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Section 7.2: Economy and Labor Market

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    208208
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    Economy and Household Income

    Figure \(\PageIndex{1}\) shows that the disparity between the real median household income (adjusted to 2016 dollars) of Latin@ families and white families has actually increased since 1970. In 1970, the disparity was about $12,000 and by 2016 the disparity had increased to over $17,000. Human Capital theorists would attribute this income disparity to lower average levels of educational attainment and job skills that translates into lower occupational status and income. Beyond human capital, the differences in income may also be explained by immigrant background, concentration in certain low-paying industries, and also gender and racial discrimination. More recently, Krogstad (2020) found that Latin@ families are among the most impacted by the Coronavirus pandemic in terms of reductions in pay and also job losses.
     

    Real median household income by race and Hispanic origin. The chart shows that the disparity between the real median household income (adjusted to 2016 dollars) of Latinx families and white families has actually increased since 1970.
    Figure \(\PageIndex{1}\): Real median household income by race and Hispanic origin: 1967 to 2016. (CC PDM 1.0; via U.S. Census Bureau)

     

    Economic Hardship and Wealth Disparities

    Considering the income disparities described above, it should come as no surprise that Latin@ families continue to experience economic hardships and wealth disparities compared the general U.S. population. Sherer and Mayol-Garcia (2022) found that with the exception of Colombian-origin families, Latin@ families report higher levels of food hardships, housing hardships, and bill-paying hardships.   They also found that net worth vary considerably across Latin@ subgroups. Although Cuban-origin families have the highest average net worth among Latin@ subgroups, their net worth is still less than half of the non-Latin@ median.   

     

    Latin@ Business Ownership: Positive Trends but Continued Challenges

    According to the 2023 Stanford Annual Report on Latino Entrepreneurship, there are positive trends with regard to Latin@ Owned Businesses (LOBs) in the United States with continued challenges, especially for women and immigrant owners. The authors report that among the 63 million Latin@s in the U.S. (now making up 19% of the total population), the total economic output was $3.2 trillion dollars. The total number of businesses now numbers 5 million and total revenue from LOBs is now $800 billion.   dollars. They also found that among tech-centric businesses, LOBs actually outperformed their white counterparts in "revenue growth and adoption of Artificial Intelligence", which represents an unexpected positive trend.  However,  when they analyzed  the gender of business owners, they found that Latina-owned businesses have lower revenue compared to their male counterparts and lower rates of loan approval from national and local banks. This demonstrates that Latinas experience  discrimination at the institutional level and provides yet another example of intersectional inequality.  

    The authors of this report also found mixed results when looking at immigrant owned businesses among Latin@s.  Although a majority of LOBs (52%) were actually owned by immigrants, they faced disadvantages such as reporting lower revenue compared to their U.S. born Latin@ counterparts and subsequent generations.  


    Contributors and Attributions

    Works Cited

    • Gill R. & Vasquez, C. (1996). The Maria Paradox: How Latinas Can Merge Old World Traditions with New World Self-Esteem. New York: Putnam.
    • Gomez-Aguinaga, B. et al. (2024). 2023 State of Latino Entrepreneurship. Stanford Latino Entrepreneurship Initiative. March 2024.
    • Gonzalez-Lopez, G. & Vidal-Ortiz, S. (2008). Latinas and Latinos, sexuality and society: A critical sociological perspective in Latinas/os in Rodriguez, H. et al (Eds.). 2008. The United States: Changing the Face of America. New York: Springer. p. 308-322.
    • Krogstad J.M., Gonzalez-Barrera A., & Noe-Bustamante L. (2020). U.S. Latinos among hardest hit by pay cuts, job losses due to Coronavirus. Pew Research Center.
    • Krogstad J.M. & Lopez M.H. (2014, September). Hispanic immigrants more likely to lack health insurance than U.S. born. Pew Research Center.
    • Landale N., Oropesa R., & Bradatan C. (2006) Hispanic families in the US: Family structure and process in an era of family change. in Tienda, M. & Mitchell, F. (Eds.). 2006. Hispanics and the Future of America. Washington, DC: National Academies Press
    • Light M., He J., & Robey J. (2020, December). Comparing crime rates between undocumented immigrants, legal immigrants, and native-born US citizens in Texas. Proceedings of the National Academy of Sciences of the United States of America.
    • Myers, D. (2007). Immigrants and Boomers: Forging a New Social Contract for the Future of America. Russell Sage.
    • Sherer, Z. and Mayol-Garcia. (2022). "Hardships and Wealth Disparities across Hispanic Groups". U.S. Census Bureau 2022 Report
    • Educational attainment of Hispanic population in the U.S. (2019). Pew Research Center.
    • Vigdor, J. (2008). Measuring immigrant assimilation in the United States. Manhattan Institute.

    This page titled Section 7.2: Economy and Labor Market is shared under a CC BY-NC-SA 4.0 license and was authored, remixed, and/or curated by Carlos Ramos.

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