Economics Society

Dear USA: Welcome to Latin America

If “demographics is destiny,” as Arthur Kemp wrote, then America’s future workforce is one that will, in only a short while, look very different from what we see today. This change in composition will require a serious revolution in how U.S. companies think about so-called “minorities” in the future.

First, let’s consider the statistics. Census Bureau projections show a very clear overall majority-minority reversal pattern in the coming decades:

By 2018, today’s under-14 minority population will become the majority, and the same thing will happen for the entire population by about 2043. Within this evolution, Hispanics will see the most dramatic shift:

Somewhere around the middle of the century, Hispanics will be one-third of the U.S. population. As research from the Pew Foundation notes, “800,000 young U.S.-born Hispanics enter adulthood each year, but in the coming decades, that number will rise to more than a million annually.” It’s important to note that this increase in the Hispanic population is not one driven by immigration but by the increase in U.S.-born Hispanics, which means that any hardening in U.S. immigration policy will not alter this evolution significantly (and any liberalization will only accelerate it).

Furthermore, at this rate, it’s easy to imagine that a majority of households will have some Hispanic connection within them, perhaps by marriage, adoption, or co-habitation, etc. If we take a step back then, it’s quite possible to imagine a U.S. in only a few decades where most people either have some link to Hispanic culture or are themselves of Hispanic background. This fascinating development begs a question that has been centuries in the making: is the U.S. about to enter — led by states such as Texas, Arizona, New Mexico, and California — Latin America? If so, what does that mean for U.S. society and for its major companies, neither of which, historically, has paid much attention to this part of the world?

Let’s start by thinking about politics. I’ve read over and again how the rising Hispanic population is an existential challenge to the Republicans and the more conservative elements of U.S. society, but I think this point of view does not take into account the history of Latin America as a whole. Even the most cursory glance at the evolution of the region shows a continent that was, for the majority of its post-colonial history, extremely conservative. After all, for centuries, most Latin American nations were ruled by presidents supported by oligarchic and/or military power. It was the excesses of these regimes, not an inherent leftist inclination, that gave birth to the revolutions that took hold (and which the U.S. helped to suppress) in the 70’s and 80’s. Indeed, I was a reporter in El Salvador in the 1990’s and remember vividly speaking with survivors of that country’s civil war. Time and again, I heard things like: “We never wanted to be communists. We just did not want to be economic slaves for the rest of our lives.” I heard similar sentiments from many other Latin Americans, for whom communism was not an ideology they embraced but a lever with which they hoped to change the worst and most repressive aspects of oligarchic (typically U.S.-backed) regimes.

If one assumes that, in time, as U.S. Hispanics become more prosperous, some will revert to their historical gravitation toward conservative social positions, then there is no reason why the emergence of large and vocal Hispanic population will necessarily mean the end of conservative influence in this country. Furthermore, anyone familiar with Latin America knows that, with a few exceptions such as Argentina, the region has historically lacked an influential middle class. This phenomenon created polarized societies in many ways. Latin Americans are often strongly focused on either a conservative or liberal axis. Should that pattern reemerge in the U.S. (and a few signs point to that already, as prominent Hispanic politicians seem to be leaning either hard-left or hard-right), the arrival of a Hispanic U.S. could perhaps add to the polarizing trend we see today, which would be yet another nail in the coffin for the traditional centrist positioning of U.S. society.

Turning to the second question, what do these changes mean for U.S. corporations, especially as employers? My belief is that they are going to have to rethink almost everything about how they have handled so-called “minority” workforces in the future. Efforts such as “diversity” and “inclusion” programs at most major private and public companies, are all too often largely symbolic gestures. A scan across most major U.S. corporations or top-tier consulting firms finds a lot of diversity at the lower levels but the traditional demographic (middle-aged men, usually white) at the top. I have been in many diversity workshops for executives/partners were almost all participants were white middle-aged men, most of whom “felt bad about the situation” but few of which really proposed any major change besides “we need to try harder.” The reality is that, to date, most companies have gotten away with this half-hearted approach because minorities were, in fact, minorities and thus hampered by limited economic power. This condition meant that they could ask for change but rarely demand it, but that is clearly going to change in the coming decades. U.S. companies will realize, hopefully sooner rather than later, that the U.S. is, in fact, joining Latin America and that this evolution will change how corporations interact with minorities at all levels. The reason for the severity of this change is what I call “Immigration 2.0.”

In “Immigration 1.0,” which was the U.S. model for the first two centuries of its existence, the great majority of voluntary immigrants came here with the goal of total assimilation. They set aside their languages and cultures, learned English, and tried, as best they could, to be just like the people they found here. In other words, they wanted most of all to be indistinguishable from native-born “Americans.” Few Italian-American families, for example, taught their children or grand-children Italian, and the same was the case with most other immigrants. Immigration 2.0, which was pioneered, not always willingly, by first wave of Asians who came here, is a very different model. In this model, immigrants keep a strong connection to their home country, keep their language, and in many cases maintain strong commercial or social ties with their original populations. The Hispanic population in the U.S. today leans heavily toward the latter model. Moreover, signs such as the increasing use of Spanish by second and third generation Hispanics, as well as increasing business ties between U.S. Hispanics and Latin America, suggest that Immigration 2.0 may even gain strength as the U.S. becomes more and more Hispanic.

For companies, then, the current model where minority consumers are pursued while minority board members and senior executives are (proactively or passively) avoided, will have to end. In an Immigration 2.0 world, Hispanics, in return for their economic support and loyalty, will demand executives and corporate leaders who are themselves Hispanic or connected to the Hispanic culture in a real and meaningful way. This demand will be impossible to reject, and this radical change in perspective will force corporations to start thinking of Hispanics differently from minority groups that preceded them, i.e., not as a group that must be appeased with “inclusion programs” but as one that must be dealt with as a driving force fundamental to their existence in this country. This change will not be easy, but companies should start thinking about this now, because their track record in decades of dealing with other under-represented groups — even women, who were never even a “minority” — is passable at best and abysmal at worst. Extending the current inclusiveness model to Hispanics will not succeed; rather, corporations should go back to the drawing board on the topic of diversity (for everyone, not just Hispanics), and they have much less time than they think to do so.

As this major demographic change appears in the horizon, U.S. Hispanics should also understand that non-Hispanic Americans have the right to question what this great evolution will mean for them. Never in the history of the U.S. has one minority group made such a major change to the demographic make up of this nation. Indeed, it’s important for Hispanics to understand the trepidation with which so many non-Hispanics see the U.S.’ cultural union to the Spanish-speaking parts of the American continent. Latin America has a long history of mis-managed nations whose corrupt governments, social inequalities and, to be honest, ingrained racism, are not a model any nation would want to import. One can only hope that it’s the good parts of Latin American culture that will flourish here and not the worst. Despite those valid concerns, as someone born in Latin America who is now a U.S. citizen, I hope the U.S. will in the end overcome its fears and welcome the invitation to be a part the culture that has defined the greater part of this continent’s population for centuries.

I have had the good fortune to spend a lot of time in Argentina, Brazil and Uruguay, and it’s always fascinating to see the U.S. from the “other end” of the continent. The evolution about which I write is one that has been tracked closely in Latin America, often with a mixture of irony and bemusement. As one Argentine writer put it to me over coffee in Buenos Aires: “In the Latin American clubhouse, there has always been an empty chair with the U.S.’ name on it.” Well, it seems that the time is coming when that chair will no longer be empty, for it now is, and probably always was, this nation’s destiny to join the wonderful, vibrant — and yes, flawed — culture that stretches from Monterrey to Montevideo.

Besides, they were nice enough to save us a seat.


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