June 4, 2008

Latino Labor Report, 2008: Construction Reverses Job Growth for Latinos

IV. Changes in the Labor Force, 2006 and 2007

Hispanics are still the principal source of change in the U.S. working-age population and labor force. Immigration continues to drive much of the growth for Latinos, but its role in the past two years appears diminished in comparison with 2005 and earlier years. The U.S. working-age population (ages 16 and older) increased nearly 3 million from the first quarter of 2007 to the first quarter of 2008. That was about the same as the increase in 2006. However, the growth in the labor force, Latino as well as non-Latino, was slower in 2007 than in 2006.

The Working-Age Population

From the first quarter of 2007 to the first quarter of 2008, the working-age population in the U.S. increased by 2.6 million, or 1.1% (Table 1). That was only slightly less than the 2.7 million (1.2%) increase from the first quarter of 2006 to the first quarter of 2007.

The Latino working-age population is growing at a much faster rate. It increased by 1.1 million, or 3.5%, from the first quarter of 2007 to the first quarter of 2008. In the preceding one-year period the Latino working-age population increased by 1 million, or 3.5%. In both periods, Hispanics, who are 13.6% of the working-age population, accounted for much of the total increase in the U.S. working-age population: 38.7% of the total increase in 2006 and 40.8% in 2007.6

Labor Force Growth Slows

The growth in the labor force in 2007 slowed in comparison with the previous year. From the first quarter of 2007 to the first quarter of 2008, the U.S. labor force increased by 1.5 million workers, or 1.0% (Table 1). That was less than the 2.2 million workers who entered the labor force in 2006, an increase of 1.5%.

Both Latino and non-Latino workers contributed to the slower growth in the labor force. Non-Hispanics added 891,000 workers to the labor force in 2007 compared with 1.4 million in 2006. The Hispanic labor force increased 630,000, or 3.0%, in 2007, compared with 780,000 (3.9%) in 2006 and 898,000 (4.6%) in 2005.7

Nonetheless, changes in the labor force participation rate have been modest, and the relative stability in the labor force participation rate is a sign that workers are engaged in the labor market at about the same level as in the recent past.

For non-Hispanics, the rate nudged down from 65.4% in the first quarter of 2007 to 65.3% in the first quarter of 2008. The current rate is a notch higher than 65.2% in the first quarter of 2006.

For Hispanics, the labor force participation rate fell to 68.3% in the first quarter of 2008, from 68.6% in the first quarter of 2007. It is currently about the same as the 68.4% rate that existed in the first quarter of 2006.

Foreign-Born Hispanics in the Labor Force

Immigrants constitute the majority of the Latino working-age population and labor force. Not surprisingly, they are a key source of growth in the Latino labor force. However, their role seems diminished in comparison with previous years. Labor market data do not reveal the cause, but the current economic slowdown and increased immigration enforcement are likely to have contributed, at least in part, to this development.8

The Latino immigrant working-age population increased 462,000 in 2007 and 430,000 in 2006 (Table 2). That accounted for 43.0% and 41.1% respectively of the total increase in the Latino workforce. However, in 2005, the Latino foreign-born workforce had increased 784,000 representing 74.4% of the total growth for Hispanics.9

Reflecting changes in the population, foreign-born Latinos have accounted for less of the total growth in the Latino labor force in recent years. Immigrant Latinos added 325,000 workers to the labor force from the first quarter of 2007 to the first quarter of 2008, accounting for 51.6% of the total growth in the Latino labor force. That was slightly higher than the 318,000 workers they added from the first quarter of 2006 to the first quarter of 2007, accounting for 40.7% of total growth. But, in 2005, the immigrant Hispanic labor force had added 736,000 workers, or 82.0% of the increase in the Latino labor force.10

Labor force participation of immigrant Hispanics has been steadier than for the native born. From the first quarter of 2007 to the first quarter of 2008, the labor force participation rate of foreign-born Latinos was unchanged at 70.4%. However, the rate for native-born Latinos dropped from 66.7% to 66.0%. That reflected the fact that only 305,000 native-born Latinos entered the labor force in 2007 compared with 463,000 in 2006.

The decrease in labor force participation among native-born Latinos is not unexpected in view of the current economic slowdown. The fact that they tended to leave the labor market, but that immigrants did not, may be due to differences in the social safety nets available to each group. Many foreign-born Latinos are undocumented migrants and ineligible for most federal and state benefits. Moreover, there are restrictions on the availability of federal benefits to most newly arrived documented immigrants (Broder, 2007). Thus, compared with native-born workers, foreign-born workers may be less likely to leave the labor market in response to an economic slowdown.

Immigrants from Mexico were responsible for all of the increase in the Hispanic foreign-born labor force in 2007. The working-age population of migrants from Mexico increased 601,000 from the first quarter of 2007 to the first quarter of 2008 (Table 3). That compared with a total increase of 462,000 in the foreign-born Hispanic working-age population (Table 2). The difference was mainly accounted for by migrants from South America as their population fell by 293,000 workers in 2007. The same pattern characterizes the changing origins of the immigrant Latino labor force.

  1. See Appendix Table A1 for data on the labor market status of non-Hispanic whites, blacks, Asians and others.
  2. The estimates for 2005 are from unpublished Pew Hispanic Center tabulations of Current Population Survey data.
  3. Appendix Table A2 presents data on the labor market status of non-Hispanics by nativity.
  4. The estimates for 2005 are from unpublished Pew Hispanic Center tabulations of Current Population Survey data.
  5. This short-term development is also evident in data published by the Bureau of Labor Statistics (2008, 2007). An important difference between the data published by BLS and estimates in this report is that the BLS does not revise its estimates for annual revisions of the source data, the Current Population Survey. See Appendix A for more detail.