Hispanic-Owned Businesses on the Upswing

By: Robert Bernstein, International Trade Management Division

With the recent conclusion of another annual celebration of Hispanic Heritage Month, here are two sources of business data that show gains in America’s Hispanic-owned businesses.

Survey of Business Owners

The number of U.S. businesses owned by Hispanics grew by more than 1 million firms, or 46.3 percent, from 2.3 million to 3.3 million from 2007 to 2012. In contrast, the total number of all U.S. firms increased 2.0 percent during the same period, from 27.1 million to 27.6 million.

Hispanic business ownership is defined as having people of Mexican, Puerto Rican, Cuban or other Hispanic origin (such as Dominican or Salvadoran) owning more than 50.0 percent of the stock or equity in a nonfarm business operating in the United States. Hispanics owned 12.0 percent of all businesses in 2012, up from 8.3 percent five years earlier.

The rate of increase in receipts for Hispanic-owned firms also outpaced that of all firms. Hispanic-owned firms totaled $473.6 billion in receipts in 2012, an increase of 35.1 percent from $350.7 billion in 2007. In contrast, receipts for all firms grew 11.7 percent during the same period, from $30.0 trillion in 2007 to $33.5 trillion in 2012.

These statistics come from the 2012 Survey of Business Owners, which provides a broad socio-economic picture of business owners across the nation and is part of the U.S. Census Bureau’s five‑year economic census.

The Survey of Business Owners not only identifies whether business owners are of Hispanic origin in general, but also their nationality, or specific Hispanic group. Each Hispanic group saw the rate of increase between 2007 and 2012 in the number of firms they owned outpace the national average: Cuban (up 12.4 percent to 281,982), Mexican (up 56.8 percent to 1.6 million), other Hispanic or Latino (up 44.1 percent to 1.1 million) and Puerto Rican (up 65.0 percent to 258,221).

Additionally, slightly under half of Hispanic-owned firms (approximately 1.5 million, or 44.5 percent) in 2012 were owned by women.

Annual Survey of Entrepreneurs

More business statistics from the inaugural 2014 Annual Survey of Entrepreneurs, which provides statistics for employer businesses only, show that among the nation’s nearly 300,000 Hispanic-owned firms with paid employees, more than half were located in one of three states: California (66,487), Florida (59,987) or Texas (49,722). Among the 50 most populous metro areas, Hispanic-owned firms were most commonly found in Miami-Ft. Lauderdale-West Palm Beach (44,599), New York-Newark-Jersey City (28,949) and Los Angeles-Long Beach-Anaheim (28,858).

Returning to the nation as a whole, Hispanic-owned employer firms were most likely to be found in the accommodations and food services (40,371) and construction (40,340) sectors.

The survey also revealed a wide range of additional findings about Hispanic business owners and their firms. For example:

  • 96.1 percent of Hispanic-owned businesses (that reported language information) conduct transactions in English, with 66.9 percent conducting transactions in Spanish, potentially in addition to other languages.
  • 13.1 percent of Hispanic-owned businesses (compared with 8.9 percent of all businesses that provided the time in businesses information) have been in business less than two years.
  • 57.7 percent of Hispanic-owned businesses (that provided profitability information) were profitable; another 20.5 percent had losses, while 21.9 percent broke even.
  • 52.4 percent of Hispanic business owners (who reported citizenship information) were not born a U.S. citizen.
  • 35.7 percent of Hispanic business owners (who provided the education information) had a bachelor’s degree or higher prior to establishing, purchasing, or acquiring the business.
  • 20.2 percent of Hispanic business owners (who provided the information) spend an average of 60 or more hours per week managing or working in the business, and 48.2 percent spend more than 40 hours doing so.

