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Hispanics Increasingly Entering US Workforce But Wages Remain Stagnant

First Posted: Nov 09, 2015 04:21 PM EST
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At unprecedented rates, the U.S. Hispanic population is joining the labor force, flooding most fields. Even as this happens, research shows that the income and net wealth of Hispanic workers continues to be less than that of non-Hispanic whites.

Dr. Jim Lee, an economics professor at Texas A&M University Corpus Christi, published research in November's issue of "South Texas Economic Pulse," which found the despite Hispanics' increasingly significant roles in the regional economy, Hispanics linger behind when it comes to income earnings. The report also specifies that schooling fails to provide Latinos a level playing field, which highlights the complex dynamics of today's socioeconomics.

Between 1990 and today, Hispanics' contribution to the U.S. workforce has increased 140 percent, and the Hispanic workforce has grown at 10 times the rate of non-Hispanic populations. Hispanics' share of the U.S. labor market has doubled from 8.5 percent to 16 percent. Furthermore, Latinas enter the market at a faster rate of 157 percent. However, income hasn't nearly kept up with Hispanic growth in the workforce. In fact, income has dipped, according to Dr. Lee, who alleged that decreases in wages are due to a lack of education. Because fewer Latinos attend college, fewer Latinos build wealth or gain access to higher income. Only 15 percent of Hispanics in the area of South Texas at age 25 or older finished college, which is the lowest among all ethnic groups. Non-Hispanic whites were twice as likely to be college degree holders.

"Between 1992 and 2013, wealth accumulation was associated with higher education only among whites and Asians," said the report. "For Hispanic and black families, a college degree seemed to be associated with less wealth. As a result, the wealth gap has only widened over the past two decades. According to Signe-Mary McKernan at the Urban Institute, partly because of lower incomes, blacks and Hispanics are less likely to own a home or save for retirement. So they benefit little from Federal government programs that provide tax breaks and subsidies for homeownership or retirement. Those income and wealth gaps tend to widen from one generation to the next. Also, whites are 5 times more likely to receive large gifts or inheritances than blacks."

According to the report, non-Hispanic whites earn 18 percent more income than Hispanics, which increases their net worth or wealth approximately 86 percent. On average, Hispanics 25 years or older have three years or less education than non-Hispanic whites, which leads to a boost in income earning for non-Hispanics. However, the income boosting effect of school may not cross ethnic/racial lines. While earning gains are visible among Asian and non-Hispanic whites, that isn't quite true of Hispanic and black families. The report suggests that this could be explained by white and Latinos obtaining more advanced and profession degrees.

Nonetheless, Hispanic and black college graduates not only fared worse than white and Asian college graduates, but worse than Hispanic and black college graduates of the past. For that reason, Hispanics tent to be associated with less wealth, thus they're less likely to own a home or save for retirement.

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