; mostly Anglo
•Self-identification Latin American Hispanic American or Latino American of Hispanic heritage
•Values Fully Hispanic Strong attachment to Hispanic tradition Fully Anglo
•Language preference Spanish Spanish or English English
•Use Spanish in conversation with friends/families Always Mostly Seldom
•Consume media in Spanish Always Seldom Hardly ever
Source: McKinsey Quarterly analysis, 1998, based on Yankelovich Partners, SRC, and American Demographics.

A 1998 McKinsey analysis of Census and Simmons Market Research data projected the proportion of acculturated Hispanics to grow from 57 percent in 1995 to 67 percent by 2010. Over the same period, the number of isolated Hispanics, or those who cling exclusively to Hispanic culture, will drop from 32 percent to 25 percent. A similar study by VNU Spectra in 2003 nearly replicates the McKinsey findings (see table, "Cultural Segmentation of Hispanics"). Both studies included variables beyond language to segment the U.S. Hispanic market by level of acculturation.

"Despite assumptions that Hispanics would assimilate, factors such as continued immigration, geographic proximity to Latin America, inexpensive communications, and the pervasiveness of Hispanic products and Spanish-language media suggest that sustained and even retro-acculturation are occurring," says Juan Solana, an economist with HispanTelligence. "Unfortunately, this has led to a perception that Hispanics have not adapted to the U.S. lifestyle."

But data consistently show Hispanics progressing across generations in language skills, education, income, and entrepreneurship (see other articles in this section). For example, acculturated Hispanics and their assimilated counterparts rate similarly with regard to economic achievement; according to the McKinsey analysis, average household income among the acculturated group was $36,100, roughly equal that of assimilated Hispanics ($37,000) but significantly higher than that of isolated Hispanics ($20,500).

Segments McKinsey (1998) VNU Spectra (2003)
Assimilated 10% 13%
Bicultural (acculturated) 61% 59%
Monocultural (isolated) 29% 28%
Source: McKinsey Quarterly (1998) and VNU Spectra (2003).

The misconception that Hispanic culture hinders progress comes in part from researchers' failure to distinguish between the first and subsequent generations. In a 2003 study by RAND Corp., economist James P. Smith found that successive generations of Hispanic men show significant improvements in wages and education relative to native-born Anglos. "These findings run counter to the prevailing view that there is something in the system that holds Hispanic immigrants back," Mr. Smith writes. "Based upon our experience with history, the children and grandchildren of Hispanic immigrants progress up the educational and income ladder in the same way as immigrants who came here from European countries."

"The market seems to be peaking with a high proportion of second-generation Hispanics where acculturation is dominant," says Mr. Solana. As the proportion of third-generation Hispanics grows, so will the trend toward assimilation, he adds.

For marketers, acculturated Hispanics represent the prime market – sophisticated consumers with considerable income who differentiate themselves by maintaining their Hispanic heritage. Moreover, the acculturated segment is the largest and fastest-growing segment, increasing at an annual rate of 11.9 percent. Although these coveted consumers identify themselves as Latino or Hispanic and have a strong attachment to Hispanic traditions, they prefer English-language media (see table, "Hispanic Segments").

With one foot in each culture, the acculturated Hispanic population also drives the acceptance of Hispanic products and customs by the mainstream U.S. market – the so-called Hispanization of the 21st century. "Hispanics are developing a unique identity in America," says Felipe Korzenny, co-founder of Cheskin, a California-based market research firm. "We are keeping to our roots while branching out – retaining our unique flavor in the American salad bowl of diversity."


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