US immigration law changes and their effect on Hispanic media


By Julio Rumbaut

No matter what the final form of the changes in US immigration law currently being debated, these changes will have a profound effect on US Hispanic media vehicles as a result of a lifting of legal, social and economic barriers which will markedly expand the consumer base of US Hispanics.

Therefore, rather than recounting specific details of the potential resulting legislation which are now being negotiated in the Congress, it may be best to analyze, first, the larger context of the rapid demographic expansion of this population, estimated at 44 million as of 2006; and then the major net effect of any of these bills on US Hispanic media.

Hispanic population trends have been and continue to be clear. Hispanics accounted for half of total U.S. population growth between 2000 and 2006, although they comprise 14% of the total population (expected to expand to 20% of the population by 2030 and to 25% by 2050). 

Further, because of the youthfulness of the Hispanic population, combined with higher rates of fertility (even in the event of moderate or reduced rates of immigration), it will supply much of U.S. population growth in the decades to come, making Hispanics a real growth industry.

The best estimates indicate that about 12 million persons, or 30% of all the foreign-born in the US, are unauthorized immigrants. (About 56% of them are from Mexico, and another 22% from elsewhere in Latin America.) These migrants are responding to the growing demand for their labor generated by the U.S. economy, which faces a demographic challenge to future labor-force growth as the fertility rate of natives declines and a growing number of native-born workers retire. As the Congressional Budget Office put it in a 2005 report: "The baby-boom generation's exit from the labor force could well foreshadow a major shift in the role of foreign-born workers in the labor force. Unless native fertility rates increase, it is likely that most of the growth in the U.S. labor force will come from immigration by the middle of the century."  More than half of that immigration will be Hispanic.
In the short run, one main effect of the principal bills proposing comprehensive immigration reform will be a more orderly, open and faster legalization of status for foreign-born persons living in the United States.  In the long run, this will lead to a significant increase in the number of naturalized US citizens.

The regularization of legal status and of paths to citizenship will enable US Hispanics to literally live and move about more openly without the fear of prosecution or deportation if they adhere to the provisions of the legislation. Not a bad bargain in exchange for more permanent freedom and economic opportunities – a win-win both for the individual workers affected and the larger US economy.

Hence, while a sizable number of Hispanic individuals may be in legal limbo for some time, they will certainly be protected under the law and will logically and naturally aspire and achieve better and more economically rewarding employment, as well as enter into entrepreneurial undertakings.  In particular, the legalization of many young people who have been precluded from attending colleges and universities because of residency requirements will significantly enhance the human capital of the Hispanic population, their access to better-paying jobs, their future earnings, and the tax base of their communities.

Media serving the Hispanic market's rapidly expanding population will be extremely well positioned to capitalize on an expansion of this consumer base, which will yield higher disposable income and more permanent aspiration factors due to more open and more rapid legitimization of legal status- and the trust and acceptance that comes with it.

This is especially the case when one of the major challenges faced by Hispanic media is the geometric upside of convincing new and present advertisers to spend more dollars and at higher cost per points against the market.
It will also accrue positively to audience, readership and user measurement as the new environment will minimize the "Big Brother" fear inherent in some Hispanics as to audience measurement services and techniques. Better measurement will undoubtedly result in more accurate and likely larger reported audience, readership and user figures for US Hispanics.

Higher audiences and the ability to effectively garner the available geometric increases in ad budgets will yield dramatic increases in revenue, profit and therefore valuation.

This capitalization of the changes comes without any marked increased in the cost base of the media. The audiences, its preferences and media habits will not necessarily change. What will change will be social and especially economic mobility as a results of greater access to market opportunities for individuals.

For both media and advertisers the phenomena of clearly defined Hispanic enclaves in major US cities and expanding in mid size and smaller population centers will continue to enhance the market's viability. Not only do these enclaves perpetuate first language use, but also make it an easy market to quantify and identify.

All of this will also bring about expanded competition from major players who will not only want, but will need, to enter the Hispanic market due its unequaled metrics.

Add to this continuing political and economic instability in Latin America, coupled with the growing need and demand for immigrant labor by the US economy, and it will be difficult for the US to effectively close off its borders to immigrants seeking a better political climate and economic stability in a land of opportunity.
So in many ways, the legitimization of immigrant US Hispanics is also a further legitimization of the continuing viability and rising valuation levels of US Hispanic media.

Julio Rumbaut is CEO of Miami-based media brokerage and consulting firm Rumbaut & Company, he has been owner, founder and manager of numerous television and radio stations including WSCV-TV Channel 51 in Miami, one of the first three Telemundo owned and operated stations.