Employment Up, Wages Flat, for Hispanic Workers

Employment Up, Wages Flat, for Hispanic Workers

While an increase in Latino employment is driving the revitalization of the U.S. labor market, the hiring surge has not translated into higher wages. The weekly earnings for Hispanics and most other workers remain stagnant.

The "jobless recovery" may have turned around, but gains for Latinos have not been widespread. Immigrant Latinos, especially the most recent arrivals, have captured the most jobs. Non-citizens, Hispanics and others, who will not be able to vote in the November election are accounting for more than a quarter (28.5 percent) of the total increase in employment. But the improved employment picture has not delivered higher wages to workers overall and to Latinos in particular. The median weekly wage for Hispanics has declined in all but one of the past eight quarters. As a result, median wages for Latinos have also lost ground in comparison with the national median wage. 

These are among the key findings of a new Pew Hispanic Center report, "Latino Labor Report, First Quarter 2004: Wage Growth Lags Gains in Employment." The developments come at a time when jobs and wages are central issues in the presidential campaign. The report, which also deals with the political impact of the employment picture, includes an analysis of job gains by citizens and non-citizens, and a breakdown in the so-called battleground states. 

In the 12 months ending March 31, the economy added a net total of 1.3 million new jobs. Non-citizens captured 378,496 or 28.5 percent of those jobs. Employment growth for non-citizens was twice as fast as their population growth nationwide. The proportion of new jobs captured by non-citizens was also much larger than their share of overall employment (8.6 percent). Thus the political impact of job gains may be dampened by the fact that non-citizens, who do not vote, are benefiting disproportionately from the turn around in the labor market. 

The picture is somewhat different in the 18 so-called battleground states that have been the targets of intense advertising campaigns by both major political parties and that are generally considered up for grabs by the news media. These states have taken most of the job gains, scoring nearly 75 percent of the increase. In these states, non-citizens accounted for 20.1 percent of the employment increase, which is small than their share nationwide. Moreover, the non-citizen working-age population is growing faster in these states, 26.1 percent a year, than nationwide, and the job gains did not keep up with population growth. 

Nonetheless, the data show that in the 18 states that are expected to be closely contested in the presidential election, individuals who are not eligible to vote are capturing one out of every five new jobs. 

During the first quarter of 2004, Latino employment gains also started to outpace the growth in the Hispanic population and labor force for the first time since January 2000. The turnaround in labor market indicators for Latinos can be traced to the middle of 2003, and those gains have now been sustained for nearly a year. Non-Hispanic workers also fared well in the past year replicating the successes experienced by Latinos. However, the hiring boost, while clearly beneficial, has not been sufficiently large to return key labor market indicators, such as, the unemployment rate, to the levels they enjoyed prior to the 2001 recession. 

"The unemployment rate for native-born Hispanics, particularly for the fast-growing second generation, remains high and shows no indication of dropping," said Roberto Suro, director of the Pew Hispanic Center. 

Rakesh Kochhar, a veteran economist and senior research associate at the Center, wrote the report based on new data from the U.S. Bureau of Labor Statistics and the Census Bureau. Other major findings include: 

  • The Hispanic unemployment rate plunged from 8.2 percent in June 2003 to 6.6 percent in December 2003. It leveled off thereafter and stood at 7 percent in May 2004. The principal cause for the recent increase in the Latino unemployment rate is the rising participation of Hispanic workers in the labor market.     
  • The percent of Latino working-age population that is employed or actively seeking work, or the labor force participation rate, increased from 67.7 percent in December 2003 to 69.1 percent in May 2004. The employment-to-populations ratio, or the proportion of the Hispanic working-age population that is employed, also moved up from 63.3 percent to 64.2 percent over the same time period.     
  • The number of employed Hispanics increased by 704,779 workers from the first quarter of 2003 to the first quarter of 2004. The number of unemployed Latinos fell by 18,590 works in contrast to an increase of 111,281 in the preceding year. Across the same time frame from 2003 to 2004, the number of employed non-Hispanics increased by 622,565 and the ranks of unemployed non-Hispanics decreased by 249,996.     
  • Gains in Hispanic employment are driven by recently arrived immigrants with those entered the country since 2000 showing an increase of 748,305 jobs from the first quarter of 2003 to the first quarter of 2004. Meanwhile, immigrants who arrived previously as well as native-born Latinos showed net decreases in employment.     
  • Real weekly earnings for Latino workers in the first quarter of 2004 were lower than their level in the first quarter of 2003. Wages were also stagnant or declining for Hispanic males and construction workers, but on the increase for Hispanic females and immigrant Latino workers.

The Pew Hispanic Center is a project of the University of Southern California Annenberg School for Communication. It was found in 2001 with support from The Pew Charitable Trusts. The Center conducts non-partisan research that aims at improving understanding of the Hispanic population.