Employment among Latinos

SIGNIFICANCE: Latino Americans have historically occupied a comparatively disadvantaged position in the US labor market relative to the White population and other minorities. This overall trend, however, varied over time in response to changes in the economy.

Between 1980 and the 2020s, the Hispanic population in the US more than quadrupled to make up 10 percent of the US population by 2010 and nearly 20 percent by the mid-2020s. The Venezuelan population grew more than 180 percent between 2010 to 2020. As the population increased, the proportion of Hispanic Americans in the workforce also increased from 8.5 percent in 1990 to 18 percent in 2020 and 19 percent in 2023.

Historical Background

In the late nineteenth and early twentieth centuries, Mexican laborers (mainly displaced peasants) began crossing the border into the American Southwest to find work. Throughout the twentieth century, US immigration policy alternately encouraged and restricted the entry of Mexicans, but the net result has been essentially a steady stream of immigrants. Their numbers, along with the descendants of earlier Mexican immigrants, made Mexicans the largest subgroup of Latinos in the United States.

Puerto Ricans were granted citizenship during World War I to ease US labor shortages. By 1920, nearly 12,000 Puerto Ricans had left their home for the United States, settling mostly in New York City and finding employment mainly in manufacturing and services. Their numbers have grown, making them the second-largest Latino subgroup.

Cubans constitute the third most numerous subgroup. From 1959, when Fidel Castro assumed power following the Cuban Revolution, to 1990, the Cuban population in the United States—which had previously numbered only about 30,000—grew to 1,044,000. In the 2020s, the population of Cuban Americans reached over 2.7 million.

The Latino American Labor Force

In the 1980s and 1990s, the labor force participation rates (that is, the percentage of persons who are employed) for the Latino population age sixteen and older approximated those of the non-Latino White population in the same age group (66.5 percent for Latinos and 67.2 percent for non-Latino White people in 1996). However, the rate for Latino men (79.6 percent) was higher than that for non-Latino White men (75.8 percent) in the same year, while Latinas had a lower rate (53.4 percent) than non-Latino White women (59.1 percent).

The occupational distribution of the Latino population reflects both the traditional background of the subgroups and the economic changes of later decades. According to the Statistical Abstract, in 1996, Mexicans were mostly operators, fabricators, and laborers (24.5 percent); they also had the highest percentage of workers in farming, forestry, and fishing among all the other subgroups (8.4 percent). Cubans had the highest proportion in managerial and professional occupations (21.7 percent) as well as in technical, sales, and administrative support positions (32.7 percent). The advances made by Puerto Ricans were evidenced by the fact that their concentration in the latter positions (32.1 percent) and in managerial and professional occupations (19 percent) closely approximated those of the Cubans.

Comparison with Non-Latino White Americans

A comparison of the occupational distribution of Latinos with that of non-Latino White Americans reveals that the former are concentrated in lower-level occupations and that White men are concentrated in managerial and professional occupations. In the late 1980s, Mexican American men were concentrated in skilled and semiskilled blue-collar jobs, although they were advancing to better jobs; Puerto Rican men were in service and lower-level white-collar jobs. Latinas were more likely than White or Black women to be semiskilled manual workers.

Gregory DeFreitas reported that in 1949, US-born men of Mexican and Puerto Rican ancestry had incomes that were 55 percent and 76 percent, respectively, of the White non-Latino level. During the 1960s, both groups improved relative to White people; but in the 1970s, Puerto Ricans experienced a decline and Mexicans remained at the same level. Latinos generally experienced decreases in income during the 1970s, and median Latino incomes declined in absolute and relative terms after the 1970s. By 1987, Latino income was still almost 9 percent lower in real terms than it had been in 1973, and compared to the income of non-Latino White Americans, it was even lower than it had been fifteen years earlier.

According to the Statistical Abstract, the median income of Latino households, at constant 1995 dollars, was $25,278 in 1980; it rose later to $26,037 in 1990 but fell to $22,860 in 1995. It was 64 percent of the White non-Latino median income, which in 1995 was $35,766, and practically equal to that of Black Americans, which stood that year at $22,393. This income disparity continued into the twenty-first century, with average incomes among Hispanic and Latino individuals in 2023 reaching $65,540, compared to $89,050 among the non-Hispanic White population.

Between 2003 and 2023, the number of American workers who were Hispanic increased by 69 percent, comprising 19 percent of the total civilian labor force in 2023, making this the fastest-growing worker group. The Hispanic labor force employment ratio also remained above the national average, with the number of employed individuals increasing from 17.4 million in 2003, to 30.3 million in 2023.

Unemployment

Unemployment has been a long-term problem for Latinos. Their actual unemployment rates reflect structural factors such as business-cycle fluctuations, industrial restructuring, and changes in demand as well as individual characteristics such as educational level and previous work experience. As indicated in the Statistical Abstract (1997), in 1980, the total unemployment rate was 7.1 percent, while it was 10.1 percent for Latinos. By 1992, these rates had risen to 7.5 and 11.6 percent, respectively. In 1996, both had decreased; the total rate stood at 5.4 percent and the Latino rate at 8.9 percent.

The rates, however, vary among the national-origin subgroups. Cuban Americans’ unemployment rates have been almost as low as those of non-Latino White Americans, largely because of their above-average educational levels and accumulated work experience. By contrast, Mexican Americans and Puerto Ricans have generally experienced above-average unemployment. Puerto Ricans’ unemployment rates are usually twice as high as those of Cuban Americans. Some scholars claim that Puerto Ricans’ history of “circular migration” (their frequent returns to the island) tends to destabilize their employment.

Unemployment rates among Hispanic workers vary between nationalities. For example, 5.7 percent of Dominicans were unemployed in 2023, compared to 3.4 percent of Cubans and 3.6 percent for the country overall. Educational attainment also impacts employment rates.

Factors That Influence the Latino Labor Market

Education is one of the main factors that affect the labor market situation for Latinos. DeFreitas, after analyzing the trends in earnings of Latinos and non-Latinos from 1949 to 1979, found that those Latinos who were better educated were able to approximate the earnings of non-Latino White Americans in the 1960s.

Limited English ability is another relevant factor. Several empirical studies carried out in the 1980s found that language limitations could account for up to one-third of wage differentials between Latino and non-Latino White men. Other research has established that Puerto Rican and Cuban American men, who are concentrated in urban areas, tend to have lower participation rates in the labor force than men from the same national-origin subgroups with better English language skills. Mexican Americans, who are mainly operators, fabricators, laborers, and agricultural workers, have higher participation rates because those occupations do not require a good command of English.

Empirical studies have tried to establish the extent of discrimination suffered by Latinos in the labor market. According to the findings of a major study undertaken by the General Accounting Office (1990) to evaluate the effects of the Immigration Reform and Control Act of 1986, discrimination in hiring is practiced against “foreign-looking” or “foreign-sounding” applicants. In particular, an audit carried out as part of the study found that Hispanic job seekers were more likely than similarly qualified Anglos to be unfavorably treated and less likely to receive interviews and job offers. Consequently, discrimination could partially account for the higher Latino unemployment rates.

Self-employment may be a way to overcome unemployment, low wages, and obstacles to promotion. However, capital is required to start a business, and many low-income Latinos find it challenging to accumulate savings and are not likely to receive loans from credit institutions. Cuban Americans, who have a higher status background, opened many small businesses, creating an “ethnic enclave” of Latino businesses in Miami, Florida. The benefits of this type of social and economic arrangement have been highly debated. Some contend that it is an avenue of economic mobility for new immigrants; others argue that it may hinder their assimilation into society.

Bibliography

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