When we speak of the U.S. Hispanic market, which Hispanic market are we talking about? The one that established the industry thirty-years ago or the one that will shape it in the next thirty-years? This is the topic of this month's In Perspective.
Almost everyone in the industry agrees that the composition of the U.S. Hispanic market has undergone significant changes, but few agree on its exact composition. So, let's pull some facts from Pew Hispanic Center (Suro and Passel, 2003) to set the record straight.
Demographics of the Hispanic Market
Between 1970 and 2000, the U.S. Hispanic population grew by 25.7 million with Hispanic immigrants accounting for 45 percent of that increase, and with second-generation Hispanics accounting for 28 percent. By 2000, first-generation Hispanics, totaling 14.2 million, made up 40 percent of the Hispanic population, while second-generation Hispanics, totaling 9.9 million, amassed to 28 percent; third-generation Hispanics, totaling 11.3 million, represented 32 percent of the total U.S. Hispanic population.
Between 2010 and 2020, the U.S. Hispanic market will continue to change. By 2010, first-generation Hispanics are expected make up 38 percent of the overall Hispanic population, with second-generation Hispanics increasing to 32 percent, and with third-generation Hispanics decreasing to 30 percent. By 2020, first-generation Hispanics are projected to make up 34 percent of the Hispanic population, with second-generation Hispanics comprising 36 percent, and third-generation comprising around 30 percent of the overall Hispanic population in the country.
Table 1 visually depicts the U.S. Hispanic market by three generational levels across three points in time—2000, 2010 and 2020. This chart shows that the U.S. Hispanic market has well defined segments, each comprised of millions of Hispanics who vary by the country in which they were born and based on how long their families had lived in the United States. So, what implications are there from such a diverse landscape?
According to the 2002 National Survey of Latinos, conducted jointly by the Pew Hispanic Center and Kaiser Family Foundation, the primary language spoken among U.S. Hispanics varies by generational level. Among first-generation Hispanics, 72 percent of Spanish-dominant Hispanics speak Spanish, 24 percent are bilingual and just 4 percent are English-dominant. There is no real surprise in these numbers, for most people. However, among second-generation Hispanics, 46 percent of U.S. Hispanics are English-dominant, 47 percent are bilingual and just 7 percent are Spanish-dominant. These numbers appear to be the inverse of first-generation Hispanics. And finally, among third-generation Hispanics, 78 percent are English-dominant, 22 percent are bilingual and 0 percent is Spanish-dominant.
What does all of this research tell us about the U.S. Hispanic market? It suggests that "the market" is not exactly a nice cohesive "market." The U.S. Hispanic population may be best called—a segment comprised of segments. Perhaps, a defining characteristic of the U.S. Hispanic population is that there are segments within the segment and that each is different from one another. The billion dollar question is how different are they from each other and on what factors do they differ?
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