A separate topical module in the Annual Survey of Entrepreneurs focused on innovation and research and development activities of businesses. Responses to the survey from Hispanic-owned businesses revealed, for instance, that 34.4 percent have upgraded a technique, equipment or software to significantly improve a good or service. Here are a few other interesting facts:

  • 29.7 percent have improved performance for a good or service by making changes in materials, equipment, software or other components.
  • 13.7 percent have developed a new use for a good or service.
  • 30.7 percent have made it easier for customers to use a good or service.
  • 23.9 percent have applied a new way of purchasing, accounting, computing, maintenance, inventory control or other support activity.
  • 20.6 percent have reduced costs by changing the way a good or service was distributed.
  • 20.5 percent have made a significant improvement in a technique or process by increasing automation, decreasing energy consumption or using better software.
  • 15.9 percent have decreased production costs by improving the materials, software or other components.
  • 16.0 percent have changed a delivery method to be faster or more reliable.

Please note that the statistics from the two surveys referenced in this blog are not directly comparable due to methodological differences. This is just a small snapshot of data about America’s economy collected by the Census Bureau and available at census.gov.

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Immigrant Voting in the United States

Written by: Edward Trevelyan

In recent decades, immigration has driven population growth more than natural increase. Therefore, it is useful to examine the degree to which immigration status shapes the voting-eligible population, or “electorate.” A new report released today from the U.S. Census Bureau examines a number of generational characteristics, including voting patterns.

In 2012, there were 214.8 million U.S. residents who satisfied both the age and citizenship requirements for voting. The Constitution stipulates that voters must be at least 18 years of age and U.S. citizens by birthright or naturalization.

For the purposes of such a measurement, the United States can be divided into immigrant “generations” by a person’s temporal proximity to the immigration experience. While the electorate contains members of all generations, the largest segment includes native-born voters whose recent ancestors were also native-born. In other words, their family’s immigrant experience is relatively indirect due to the passage of time.

First-generation members of the electorate are those who were born abroad and who have met the citizenship requirement for voting eligibility through naturalization. They numbered about 17.3 million, or 8.1 percent of the total electorate in 2012.

Second-generation members of the electorate include native-born American citizens who have at least one foreign-born parent. They are U.S. citizens at birth, and therefore meet the citizenship requirement for voting eligibility. Second-generation members of the electorate numbered 19.6 million, or 9.1 percent of the total electorate in 2012.

The remaining 177.9 million, or 82.8 percent of the electorate, are native-born citizens with two native-born citizen parents. The Census Bureau labels this group the “third-and-higher generation” because their immigration history is less recent, ranging from people with immigrant grandparents to those with many generations of native-born ancestors.

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The distribution of eligible voters shown in Figure 1 is similar to the total resident population distribution in 2013 (Figure 2), but clearly skewed towards the third-and-higher generation. In other words, the first and second generations’ shares of the electorate are smaller than their shares of the total population. This is because the citizenship requirement limits voting eligibility of many first-generation immigrants and the age requirement disproportionately limits voting eligibility of second-generation immigrants who are more likely to be under age 18 than the third-and-higher generation.

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The impact of first- and second-generation immigrant voting is therefore affected by citizenship and age requirements. This impact is further diminished by lower participation rates of eligible first- and second-generation potential voters compared to third-and-higher-generation potential voters (Figure 3). In 2012, first- and second-generation eligible voters were less likely than third-and-higher-generation eligible voters to register or vote.

While these differences of registration and voting rates are not dramatic, they may reflect generational differences in social and economic factors (such as income and education) that are related to the likelihood of voting.

First- and second-generation immigrant populations are growing quickly relative to the third-and-higher generation. Indicators of social mobility are also signaling increased assimilation, as exemplified by high educational attainment among the second generation. These factors, along with new growth in the second generation’s ages 18 to 44 cohort, suggest that immigrant voting will be increasingly relevant to electoral outcomes in years to come.

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Statisticians Join in on Fight Against Cancer

Written by: Jasen Taciak, John Posey and Lauren Bowers, Social Economic and Housing Statistics Division

Last month was National Breast Cancer Awareness Month, and many people may not realize the role Census Bureau statistics play in the National Breast and Cervical Cancer Early Detection Program (NBCCEDP).

Created by the Centers for Disease Control and Prevention (CDC) through congressional mandate, the program provides funds to all 50 states and the District of Columbia, five U.S. territories, and 11 tribal organizations to improve access to screening and diagnostic services. The goal of this program is to reduce breast and cervical cancer mortality among low income, uninsured or underinsured women.

