Latino Jobs Growth Driven by U.S. Born

Hispanic Center

JUNE 19, 2014

Immigrants No Longer the Majority of Hispanic Workers

BY Rakesh Kochhar

For the first time in nearly two decades, immigrants do not account for the majority of Hispanic workers in the United States. Meanwhile, most of the job gains made by Hispanics during the economic recovery from the Great Recession of 2007-09 have gone to U.S.-born workers, according to a new Pew Research Center analysis of government data.

Immigrants No Longer the Majority of Latino WorkersIn 2013, 49.7% of the more than 22 million employed Latinos were immigrants. This share was down sharply from the pre-recession peak of 56.1% in 2007. Although Latinos have gained 2.8 million jobs since the recession ended in 2009, only 453,000 of those went to immigrants. Moreover, all of the increase in employment for Latino immigrants happened in the first two years of the recovery, from 2009 to 2011. Since then, from 2011 to 2013, the employment of Latino immigrants is unchanged.

This development is mostly due to the waning inflow of Hispanic immigrants. The Great Recession, a tepid jobs recovery, tighter border controls and more deportations have served to mitigate migration to the U.S. from Latin America, especially Mexico, in recent years.1 Since the recession started in December 2007, the growth in the Latino immigrant workforce (people ages 16 and older) has slowed dramatically even as the Latino U.S.-born workforce continues to expand at a rapid pace.

The diminished role of Latino immigrants is in stark contrast to trends prior to the Great Recession, and the boom and bust in the U.S. housing market is a key factor. From 2004 to 2007, during the height of the construction boom, immigrant Latinos gained 1.6 million jobs, two times the 829,000 new jobs secured by U.S.-born Latinos.2 During the recession, the construction sector alone let go of 520,000 Latino immigrants, with foreign-born Latinos losing 340,000 jobs overall.3 None of the construction jobs have come back for immigrants. Among foreign-born Latinos, the share working  in construction fell from 19% in 2007 to 15% in 2009 and has stayed at about that level.

It is likely that the share of the Latino workforce that is U.S. born will continue to increase. The U.S. born currently account for most of the growth in the Latino population, and it is uncertain that Latino migrants will return to the U.S. workforce in larger numbers. Some leading economists are of the view that the U.S. has entered a new era of slower economic growth.4 If so, jobs growth in the future may not be strong enough to reinvigorate immigration from Latin America. The future direction of U.S. immigration policy is also unknown. Finally, demographers have noted that sharp declines in birth rates in Mexico and other Latin American countries may ease the pressure to emigrate to the U.S. in the longer run.5

Although the inflow of Hispanic immigrants into the U.S. labor market has diminished since the start of the Great Recession, the role of immigrants overall continues to expand. The baton is now in the hands of non-Hispanic migrants, whose inflow—less driven by unauthorized inflows and less dependent on construction sector jobs—is unaffected by the recession. From the fourth quarter of 2009 to the fourth quarter of 2013, the working-age population of Hispanic immigrants increased by only 382,000, while that of non-Hispanic immigrants increased by 2.3 million. The growth was sufficient to increase the share of all immigrants in U.S. employment from 15.8% in 2009 to 16.5% in 2013.

The Jobs Recovery for Hispanics Is Driven by Demographics

U.S.-born Latinos Gain More Jobs than Immigrant Latinos in the Economic RecoveryLatinos overall have more than made up for the jobs they lost during the recession in terms of numbers, though not necessarily in the share that are employed. That is because jobs growth for Hispanics is just keeping pace with the growth in their working-age population.

Overall, Hispanics secured 2.8 million new jobs from the fourth quarter of 2009 to the fourth quarter of 2013, well in excess of the 378,000 jobs lost during the recession. The growth in Hispanic employment accounted for 43.4% of the total jobs growth of 6.4 million in the U.S. economy from 2009 to 2013. That was similar to the contribution of Latinos (43.6%) to the growth in the U.S. working-age population over the time period.

Meanwhile, U.S.-born Hispanics gained 2.3 million jobs in the recovery, compared with a loss of 37,000 jobs in the recession. For Hispanic immigrants, the 453,000 jobs gained in the recovery are not notably greater than the 340,000 jobs lost in the recession.

