News Column

The Hispanic Middle Class Emerges

May 2004, HISPANIC BUSINESS Magazine

Joel Russell

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Editor's note: This is the third of a four-part series celebrating 25 years of Hispanic Business magazine.

During the second half of the 1990s, the world's largest economy turned in its best performance ever. Between 1996 and 2000, the U.S. gross domestic product grew between 3.7 and 4.5 percent every year. In current dollars, it surged from $7.4 trillion in 1995 to $9.8 trillion in 2000 an increase of 32.4 percent that translated into $2.4 trillion in new wealth.

Never had such a large economy grown so fast for so long. And for the first time, U.S. Hispanics were in a strong position to reap the benefits of the windfall and solidify their already burgeoning socio-economic gains.

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VIDEO: The 90s




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"Hispanic household median income grew 27.3 percent from 1995 to 2001," according to U.S. Hispanic Consumers in Transition: A Descriptive Guide. In a two-year burst of wealth-building from 1998 to 2000, aggregate Hispanic net worth rocketed 31.2 percent to $512 billion, concludes the report, available at www.hispanicbusiness.com/research.

For Hispanic Business magazine, the decade represented fulfillment of a promise. For years the magazine had been uncovering and revealing data and trends that projected the emergence of a Hispanic middle class. Suddenly, all of the numbers proved it. In 1999, 48.4 percent of Hispanic families owned their own homes. Voter registration (34.9 percent of voting-age Hispanics) and turnout (27.1 percent) were at record levels. By the December 1999 issue of the magazine, total Hispanic purchasing power was estimated at $272.7 billion.

The magazine also participated in the prosperity. Support came from advertisers eager to tap into the increasingly affluent Hispanic market, and readers eager to manage their growing businesses, careers, and incomes. By June 1999, Hispanic Business magazine had grown to a 168-page issue. Much of the growth was fueled by U.S. Hispanic business formation, which increased 39.1 percent from 1992 to 1997, according to Commerce Department data. And Hispanic Business documented this core dynamic with dozens of articles and research-driven directories.

In 1990, the Hispanic Business 500 reported cumulative revenues of $8.3 billion; by 1999, that figure had more than doubled to $17.4 billion. The largest company on the list in 1999, Miami-based MasTec Inc., reached another milestone by becoming the first Hispanic-owned company to post annual revenues of $1 billion. "MasTec is simply proof of what many already understand that the Hispanic community has a vast reservoir of potential that, if given the chance, can reach unprecedented heights," said Aida Alvarez, administrator of the Small Business Administration. George Herrera, CEO of the U.S. Hispanic Chamber of Commerce, called MasTec's achievement "a clear indication that the Hispanic business community has entered the economic mainstream."

MasTec wasn't the only company showing success. Another Miami-based company, the Vincam Group, had actually looked certain to beat MasTec to the $1 billion mark. But before the company hit that threshold, CEO Carlos Saladrigas sold it to publicly-traded ADP. MasTec eventually won the race, in large part by going public itself and using the proceeds to buy smaller competitors. "Our listing on the New York Stock Exchange has had a significant impact on our business," CEO Jorge Mas told Hispanic Business in June 1999. "Access to capital has been instrumental in helping us ... acquire companies that fit into our plan and fund overall growth."

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