In order for the CDC program to effectively implement and evaluate the program, the CDC partially sponsors the Small Area Health Insurance Estimates (SAHIE) program. SAHIE provide county and state statistics on the uninsured by age, sex, income, and race and ethnicity. SAHIE are the only source of single-year health insurance coverage estimates for all U.S. counties.

To provide these estimates, the SAHIE program models health insurance coverage by combining American Community Survey statistics with auxiliary data sources, including administrative records. SAHIE are consistent with the corresponding American Community Survey statistics, but the modeling methods allow for the release of estimates at a finer detail than would be possible with the survey statistics alone.

The map below uses data from the 2014 SAHIE to display the uninsured rate for women ages 40 to 64 living at or below 250 percent of poverty. The areas with darker shades have higher uninsured rates, and the areas with lighter shades have lower uninsured rates.

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The SAHIE program provides estimates on the women eligible for the NBCCEDP, which are then combined with data collected by the NBCCEDP grantees on all women participating in the program to form estimated participation rates of cancer screening services. This information is crucial because it provides the CDC and grantee-administrators with the capability to develop resource allocation strategies using data not previously available, and with the ability to monitor screening progress below the state level.

Since 2004, the partnership between the Census Bureau and CDC has been a model of successful interagency collaboration. This collaboration provides a great example for harnessing survey and administrative data to support and improve program operations to better serve the needs of the American public.

The value of the NBCCEDP is measured not only by the number of those screened but also by the potential number of lives extended or saved by early detection. Since the program’s implementation, 4.9 million uninsured or underinsured women have received more than 12 million breast and cervical cancer screenings resulting in the diagnosis of more than 70,997 breast cancers, 3,845 invasive cervical cancers, and 175,688 premalignant cervical lesions.

Further discussion about the use of SAHIE in estimating the number of women eligible for breast and cervical screening through the NBCCEDP is available in a special issue of Cancer Causes and Control published in 2015. Additional information about the SAHIE program can be found at <www.census.gov>.

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Who Are Veterans?

Written by: Kelly Ann Holder, Social, Economic and Housing Statistics Division

The U.S. veteran population totals 19 million men and women living in the United States and Puerto Rico who have served on active duty in the U.S. Army, Navy, Air Force, Marine Corps or Coast Guard. These veterans served for different lengths of time and during different wartime and peacetime periods. They entered the military at different ages and came from different backgrounds. Some were drafted, while others volunteered.

Their differences make each veteran unique and influence the size and overall characteristics of veterans as a group. So, who are veterans? Understanding the population we call “veterans” requires some basics in military history and policies.

To start, we can think of veterans as two main cohorts — “draft era” and “All Volunteer Force” (AVF). Draft-era veterans are mainly those veterans who served in the military during the Vietnam era, Korean War or World War II. Forty-three years ago, in 1973, the draft ended and the AVF began. The draft-era military was substantially larger than today’s AVF.

To put this into perspective, 16 million people served in World War II, 6 million served in the Korean War and 9 million served during the Vietnam era (Figure 1). In contrast, AVF active-duty military strength has remained under 2 million each year since the 1990s. In 2015, there were just under 1 million living World War II veterans, 70 years after the end of the war, while our active duty military size was about 1.3 million service members.

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Figure 2 shows the impact of the draft-era military on the composition of both the veteran and nonveteran populations. Because such a high proportion of men were drafted into the military during World War II, the Korean War and the Vietnam era, older nonveterans are predominately women.

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The disparate sizes of the draft era and AVF military also affected the proportion of men who were veterans over time. By 2000, for example, most men who were old enough to have served in the Korean War and World War II were age 65 or older while those who were old enough to have joined the military since the start of the AVF were under the age of 45. In that year, about two out of three men age 65 or older were veterans compared with about one out of ten men under the age of 45. Over the past 15 years, those percentages have decreased as the draft-era cohort declines due to deaths and the AVF cohort nears age 65. In 2015, about 43 percent of men age 65 and older and 5 percent of men under the age of 45 were veterans.

