The diverse and growing Hispanic and Latino community in the United States accounts for about 18 percent of the overall population and is projected to comprise the majority of net new workers this decade. Most analysis of this community does not account for its rich diversity—largely due to data limitations or a lack of cultural understanding. However, by using the American Community Survey to understand the labor market experiences of the various populations within the Hispanic and Latino community, this column is a step toward changing that.
Employment outcomes and economic security differ within the Hispanic and Latino community. Differing experiences are due partially to colorism, with those with darker skin color more likely to experience discrimination. The story of many within the Hispanic and Latino community in the United States, particularly those of Mexican, Guatemalan, Honduran, and Salvadoran descent, is one of poor job quality: These groups, regardless of sex, experience higher employment per population rates than their non-Hispanic counterparts but are hindered by intersecting gender and ethnic wage gaps. Homogenizing the Hispanic and Latino community fails to appreciate and understand these experiences and prevents policy solutions that successfully target those most in need.
Policymakers must work to enhance this community’s economic security by increasing the quality of jobs most occupied by these groups—including by strengthening protections among child care and domestic workers and ending subminimum wages.
The Hispanic and Latino population within the United States is diverse
There are nearly 60 million Hispanic and Latino people with a wide variety of backgrounds living in the United States. (see Table 1) More than half of this population is Mexican, followed by Puerto Rican and Cuban. Most Hispanic and Latino people identify as white; however, 6 million Americans identify as Afro Latino. The many Hispanic and Latino identities reflect the history of slavery in the Colonial Americas.
The share of the Hispanic and Latino population that immigrated to the United States is higher than that corresponding population in the United States. Immigrants may face added complications finding quality employment; undocumented immigrants can be further limited in their job opportunities because they lack work authorization. However, two-thirds of Hispanic and Latino individuals living in the United States were born in the United States.
Immigration reform efforts are important but far from the only solution needed to build economic security for Hispanic and Latino workers.
Labor market experiences of Hispanic and Latino people
There are two key indicators of the labor market experiences of the Hispanic and Latino community: employment per population rate and the unemployment rate. Taken together, these data reveal that while many within this community experience high rates of employment, many more struggle to find employment.
Hispanic and Latino people have high employment rates
Hispanic and Latino men and women tend to have higher employment per population rates than non-Hispanic people of the same sex, including white, non-Hispanic people.
Figure 1
Hispanic or Latino men overall have the highest labor force participation rates by race and gender of any demographic combination in the United States, which can partly be attributed to their overall younger age. This is true for the various subgroups within the broader Hispanic and Latino community: Guatemalan men have the highest employment per population rate, followed closely by men from El Salvador and Honduras.
Among women, Bolivians, Paraguayans, and Peruvians have some of the highest employment rates. The fact that many within the Hispanic and Latino community have high employment per population rates, alongside large wage gaps detailed below, showcases the importance of job quality as opposed to job attainment. Within the Hispanic and Latino community, there is also a gender gap in employment, as women have lower employment rates than men. This gender gap is often larger among the various Hispanic and Latino subgroups compared with non-Hispanic populations.
Hispanic and Latino people have long faced higher unemployment rates than their white counterparts
Since the U.S. Bureau of Labor Statistics began collecting employment data by ethnicity, the unemployment rate among Hispanic and Latino people has always been higher than the white unemployment rate. Despite high employment per population rates, there are many more Hispanic and Latino people who would like to work but cannot find employment. Conversely, a group that had a lower unemployment rate would indicate that those who were not working were not actively looking for work. The Hispanic and Latino unemployment rate also differs considerably by country of origin—a fact that is not visible in the monthly published labor statistics, which only include the aggregate of the entire Hispanic and Latino community. (see Figure 2)
Hispanic and Latina women experience much larger unemployment rates than white, non-Hispanic men and women. Notably, Honduran, Paraguayan, Dominican, and Puerto Rican women experience the largest unemployment rates within the Hispanic and Latino community. (see Figure 2) Furthermore, while many Hispanic men experience a lower unemployment rate than non-Hispanic men and women, the same cannot be said for Mexican, Paraguayan, and Puerto Rican men.
Figure 2
The economic impact from COVID-19 on Hispanic workers
The Hispanic and Latino community was hit hard by the economic and health impacts of the COVID-19 pandemic. In April 2020, Hispanic women ages 20 years and older experienced the highest unemployment rate by gender, race, and ethnicity at 20.1 percent, and Hispanic men had the second highest rate at 16.5 percent. These high levels of unemployment are partly the direct consequence of occupational segregation and the overrepresentation of Hispanic men and women in in-person, low-wage occupations. According to the Women’s Bureau—a federal agency within the U.S. Department of Labor that represents the needs of wage-earning women—occupational segregation among Hispanic workers is associated with an “additional 2.8 percentage point decline in their employment-to-population ratio during the pandemic’s first few months.”
Thanks partly to the American Rescue Plan, passed by Congress and signed into law by President Joe Biden in March 2021 to provide people-centered investments and combat the economic fallout from the COVID-19 pandemic, Hispanic workers have regained employment faster during this economic recovery compared with the recovery following the Great Recession. In fact, the Hispanic unemployment rate experienced a record calendar-year drop. Nevertheless, pay gaps and occupational segregation caused by preexisting barriers persist—and gaps vary within the Hispanic and Latino community.
Hispanic and Latino workers are concentrated in low-wage occupations
Hispanic and Latino workers experience persistent and pervasive ethnic wage gaps compared with white, non-Hispanic men. Due to the consequences of compounding systems of oppression, namely, sexism and racism, Latina women experience even larger wage gaps.
