Investing in the latest census data
Filed under: Columns, Economy, People, Investing
According to the U.S. Census Bureau, the minority population in the United States reached an estimated 104.6 million, or 34 percent of the nation's total population, on July 1 2008. That's up from 31 percent when the census was last taken in 2000. According to the latest data, nearly one in every six residents (46.9 million people) are Hispanic. Furthermore, the report notes that 44 percent of children under the age of 18 and 47 percent of children younger than five are now from minority families. This is good news according to Ken Gronbach, author of The Age Curve: How to Profit from the Growing Demographic Trend. Gronbach believes that "Latinos have saved our country . . . They represent 14 percent of the population but 25 percent of the live births. The United States is the only western industrialized nation with a fertility rate above the 2.2 percent replacement rate." The credit doesn't rest solely on the shoulders of the Hispanic community, as Asians (the second-fastest growing group) increased 2.7 percent on a year-over-year basis to 15.5 million and the African-American population increased 1.3 percent to 41.1 million.
The influx of minority births coupled with high immigration levels have helped the country's population grow, but it could also help the economy. More people means more basic needs (food, clothing, health care) need to be filled. We could see consumer demand grow, which could lead to better performance for retail stocks. What retailers are most poised to prosper? In the current economic environment, I'd stick with the old pillars of discount retail: Wal-Mart (WMT), Target (TGT), Family Dollar (FDO) and -- my personal favorite -- Big Lots (BIG ).
Yes, Big Lots is battling some resistance, but it is in the midst of a three-month rally that has the shares trading in the $28.50 region. Moreover, it sure looks like the company may be repeating a pattern seen each of the past two years. This pattern takes the stock up to the $35 level before it retreats. If history is, indeed, repeating itself, $28.50 may be a decent entry price for this retailer.
And while retail could see the biggest bounce from the influx of minorities, let's not overlook housing. Rakesh Kochhar, associate director for the Pew Hispanic Center, feels that minorities will help "prop up" real-estate once the economic recovery begins. As CNNMoney.com points out, the current problems in the housing realm cost the Latinos and African Americans most dearly, but that trend could reverse just as quickly.
With white Generation X buyers leaving the housing market wanting (the same article says that there may now be 10 homes for every eight buyers), the growing minority population could step in and fill the void for years to come. After all, with the median age increasing to 36.8 years for the total U.S. population, the median age of the Hispanic population checks in at just 27.7 years.
So watch the housing markets in states with a large concentration of minority population. The article notes that California has the largest Latino population (13.5 million), while New Mexico has the highest percentage (45 percent). New York State has the highest African-American population (3.5 million) and Washington D.C. the highest (56) percentage. Finally, more than 5 million Asians live in California, with Hawaii having the highest (54) percentage. With more Pacific Islanders and Native Americans calling California home as well, it could be time to send your dollars West, young (and not so young) man.
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Reader Comments (Page 1 of 1)
5-14-2009 @ 2:41PM
Iridium said...
The Latino and African-American populations have been grossly underestimated. The true African-American population is closer to 70-80 million. An accurate count of inner city America hasn't been done since the 1970s.
Just look at the voting records. If you go by the numbers nearly 100% of the African American population voted in the last election. That is impossible.
They also lowball the illegal population as well. The true state of America is being hidden by inaccurate reporting of the census bureau.
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5-18-2009 @ 12:35PM
Ken Gronbach said...
I was interviewed by CNN's Les Christie for the above article. Once the story hit I began to get hate mail. It is very clear to me that many people do not understand the dynamics of shifting demography and the importance of understanding it. Between 1965 and 1984 the number of babies born in the United States dropped like a stone owing to a misguided belief that "Zero Population Growth" was beneficial. Roe vs. Wade (1973) also played a significant part and our fertility plummeted twenty-five percent after the Supreme Court decision. In 1985 we began to have children again at above replacement level fertility, but the damage was done.
We have a deficit in our population that is twenty years long. It's called Generation X. Generation X has nine million fewer people than the Boomer Generation born 1945 to 1964. This means that Generation X can not earn, consume, pay taxes or populate the labor force at the level of the baby Boomers because they simply do not have the critical mass.
When Generation X entered the entry level labor market twenty years ago they could not satisfy the demand. This sent labor costs soaring and jobs off shore. Latino's poured into the country to fill the demand unmet by Generation X. Now the bad economy and our own homegrown labor force, Generation Y, born 1985 to 2004 is forcing millions of Latinos to return to their home countries. The remaining Latinos have conveniently filled in the deficit in our population between the ages of twenty-five and forty-four years old.
As Generation X, now fortified by the remaining Latino immigrants, ages into the stage of life when they will be required to do the heavy lifting in the United states by paying most of the federal, state and local taxes, it is paramount that the Latinos immigrants assimilate as quickly as possible. Most of this assimilation will occur naturally because their culture is very compatible with U.S. culture and they assimilate faster than any other immigrants in the Nation's history. Without the Latino immigrants our economy would crash in ten years making the current economic crisis look like a cake walk.
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