The aging of this large draft-era cohort also affects the size of the veteran population over time. Unlike the nonveteran population, which increases each year, the veteran population decreases each year as mortality in the draft-era cohort outpaces military discharges. In 2015, the median age of all draft-era veterans was 72 years. The largest living cohort of veterans today, with a median age of 68 years, served during the Vietnam era.

Military policies and enlistment requirements over time have also had an effect on the characteristics of veterans. Take four characteristics in particular: sex, race, citizenship and education. Figure 2 highlighted a unique aspect of the veteran population that sets it apart from the nonveteran population, the ratio of men to women. Less than 10 percent of veterans are women. In comparison, over half of nonveterans are women (Figure 3).

Women did not become a permanent part of the U.S. military until 1948. Between the early 1940s and mid-1970s, women were restricted to less than 2 percent of the military population. Since the advent of the AVF, women have joined the military in greater numbers and now make up a larger proportion of their veteran cohort than their predecessors. In 2015, 15.3 percent of AVF veterans were women, compared with 3.4 percent of draft-era veterans. The proportion of women in the total veteran population will continue increasing over the next several decades as the size of the draft-era cohort and the veteran population as a whole decline.

Veterans are a less racially diverse population than nonveterans, in part due to historical policies regarding the integration of the military during World War II and into the Korean War as well as the size of those older cohorts.  In 2015, 78 percent of all veterans were White non-Hispanic compared with 62.6 percent of nonveterans (Figure 3). Seven percent of veterans were Hispanic, compared with 17.2 percent of nonveterans.  Over time, the veteran population has become more diverse, which becomes clear when comparing veterans by age. About 65 percent of veterans under the age of 35 were White non-Hispanic in 2015 and 14.7 percent were Hispanic. Compare that with the age 75-and-older population of mainly Korean War and World War II veterans, of which 88.3 percent were White non-Hispanic and 3.9 percent were Hispanic.

Another aspect of the military that makes the veteran population unique is citizenship. While most members of the U.S. armed forces are citizens, citizenship is not a requirement for military enlistment. Special provisions of the Immigration and Nationality Act have made it possible for those enlisted in the military to obtain U.S. citizenship. In 2015, less than one percent of the veteran population were not citizens, compared with 9 percent of nonveteran adults (Figure 3).

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A final example of how military requirements shape the veteran population is education. Each service branch has their own requirements for enlisted personnel, but, with few exceptions, they require a high school diploma. Therefore, veterans are generally more educated than nonveterans. Nearly 94 percent of veterans have a high school diploma or more as their highest level of education, compared with 86.4 percent of nonveterans (Figure 3). The majority of veterans have at least some college education, if not a completed degree.

All the ways in which veterans are unique because of military history and policy changes tell us something about who veterans are as a group and how they are different from nonveterans. Veterans are mostly older, White, male citizens with at least a high school education. But, who are veterans, really? Some are your grandfathers: 52.4 percent of male veterans are 65 years or older. Some are your mothers: the median age of female veterans is 51 years. Some are your coworkers: 72.4 percent of male veterans and 68.1 percent of female veterans ages 18 to 64 are employed. Some are students at the local college: 23.7 percent of male veterans and 33.8 percent of female veterans ages 18 to 34 are enrolled in school. All are celebrated on Veterans Day.

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Women Responsible for the Increasing Number of “Vetrepreneurs”

Written by: Robert Bernstein, International Trade Management Division

After serving their country, millions of military veterans contribute to the nation in another, important way: as entrepreneurs. Between 2007 and 2012, the ranks of veteran-owned businesses rose by 74,074, or 3.0 percent, to reach 2.5 million.

Women were solely responsible for this overall increase in the number of veteran-owned firms. In a span of only five years, the number of female veteran-owned firms approximately quadrupled, from 97,114, or 4.0 percent of all veteran-owned firms, to 383,302, or 15.2 percent. While the number of female veteran-owned businesses was rising, the number of male veteran-owned firms was falling, from 2.3 million to 2.1 million.

There were also a relatively small number of firms that were jointly owned by veteran men and women. They declined from 29,593 to 13,714 over the period.

