Why Latinos Have Been First to Make It Back to Pre-Recession Employment

Fifty percent of net new jobs since 2010 went to Hispanics. How come?

Reuters

Although Latinos make up only a seventh of the population, they have "racked up half the employment gains posted since the economy began adding jobs in early 2010", the Los Angeles Times reported this morning. In 2011, the trend accelerated. Of the 2.3 million jobs added in 2011 according to the Household Survey of the Bureau of Labor Statistics, 1.4 million, or 60 percent, were won by Latinos.

This remarkable statistic is a keyhole into America's two-speed recovery. One true story of the recession is that employment gains have been biased toward the highly educated. More than half of the jobs added in 2011 went to Americans with a college education. Another true story of the recession is that most of the other jobs have been low-paid and went to the less-educated. Educational attainment among Hispanics remains very low. Just 10% of foreign-born and 13.5% of native Latinos have finished college, placing the group's completion rate at about a third of the national average.

So how did Latinos become the first demographic group whose employment numbers returned to pre-recession levels? There are two big reasons: The immigration reason and the occupation reason.

Immigration: Latino unemployment is 10.5%. That's not much of a recovery. So how come it's also true that Latinos quickly recovered their pre-recession employment number?

The answer is that the unemployment rate is a ratio, and the denominator grew, since lots of Hispanics have moved into the U.S. According the BLS household survey, since January 2008, the Hispanic labor force has grown by 2.4 million. But the number of employed Latinos has grown by 1.2 million. So, although lots of Latinos have found work, a nearly equal number have showed up and not found work. It's important to point out that immigration is slowing: the U.S. population grew at its lowest rate in 70 years in 2011. But since immigrants are more mobile than native families, they're perhaps more likely to settle somewhere with greater job opportunities, unlike families who are stuck in Sun Belt areas with high unemployment and falling housing prices.

Occupation: The sectors where Latinos have greater-than-average employment (see the graph above) also tend to be among the fastest-growing sectors (see the graph below).* Health care, hospitality, retail, food manufacturing, and mining were among the top six sectors for jobs added in 2011. A part of this story is pay. As Steven Greenhouse reported, "73 percent of the jobs added since the recession ended had been in lower-wage occupations, like cashier, stocking clerk or food preparation worker," which are more likely to be held by Hispanics.

Finally, it's not just where they're working. It's where they're not working. As a group, Hispanics have low employment in local, state, and federal governments, which lost about 300,000 jobs in 2011, the vast majority of net job losses last year. The upshot is that Hispanics are growing as a population faster than other groups; more likely to work in states with growing jobs, such as Texas; more likely to seek out low-wage positions in health care and hospitality that are fast-growing industries; and less likely to be sitting in the way of the austerity bulldozer that took down total government in 2011.

*These numbers add up to 1.6 million, because they reflect data in the payroll survey, which is normally used to calculate jobs added, as opposed to the household survey, which is normally used to calculate the unemployment rate, although I've also mentioned it in the first paragraph above.