August 21, 2007

1995-2005: Foreign-Born Latinos Make Progress on Wages

IV. Native-Born Workers in the Wage Distribution

This section examines the employment of native-born workers grouped by race, ethnicity and wage class in 1995 and 2005. Like their foreign-born counterparts, native-born Latinos are more likely than average to be in the lower wage groups. Similarly, native-born Asians are more likely than average to be high-income workers. The wage profile of non-Hispanic blacks resembles that of Hispanics, and the earnings profile of non-Hispanic whites is similar to that of Asians. However, in the 1995 to 2005 period, there was little to no change in the position of native-born groups in the wage distribution.

Native-Born Hispanics More Likely to Be Low-Wage Workers

Of the 7.6 million native-born Hispanic workers for whom earnings data were available in 2005, 1.9 million, or 26%, were low-wage earners and 1.7 million (23%) were low-middle earners (Tables 10 and 11). When the two groups are combined, about 50% of native-born Latino workers placed below the middle of the wage distribution in 2005.

In 1995, earnings data were available for 5 million native-born Hispanics. Of that number, 1.4 million Latinos, or 27%, were low-wage earners and 1.1 million, or 23%, were low-middle earners. Thus, 50% of Latino workers were below the middle of the wage distribution in 1995. That proportion did not change by 2005.

Slightly more than one in 10 native-born Hispanic workers is a high-wage earner. There were 940,000 high-wage Latinos in 2005 and 579,000 in 1995. In both years, they represented 12% of the native-born Latino workforce. Hispanic representation in the middle-wage class is about as expected, with 22% of Latinos earning that wage in both 1995 and 2005.

Native-Born Asians More Likely to Be High-Wage Workers

Asians are more likely than any other racial or ethnic group to be high-wage workers. In 2005, 381,000 of 1.4 million native-born Asian workers, or 27%, were high-wage earners (Tables 10 and 11). This was about the same as the proportion of Asians (26%) who were high-wage workers in 1995. Combined with workers in the high-middle group (19%), almost half of Asians earned more than the middle-wage class in both 1995 and 2005.

Native-Born Whites Lean to High-Wage Employment

Native-born whites, the largest single group of workers, are more likely to be high-wage than low-wage workers. In 2005, 13.8 million native-born white workers, or 17% of the white workforce, were in the low-wage group and 18.5 million (23%) were in the high-wage group (Tables 10 and 11). These proportions were essentially the same in 1995, when 18% of native-born white workers were in the low-wage group and 22% were in the high-wage group.

Native-Born Blacks Lean to Lower-Wage Employment

Half of the native-born black workers were in the lower groups of the wage distribution in 2005, the same as in 1995. In particular, of 12.1 million native-born black workers, 3.2 million, or 26%, were low-wage earners in 2005 and another 3 million, or 24%, were low-middle earners (Tables 10 and 11). Those proportions were virtually unchanged in comparison with 1995. Almost 30% of black workers were in the two highest rungs of the wage distribution and that, too, was unchanged between 1995 and 2005.

Native-Born Whites Exceed Expectation in Gaining High-Wage Employment

Because the white population increased at a slow rate, the shares of white workers in the workforce, and the high-wage group in particular, were smaller in 2005 than in 1995. In 2005, native-born whites accounted for 66% of total employment and 75% of the high-wage workforce (Table 12). Both shares were less than in 1995, when native-born whites comprised 74% of the workforce and 82% of the high-wage group.

Even though the share of white workers in the high-wage group decreased, their actual number in that group in 2005 exceeded expectation. Based on demographic trends, 18 million native-born white workers were expected to be in the top wage class in 2005 (Table 13). But as white workers progressed up the wage ladder during the 10-year period, 18.5 million were in the high-wage group by 2005. Thus, 513,000 more workers than expected were in the highest wage class.

As native-born whites entered high-wage employment, they shed 747,000 low-wage workers and 663,000 middle-wage workers between 1995 and 2005. Much of that reduction accounted for the addition of 1.6 million native-born white workers in the high-middle group (estimate not shown in the table).