Latino Labor Report 2008: Construction Reverses Job Growth

Jun 04, 2008

Due mainly to a slump in the construction industry, the unemployment rate for Hispanics in the U.S. rose to 6.5% in the first quarter of 2008, well above the 4.7% rate for all non-Hispanics. As recently as the end of 2006, the gap between those two rates had shrunk to an historic low of 0.5 percentage points--4.9% for Latinos compared with 4.4% for non-Latinos, on a seasonally adjusted basis.

The spike in Hispanic unemployment has hit immigrants especially hard. Their unemployment rate was 7.5% in the first quarter of this year, marking the first time since 2003 that a higher percentage of foreign-born Latinos was unemployed than native-born Latinos. Some 52.5% of working age Latinos (ages 16 and older) are immigrants. Latinos make up 14.2% of the U.S. labor force.

Despite the disproportionate impact that the economic slowdown has had on immigrant Latino workers, there are no signs that they are leaving the U.S. labor market. Their labor force participation rate--that is, the percentage of the immigrant working-age Latino population either employed or actively seeking employment--has remained steady. However, they now play a smaller role in the growth of the Hispanic workforce than in recent years.

The latest trends in the labor market represent a dramatic reversal for Latino workers. Hispanics lost nearly 250,000 jobs over the past year because of the recent slump in the construction sector. For several years, construction was the mainstay of job growth for Hispanic workers, especially those who are immigrants. Even as home building stumbled in 2006, Hispanics found nearly 300,000 new jobs in the construction industry from the first quarter of 2006 to the first quarter of 2007. The ongoing slump in construction over the past year has wiped out those gains, virtually in their entirety.

Mexican immigrants have suffered the effects of the construction downturn most keenly. Latino workers who exited construction in 2007 included about 221,000 immigrants. Some 152,000 of those workers had migrated from Mexico. Latino immigrants who entered the U.S. in 2000 or later (from any country) lost 69,000 jobs in construction. For each of these groups of immigrants the jobs lost in construction accounted for the majority of losses from the first quarters of 2007 to the first quarter of 2008.

Labor market outcomes for Hispanic women appear to be worse than for men during 2007. They left the labor force in greater proportion and experienced greater increases in unemployment than did Hispanic men. Some 130,000 more Latino women became unemployed in 2007, and their unemployment rate increased from 5.6% to 7.0%.

Weekly earnings for most groups of Hispanic workers also slipped backward in the past year. Again, Latino construction workers suffered most from the decline in wages. Their earnings tumbled in 2007 and they now earn less than they did two years ago in the first quarter of 2006.

These findings emerge from the Pew Hispanic Center's analysis of the latest data from the Bureau of Labor Statistics and Census Bureau. Most of the data are from the Current Population Survey, a monthly Census Bureau survey of approximately 60,000 households. Data from three monthly surveys were combined to create larger sample sizes and to conduct the analysis on a quarterly basis.

Read the full report Latino Labor Report 2008: Construction Reverses Job Growth for Latinos on the Pew Hispanic Center Web site.

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