Closing Latino Labor Market Gap Requires Targeted Policies To End Discrimination

Additionally, nine of the 10 metropolitan statistical areas in the United States with the highest unemployment rates prior to the COVID-19 recession were majority Latino.

Closing Latino Labor Market Gap Requires Targeted Policies To End Discrimination

Washington, D.C. — A new issue brief from the Center for American Progress concludes that exogenous factors rather than personal choices are the reason why the Latino employment rate lags behind that of non-Hispanic white workers. Since 1976, when the U.S. Bureau of Labor Statistics first started tracking employment data by ethnicity, the Latino unemployment rate has generally remained between 1.6 and 1.9 times higher than the non-Hispanic white unemployment rate, and it has never dropped below a ratio of 1.2.

The brief finds that education, often touted as a great equalizer, does not protect Latinos from unemployment. In fact, Latinos face worse employment outcomes relative to their non-Hispanic white peers as they become more educated. Since 2000, the average annual prime-age unemployment rate for Latinos without a high school diploma was 4 percentage points lower than that for their white counterparts. But the annual prime-age unemployment rate for Latinos with at least a bachelor’s degree was actually 1.4 percentage points higher than that of their white counterparts over the same time period.

The brief also finds that occupational segregation has led to a situation in the United States in which Latinos disproportionately work in industries that are seasonal or susceptible to economic shocks, such as construction, food services, and agriculture. Also, a high percentage of Latino workers are foreign born, and evidence suggests that immigrant populations’ employment status is often more closely tied to to the business cycle than the employment status of nonimmigrants. Additionally, nine of the 10 metropolitan statistical areas in the United States with the highest unemployment rates prior to the COVID-19 recession were majority Latino.

The brief also finds that when Latinos are employed, they are often paid far less than their non-Hispanic white counterparts. The ratio of the prime-age median wage income between the latter and the former group has remained virtually unchanged since 2000, fluctuating between 1.6 and 1.5.

The brief recommends policy solutions that could help Latinos in the labor market and help to close the gap. They include:

  • Improving programs to counter labor market volatility, such as unemployment insurance, work sharing programs, and wage subsidies

  • Granting undocumented and noncitizen workers a pathway to legalization and citizenship and allowing them to access social insurance programs

  • Instituting paid sick and family medical leave policies

  • Improving Latino education outcomes and making higher education more affordable for Latinos

Still, the brief notes that “there is only so much that these targeted policies can do to increase Latino labor force participation and ease the transition period between jobs when so many of those making hiring and firing decisions hold discriminatory views against Latinos.” Surveys show that a substantial number of Latinos have been personally discriminated against when applying for jobs or when considered for raises or promotions.

“Both the coronavirus itself and the recession it generated disproportionately harmed Latinos,” said Ryan Zamarripa, associate director of Economic Policy at CAP and author of the brief. “At the same time, the crisis marks an opportunity to rebuild the economy in a way that prioritizes equity. Latinos represent an ever-increasing share of the labor force and disproportionately work in essential roles. They are too important to ignore.”

Read the issue brief: “Closing Latino Labor Market Gap Requires Targeted Policies To End Discrimination” by Ryan Zamarripa