Research shows that the wage gap between Hispanic women and white men can be explained by several factors, such as education levels, work experience, and immigration status. Different groups within the Hispanic and Latino community experience different wage gaps: Spaniards experience the smallest wage gap compared with white, non-Hispanic men, whereas Guatemalans, Hondurans, Salvadorans, Mexicans, and Dominicans experience the largest gaps. The latter groups are a large portion of the Hispanic and Latino community in the United States, as detailed above. (in Table 1)
Figure 3
These pay gaps are partially attributable to a legacy of colonialism and colorism, as well as the concentration and overrepresentation of these groups in different occupations. Some of the most common occupations among the Hispanic and Latino men who experience the largest wage gaps are construction laborers, drivers, and restaurant and janitorial workers. (see Table 2) Relatedly, the Hispanic or Latina women who experience the largest gender and ethnic wage gaps are commonly employed in care, domestic, and janitorial roles. (see Table 3)
Table 2
Hispanic and Latino workers with the largest pay gaps mostly work in critical sectors, and job quality in these sectors is crucial for the overall labor market and economic growth. For example, cooks, personal care aides, maids and housekeeping cleaners, and janitors and cleaners are some of the most common occupations among Hispanic and Latino workers; they are also in the top 20 occupations with the highest projected job growth in this decade.
Yet at the same time, many of these occupations are undervalued: Safety violations are rampant, and these jobs are often in low-wage, high-violation industries that can be vulnerable to misclassifications, which itself leads to wage theft. For example, in fiscal year 2021, the construction and food services industries had the highest values of back wages within all other low-wage, high-violation industries—industries that commonly employ Hispanic and Latino workers.
Deliberate policy choices caused the undervaluation of occupations typically held by Hispanic and Latino workers. These policy choices, rooted in racism and sexism, can be traced back to the Jim Crow systematic exclusion of domestic and agricultural occupations and their disproportionate employment of Black workers, as well as the various safety net measures and unionization from the New Deal that entrenched and perpetuated racial disparities. These exclusions have set a practice for the occupational segregation of workers of color into low-quality jobs today. Historically, Hispanic and Latino communities have been excluded from high-quality jobs, as they primarily entered the agricultural sectors upon immigrating to the United States. Today, many agricultural workers are still denied access to overtime and minimum wage protections.
Case study: Care and domestic workers
Care and domestic work, as well as child care and home care, are in the top five most common occupations for Mexican, Guatemalan, Honduran, Salvadoran, and Dominican women, who experience the largest ethnic and gender pay gaps. These positions are often low wage and have little access to benefits—another consequence of a history of excluding domestic workers from basic job protections.
Progress has been made in certain states to increase the quality of these jobs, most notably child care. In July 2021, California signed a statewide contract with Child Care Providers United (CCPU) to increase wage rates and add 200,000 subsidized child care slots. The CCPU has raised the regional market rate of child care in Sacramento more than 20 percent since 2014. In addition to raised rates, CCPU has also increased access to affordable child care for families and training for early educators. California joined New Mexico, Illinois, Connecticut, Minnesota, Maryland, New Jersey, Washington, Massachusetts, New York, Oregon, and Rhode Island in allowing negotiations between child care providers and the state for job protections.
The state of Washington and the Service Employees International Union (SEIU) 925 also signed a collective bargaining agreement with the intent to increase access to child care for working families and support child care providers. Additionally in Washington state, the Imagine Institute, which is an organization founded by a group of family child care providers and SEIU 925 to provide quality child care by supporting early education professionals, has implemented a substitute pool to provide relief to early education and care providers throughout the state. They have also enacted programming to assist these substitutes with training for licensed family child care providers and curriculum for anti-racist and trauma-informed early childhood education.
In California, SIEU Local 2015 is the largest union in the state, representing more than 400,000 long-term care workers, including home care, skilled nursing care, and assisted living center workers. These workers are primarily Black, Latina, Asian, and immigrant women who often experience low wages and lack access to basic benefits. In an effort to change this, SIEU Local 2015 has worked to raise wages for home care providers in California as well as provide job protections through contracts.
Case study: Tipped minimum wage
While Hispanic workers only make up 17 percent of the overall workforce, they represent 24 percent of tipped employees. Many of these tipped positions receive a subminimum wage that makes them particularly vulnerable to economic insecurity, as the employees may rely on tips. Hispanic and Latino workers often receive lower individual tips due to customer biases, as well as face discrimination and unfair treatment in the workplace.
While there is a long-overdue need at the federal level to eliminate the tipped minimum wage, efforts have already been undertaken at the state level. Currently, in an effort to make tipped-wage positions more equitable, Initiative 82 has been proposed in Washington, D.C., to gradually raise the tipped minimum wage of $5.05 to the standard minimum wage of $15.20 per hour by 2027. Under the District of Columbia Tip Credit Elimination Act of 2021, tips would be included on top of the minimum wage and those in tipped-wage jobs would be provided with more flexibility and financial security. This initiative will appear on the November 8 ballot in Washington.
Conclusion
The Hispanic and Latino community is a growing and critical population of the United States and the labor market. A more nuanced understanding of this community’s makeup is essential when discussing the experiences of its members, particularly in regard to the economy. In particular, collecting and utilizing data in a more inclusive manner can help move the conversation away from a monolithic viewpoint. For Mexican, Guatemalan, Honduran, and Salvadoran Americans, their experiences in the labor market tend to be one of poor job quality, with high employment rates but significant intersecting gender and ethnic wage gaps.
Policymakers must work to improve their economic security and can do so by improving the quality of jobs they are most likely to occupy.