But the seemingly strong recovery for Hispanics is more about demographics than good economic fortune. Because jobs growth and population growth are proceeding at similar rates, the proportion of Hispanics with jobs barely edged up in the recovery, from 59% at the end of 2009 to 60% at the end of 2013. The share employed in 2013 is still less than the 64.3% share employed at the start of the recession.

The Unemployment Rate Among Hispanics Has Fallen in the Recovery ...The Latino unemployment rate decreased during the recovery, falling to 8.8% in the fourth quarter of 2013 from 12.7% in the fourth quarter of 2009. But some of this decrease is likely due to discouraged workers leaving the workforce and therefore no longer being counted as unemployed. Moreover, the unemployment rate for Hispanics remains greater than the 5.9% it was at the start of the recession in the fourth quarter of 2007. Even more progress is to be made before the Hispanic unemployment rate matches its historic low of 5% reached in the fourth quarter of 2006.

The unemployment rates for both U.S.-born and immigrant Latinos are still higher than their levels in 2007. For U.S.-born Latinos, the unemployment rate increased from 6.8% in the fourth quarter of 2007 to 13.8% in the fourth quarter of 2009, and it retreated only to 10.3% by the fourth quarter of 2013. The unemployment rate for Latino immigrants increased from 5.2% in 2007 to 11.8% to 2009, and it had fallen to 7.2% by the end of 2013.

Jobs Growth for Hispanics Is Concentrated in Traditional Industries

Most of the job growth in the recovery for Hispanics has come from industries in which they are traditionally concentrated. About half of Hispanic workers are employed in just four industries—construction; eating, drinking and lodging services; wholesale and retail trade; and professional and other business services. These four industries were also at the center of employment change for Hispanics during the recession and the recovery.

In the construction sector, Hispanics lost 686,000 jobs during the recession and regained only 74,000 of those jobs in the recovery. However, in the other three industries—eating, drinking and lodging services; wholesale and retail trade; and professional and other business services—Hispanics gained jobs during both the recession (236,000 in the three industries combined) and the recovery (1.3 million). These three industries accounted for 45.5% of the jobs growth for Hispanics from 2009 to 2013.

Changes in Earnings Among Hispanics

Median Weekly Earnings Among Hispanics Are StagnantThe earnings of Hispanic workers have risen modestly since 2007. For full-time Hispanic workers, the median weekly wage in the fourth quarter of 2013 was $570, compared with $556 in the fourth quarter of 2007 (in fourth-quarter 2013 dollars), an increase of 2.5%.

But the estimated increase in earnings for all full-time Hispanic workers is a misleading indicator of economic gain. Considered separately, the median weekly earnings of U.S.-born Hispanics working full time fell from $684 in 2007 to $640 in 2013, a loss of 6.4%. Meanwhile, the earnings of foreign-born Hispanics working full time were unchanged at about $500.

So why did wages for Hispanics overall increase from 2007 to 2013 if neither U.S.-born nor foreign-born Hispanics experienced an increase? The answer lies in the changing composition of the Latino workforce. Because Hispanic immigrants earn less than U.S.-born Hispanics, their retreat from the U.S. workforce raises the estimated earnings of Latinos overall.

This report focuses on employment, unemployment and earnings among Hispanics and non-Hispanics, both U.S. born and foreign born, during the Great Recession and the economic recovery. The report also describes labor market outcomes for whites, blacks and Asians, and it analyzes the sources of jobs growth by industry for the different groups of workers. The recession is defined as the two-year period from the fourth quarter of 2007 to the fourth quarter of 2009.6 The recovery is the four-year period from the fourth quarter of 2009 to the fourth quarter of 2013. An update on labor market trends through the first quarter of 2014 is provided below.

Employment and Unemployment in 2014

This report examines trends in the U.S. labor market from the fourth quarter of 2007 to the fourth quarter of 2013. Because the underlying data are not seasonally adjusted, employment, unemployment and earnings in a given year are always compared with the same quarter in another year. That ensures that seasonal fluctuations are not affecting the results. For that reason, the analysis, which begins with the start of the recession in the fourth quarter of 2007, ends with the fourth quarter of 2013.

Is there anything that can be said about labor market trends through 2014? Since the Bureau of Labor Statistics does not publish seasonally adjusted data for many of the demographic groups included in this study, e.g., for immigrants the analysis cannot be fully extended through the first quarter of 2014. However, the BLS seasonally adjusted data for all workers and for Hispanics show that the pace of the recovery may have picked up in 2014.

