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Hispanic Workers at Cutting Edge of Recession

Latino unemployment already trends two-thirds higher than that of whites — an ominous portent for bad times.
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If the United States is really in a recession, chances are Hispanic workers found out about it first. That’s because the nation’s Latinos have consistently higher unemployment rates than whites and are out of work for longer periods of time.

Those findings are contained in “Examination and Comparison of Hispanic and White Unemployment Rates,” a paper published in the Journal of Business Valuation and Economic Loss Analysis. Written by Angel Reyes, a Dallas lawyer, and three academics from Texas Tech and Augusta State universities, the study looked at white and Hispanic unemployment rates from 1976 to the present and found that not only was the Hispanic unemployment rate always higher than that for whites but that, overall, it surpassed the white rate by nearly 65 percent.

The study also found that Hispanics lose employment sooner in an economic downturn, have to deal with longer periods of unemployment and face what the paper calls a “riskier” labor market than whites, meaning they have to deal with a higher probability of being unemployed and greater job instability.

Although the paper deals only with the legal job market — “I don’t think the Bureau of Labor Statistics knows how to measure unemployment among the undocumented,” said Bradley Ewing, a Texas Tech professor of operations management and a study co-author — it provides a real insight into the problems facing the burgeoning Hispanic population in this country. That population is expected to represent 17 percent of the U.S. population by the year 2015.

If nothing else, the study is an affirmation of the “last hired, first fired” syndrome, which seems to affect Hispanics disproportionately. “The Hispanic work force is younger,” Reyes said, “and if you compound that with lesser educational attainment and less job training, that’s the perfect storm for why Hispanics remain out of work longer.”

“There may also be some discrimination” involved, Bradley added, noting that even though the unemployment gap seems to be closing, “if left to its own, it would take 30 years to close (entirely).”

Nevertheless, this narrowing unemployment gap is a positive sign because it reflects how Hispanics slowly but surely are integrating into the labor market. The work force is “becoming more integrated and more similar,” Bradley said, “but it is happening slowly. One of the reasons is sheer numbers, like here in Texas there is a large Hispanic population.”

In order to address this employment imbalance, the paper’s authors come down solidly on the public policy side of the issue, insisting that programs that address the divide need to be strengthened or put in place.

“If you say we don’t want that big of a gap,” Bradley said, “we suggest emphasizing policies that educate Hispanics in the labor force and increase job tenure. That’s one way to avoid getting laid off.”

“The important thing is increasing education, which increases productivity,” Reyes added. “In a competitive environment, firms look to more than seniority. If you have a person who is more productive, that person will keep their job.”

The question left open by the study, however, is whether or not there is a political will to correct these imbalances. Reyes believes there isn’t and that right now, Hispanic issues like immigration “tend to be more polarizing.” But he looks into the near future and notes the pressures entitlement programs like Medicare and Social Security will put on the economy.

“We will have to have a productive work force to maintain these benefits we have been promised,” he said. “And as the Hispanic labor force grows, it’s imperative that (the unemployment) gap close because they (Hispanics) will be part of funding those promised entitlements. If the will is lacking today, it will not be in four to eight years because we cannot afford to ignore it.”

Reyes is nothing if not pragmatic.

He feels the Democrats will be the first to address Hispanic issues because no matter who is elected president, “I think you will find 65 percent of Hispanics voting for the Democratic ticket this year, so when those numbers are put in front of you, you will play to your base.” (Ed. -- In fact, the actual Latino vote for Obama was 66 percent, according to a national CNN exit poll.)

But, Bradley added, “The biggest issue for the incoming president is the overall economic situation, and these (Hispanic) issues will be pushed back somewhat.”

This means that for the foreseeable future, the issue of Hispanic job security will most likely play out as it always has.

“Eventually, everyone joins the mainstream,” Reyes said. “They begin at the lowest rung of the labor force and eventually are integrated into the larger labor force.”

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