New Lows From New Highs
The long-term effects of the recession will likely depress employment and incomes in Hispanic communities at least through the end of 2004, and judging from historical experience that time span will be longer than for any other major population group. Even if predictions of a turnaround later this summer prove valid, pocketbook issues will vex Latinos for several years after the national economy recovers. Second-generation Latinos–U.S.-born children of an immigrant parent– are now experiencing high job losses. In recent recessions Hispanic unemployment has fallen hardest on low-skilled immigrants. This time, young people who are the products of U.S. schools are experiencing the highest unemployment rates among Latinos. Many work in skilled occupations, including managers, technicians and professionals, and many are in the early years of household formation. Prolonged joblessness could prove a historic setback for them, their communities and the nation.
Other major findings:
• The heaviest job losses for Latinos so far are concentrated in manufacturing and the retail trade, which together account for 40 percent of all Hispanic unemployment. The second generation, Latinos of Mexican origins and women have been hardest hit overall.
• Hispanic unemployment rates are high in the hospitality industry, as well as in transportation, sectors hard hit by the terrorist actions of 9/11. However, only a small portion of the Latino workforce is employed in these industries.
• California and New York, home to about half of all Hispanic workers, have Latino unemployment rates that are a full percentage point higher than the Latino rate nationally. Job losses for Latinos in New York City could reach as high as 15 percent by the end of 2002.
• Using the average of the Blue Chip Indicators of 50 leading econometric forecasts, Hispanic unemployment nationally is projected to hit 8.5 percent in the second quarter of 2002 before leveling off. It will begin to fall again in the fourth quarter of 2002 but will not recover
its pre-recession levels until 2004. Under less optimistic scenarios, Hispanic unemployment could peak at approximately 10 percent in 2003. That would mean some 1.5 million Latinos out of work a year from now compared with 927,000 a year ago.
• Despite considerable economic gains in the late 1990s, the bulk of the Latino population has few resources to weather the recession. On average, household savings and other assets are minimal.
• Access to public safety-net programs such as unemployment insurance and food stamps are limited by labor conditions and eligibility requirements. Out of 1.26 million unemployed Latinos in December 2001, only 40 percent are likely to be receiving UI benefits, leaving some
756,000 in the cold.