For Hispanics, the seasonally adjusted unemployment rate fell from 8.7% in the fourth quarter of 2013 to 8.1% in the first quarter of 2014. For workers overall, the unemployment rate dropped to 6.7% in the first quarter of 2014, down from 7% in the fourth quarter of 2013. The employment rates and labor force participation rates for both groups of workers also showed signs of improvement. Nonetheless, these major labor market indicators still have much ground to cover to get back to their pre-recession levels.

Other main findings of this report include:

All Workers

  • The economy lost 7.7 million jobs in the recession, from the fourth quarter of 2007 to the fourth quarter of 2009.
  • Only 6.4 million jobs have been restored in four years of economic recovery, from the fourth quarter of 2009 to the fourth quarter of 2013. That still leaves the labor market about 1.4 million jobs short compared with the start of the recession in late 2007.
  • The employment rate—the share of the working-age population that is employed—edged up from 58.2% at the end of 2009 to 58.7% at the end of 2013. At the start of the recession in late 2007, the employment rate was 62.8%.
  • The economic recovery has lowered the unemployment rate from 9.6% in 2009 to 6.7% in 2013. Nonetheless, it remains higher than the pre-recession rate of 4.6% at the end of 2007.

Immigrant and U.S.-born Workers

  • Immigrants overall gained 2.1 million jobs in the economic recovery from 2009 to 2013, more than making up for the loss of 0.9 million jobs in the recession from 2007 to 2009. Even so, their employment rate rose modestly, from 60.5% in 2009 to 61.7% in 2013, and is still less than its 65% level in 2007.
  • U.S.-born workers added 4.3 million jobs in the recovery from 2009 to 2013, but they had lost 6.9 million jobs in the recession. Their employment rate is essentially unchanged in the recovery, standing at 58.1% in 2013 compared with 57.8% in 2009, and it remains less than its 62.5% level in 2007.
  • The unemployment rate for immigrants was 6.5% at the end of 2013, down from 10.2% at the end of 2009. Meanwhile, the unemployment rate for U.S.-born workers fell from 9.5% to 6.7%. The rate for each group was 4.6% at the start of the recession in 2007.

Whites, Blacks and Asians

  • Whites gained 1.7 million jobs in the recovery from 2009 to 2013 after losing 6.2 million jobs in the recession. Blacks gained 853,000 jobs in the recovery, less than the 1.1 million they lost in the recession. Jobs growth for Asians in the recovery—1.2 million—outdistanced the modest loss of 103,000 jobs in the recession.
  • The different experiences in jobs growth mirror differences in population growth. The Asian working-age population increased by 14.4% from 2009 to 2013, compared with only 1.6% for whites and 3.3% for blacks. In consistent fashion, the employment of Asians increased by 16.7% from 2009 to 2013, compared with 1.8% for whites and 5.9% for blacks.
  • With jobs growth reflecting population growth, the shares of people employed did not improve much for any group during the economic recovery. At the end of 2013, the employment rate was 59.3% for whites, 53.2% for blacks and 60.9% for Asians. At the end of 2009, when the recovery started, the employment rates had been 59.2% for whites, 51.9% for blacks and 59.7% for Asians. The employment rates for all groups are still less than their 2007 levels.
  • Unemployment rates for all racial groups fell during the economic recovery, down from 8% in 2009 to 5.2% in 2013 for whites, from 15.6% to 12.1% for blacks, and from 7.8% to 5.2% for Asians. When the recession started in 2007, the rates had been 3.7% for whites and Asians, and 8.6% for blacks.

Jobs Growth by Industry

  • The top three industries that led in jobs growth in the recovery from 2009 to 2013 are professional and other business services (1.7 million new jobs), hospitals and other health services (991,000 new jobs) and durable goods manufacturing (974,000 new jobs).
  • Hispanics found the greatest number of new jobs in the recovery in eating, drinking and lodging services (497,000 new jobs), wholesale and retail trade (401,000), and professional other business services (357,000).
  • For non-Hispanics, the leading sources of new jobs in the recovery were professional and other business services (1.3 million new jobs), hospitals and other health services (825,000) and durable goods manufacturing (725,000).
  • Total employment in the construction sector fell from 11.8 million in late 2007 to 9.4 million in late 2009. It was still at 9.4 million at the end of 2013.