Furthermore, veteran-owned businesses comprised nearly 1 in 10 of all businesses. In contrast, the total number of all U.S. firms increased only 2.0 percent during the same period, from 27.1 million to 27.6 million.

These business statistics come from the 2012 Survey of Business Owners, which provides a broad socio-economic picture of business owners across the nation, and is part of the U.S. Census Bureau’s five‑year economic census, conducted for years ending in 2 and 7.

We also see that like businesses as a whole, veteran-owned businesses increasingly do not have paid employees. For instance, they may run a “mom and pop” corner store or be real estate agents or bloggers. For veteran-owned businesses, the number who did not have paid employees climbed 6.3 percent from 2007 to 2012, and the number who did have them fell 9.9 percent. Consequently, the percentage of veteran-owned businesses that did not have paid employees rose from 79.9 percent to 82.5 percent. For all businesses, the corresponding increase was from 78.8 percent to 80.4 percent. Accompanying this trend, the number of people employed by a veteran-owned business declined 13.2 percent, to 5.0 million, with receipts for both employer and nonemployer veteran-owned businesses falling 6.4 percent to $1.1 billion.

Veteran-owned firms were most commonly found in the professional, scientific and technical services sector of the economy (North American Industry Classification System, or NAICS 54), with 419,666 businesses. Within this sector, large concentrations were found in accounting, tax preparation, bookkeeping and payroll services (54,344); legal services (58,224); and management, scientific and technical consulting services (96,170).

California (252,377), Texas (213,590), Florida (185,756) and New York (137,532) led all states in the number of veteran-owned businesses. The four states combined were home to about 1 in every 3 of them (31.3 percent).

Drilling down to the local level, we see that more than one-third of California’s veteran-owned businesses were in the Los Angeles metro area (92,250 or 36.6 percent), with about half of Texas’ located in either the Houston (51,017) or Dallas-Fort Worth (58,587) metros (109,604, or 51.3 percent). Furthermore, about one-third of Florida’s businesses were in the Miami-Fort Lauderdale metro area (59,817 or 32.2 percent). New York City led the 50 most populous cities with 57,216 such firms and accounted for more than 40 percent (41.6 percent) of all veteran-owned businesses in New York State. (The entire New York-Newark-Jersey City metro area, which spans parts of New York, New Jersey and Pennsylvania, led all metropolitan areas with 139,693 firms.)

Another area with a notable concentration of veteran-owned businesses is “Hampton Roads,” which has a large military presence. For instance, among the nation’s 50 most populous cities, Virginia Beach, Va., had the highest proportion of veteran-owned firms, at 15.2 percent, or 5,384 such firms in all.

Generally, veteran-owned firms have been in business longer than other firms. Among the 405,235 veteran-owned firms with paid employees, 58.4 percent had been in business for 11 or more years, with only 6.8 percent being start-ups, in business for less than two years. The respective percentages for nonveteran-owned firms were 44.6 percent and 9.4 percent. These findings come not from the Survey of Business Owners but from the Census Bureau’s inaugural 2014 Annual Survey of Entrepreneurs, which provides a timelier, more frequent socio-economic portrait of these owners. The scope of the survey is limited to those with paid employees. It provides data on the number of years a firm has been in business so you can compare the demographic composition of new businesses to that of established ones.

These same Survey of Business Owners data (excluding statistics on years in business) are available at the more specific industry level (down to the six-digit NAICS), broken out by employer and nonemployer firms, and include additional variables, such as size of firms by receipts and employment levels.

Drawing on a sample of 1.75 million employer and nonemployer businesses, the Survey of Business Owners publishes data on the number of firms, receipts, payroll and employment, as well as the gender, ethnicity, race and veteran status of the firm owners. Geographic detail, down to the economic place, is also available. This survey is the most comprehensive source of economic data on businesses by the demographic characteristics of the owners.

The Annual Survey of Entrepreneurs collected data from a sample of approximately 290,000 employer businesses that were in operation anytime during the survey year and provides data similar to the Survey of Business Owners, but for the nation, states and metro areas and to two-digit NAICS level only. Statistics from the two surveys are not directly comparable due to methodological differences.

Come back to Random Samplings for additional blogs about these data.

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