May 2, 2005

Latino Labor Report, 2004

I. Overview

Hispanic workers enjoyed significant gains in employment in 2004. But the concentration of Latinos in relatively low-skill occupations contributed to reduced earnings for them for the second year in a row. No other major group of workers has suffered a two-year decline in wages. Recently arrived Hispanic immigrants were a leading source of new workers to the economy but also among the principal recipients of wage cuts in 2004. And while the economic recovery in 2004 added many new jobs for Latinos and non-Latinos alike, it did little to reduce the differences between them in their occupational distributions. Job growth for Hispanics and whites, the two largest groups of workers in the economy, occurred mostly in different occupational clusters and they appeared to be on separate paths in the labor market.1

A Pew Hispanic Center analysis of the latest data from the Bureau of Labor Statistics and the Census Bureau finds that Hispanics maintained their role as a primary force of change in the labor market in 2004.2 The demand for immigrant labor remains high and the economy created jobs for nearly one million more foreign-born Latinos. One result has been a rapid decline in the Hispanic unemployment rate in the past 18 months. A key source of new jobs for all workers in 2004 was the construction industry.3 The broader recovery in 2004 also saw the addition of significant numbers of workers in eating, drinking and lodging services, educational services, hospitals and other health services, and professional services.

The vast majority of new jobs for Hispanic workers were in relatively low-skill occupations calling for little other than a high school education. In contrast, non-Hispanic workers secured large increases in employment in higher-skill occupations requiring at least some college education. This polarization contributed to a growing gap in earnings between Hispanic and non-Hispanic workers. The fall in wages for Latinos was greatest among immigrants who arrived in the United States in the past five years. Thus, the new immigrants who are enjoying significant growth in employment are doing so at the expense of lower wages. This trend is, no doubt, exacerbated by their concentration in occupations calling for minimal skills and education. Despite strong demand for immigrant workers, their growing supply and concentration in certain occupations suggests that the newest arrivals are competing with each other in the labor market to their own detriment.

Major findings of this report include:

  1. The terms Hispanic and Latino are used interchangeably in this report. The terms “whites” and “blacks” are used to refer to the non-Hispanic components of their population. The definition of immigrant is the same as the one used by the Bureau of Labor Statistics. Immigrants are persons born outside of the United States, Puerto Rico or other U.S. territories to parents neither of whom was a U.S. citizen. This represents a change from previous labor market reports issued by the Pew Hispanic Center which treated Puerto Ricans as immigrants based on their cultural identity with other foreign-born Hispanics.
  2. Most of the data in this report come from the Current Population Survey, a monthly survey of approximately 60,000 households conducted by the Census Bureau for the Bureau of Labor Statistics. The CPS contains detailed information on the demographic characteristics and labor market status of respondents.
  3. The terms “jobs” and “employment” are used interchangeably in the report although they are not necessarily the same—a single worker can hold more than one job and a job can be filled by more than one worker.