Wages

  • The median weekly wage for all full-time workers was $785 in the fourth quarter of 2013, compared with $777 in the fourth quarter of 2007 (expressed in fourth-quarter 2013 dollars).
  • For full-time non-Hispanic workers, the median weekly wage increased from $823 in late 2007 to $840 in late 2013.
  • The median weekly wage of immigrants rose from $623 at the end of 2007 to $646 at the end of 2013. This was driven by gains for non-Hispanic immigrants; the median wage of Hispanic immigrants is unchanged since 2007.
  • The median weekly wage of full-time white workers increased from $856 in the fourth quarter of 2007 to $876 in the fourth quarter of 2013. Wages for full-time black and Asian workers in 2013, $640 and $923, respectively, were about the same as their levels in 2007.

The next section of this report describes economy-wide employment and unemployment trends during the Great Recession, from the fourth quarter of 2007 to the fourth quarter of 2009, and four years of recovery, from the fourth quarter of 2009 to the fourth quarter of 2013. Subsequent sections analyze trends among Hispanics and non-Hispanics, immigrant and U.S.-born workers, and for whites, blacks and Asians. The final two sections discuss changes in employment by industry and changes in the earnings of different groups of workers during the recession and the recovery. Methodological details and supplementary data tables are presented in the appendices.

About this Report

This report focuses on employment, unemployment and earnings among Hispanics and non-Hispanics, both U.S. born and foreign born, during the Great Recession and the economic recovery. The report also describes labor market outcomes for whites, blacks and Asians, and it analyzes the sources of job growth by industry for the different groups of workers. The recession is defined as the two-year period from the fourth quarter of 2007 to the fourth quarter of 2009. The recovery is the four-year period from the fourth quarter of 2009 to the fourth quarter of 2013.

The data for this report are derived from the Current Population Survey (CPS), a monthly survey of about 55,000 households conducted jointly by the Bureau of Labor Statistics (BLS) and the Census Bureau. Most of the analysis is conducted on a quarterly basis as data from three monthly surveys were combined to create larger sample sizes for individual groups of workers. Some estimates are based on annual files constructed from 12 monthly CPS surveys. Unless otherwise noted, the quarterly estimates in this report are not seasonally adjusted.

Estimates in this report are adjusted for annual technical revisions to the CPS and the benchmarking of survey weights to the 2010 Decennial Census. Thus, they do not match estimates published by the BLS that are not similarly revised (Appendix A provides details on this issue). Also, employment estimates in this report are from a survey of households and will not match the payroll estimates of employment published by the BLS from its surveys of employers. Payroll data cannot be used in this report because, except for gender, they do not record the demographic characteristics of workers.

This report was researched and written by Rakesh Kochhar. Jeffrey S. Passel contributed data analysis to the report, and Anna Brown assisted with data preparation. The author thanks Mark Hugo Lopez and Claudia Deane for comments and editorial guidance on earlier drafts of the report. Brown number-checked and formatted the report, and she and Michael Keegan produced the charts and tables. Marcia Kramer of Kramer Editing Services was the copy editor. Find related reports from the Pew Research Center’s Hispanic Trends Project online atpewresearch.org/Hispanic.

A Note on Terminology

The terms “Latino” and “Hispanic” are used interchangeably in this report.

All references to whites, blacks and Asians are to the non-Hispanic components of those populations. Whites, blacks and Asians are single-race-only groups. Asians include Native Hawaiian and Pacific Islanders.

“U.S. born” refers to those who are U.S. citizens at birth, namely people born in the U.S., Puerto Rico or other U.S. territories and those born abroad to at least one parent who was a U.S. citizen.

“Foreign born” refers to people born outside the U.S., Puerto Rico or other U.S. territories to parents neither of whom was a U.S. citizen.

The terms “foreign born” and “immigrant” are used interchangeably.

The term “unauthorized immigrant” is used to describe immigrants who are living in the U.S. illegally.

The terms “working-age population” and “workforce” are used interchangeably in the report to refer to the population of people ages 16 and older.

The term “labor force” refers to people ages 16 and older who are either employed or looking for employment.

Unless otherwise specified, the estimates in this report are nonseasonally adjusted and refer to the fourth quarter of each year. On occasion, these fourth-quarter estimates are referenced simply by the year. For example, an estimate for the fourth quarter of 2007 may be referred to as an estimate for 2007.


--