Estimating the Economic Impact of the Latino Workforce in South-Central Minnesota (2000)

The nine counties comprising the Region Nine Planning District in southern Minnesota were studied to determine the economic impact of the area’s growing Latino population. Using input output analysis, a method that measures both the direct economic impacts and the indirect effects of links to other firms and households in an area, it was determined that the economic participation of the Latino population is both significant and critical to continued growth and prosperity in the region.

Key Findings:

  • The total estimated value added to the Region Nine economy due to the Latino workforce is $484 million per year. This amounts to slightly less than 10% of the total value added in the local economy each year, and it does not include agricultural workers due to lack of documentation on the ethnic makeup of the agricultural labor force.
  • More than 7,800 additional jobs for non-Latinos have been generated in the local economy due to the presence of the Latino workforce.
  • The largest employers of Latino workers, according to Equal Employment Opportunity Commission data are the food processing and packaging firms. In these manufacturing firms, about 33% of the employees are Latino. Food Processing, like Agriculture, is called a basic industry because its output is mostly exported outside of the Region Nine area, thus bringing wealth into the region. Its effect on the local economy is multiplied because many other local industries serve it and depend upon it for survival.
  • The presence of Latino workers and their families results in an estimated increase in government expenditures of $48.3 million, $24.5 of which is estimated to come from the state and local levels.
  • The presence of the Latino workforce causes an estimated $121 million in additional tax
    revenue to be generated in the region, $45 million of which is state and local tax revenue.
    This means that the best estimate of the Latino workforce’s effect on taxes is to cause lower
    effective tax rates for the non-Latino residents of the region.

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