Racial Wealth Snapshot: Latino Americans
EDITOR'S NOTE: This is the fourth of a series of snapshots from Prosperity Now's Racial Wealth Divide Initiative providing key data on racial wealth disparities in America. The first snapshot looked at the racial wealth divide facing Black Americans, the second presents important facts for understanding how wealth divides play out at the intersection of race and gender and the third looks at the wealth outcomes of Asian Americans.
Latinos in the United States are those with ancestral roots from nations in the Americas whose primary language is of Latin origin, including Mexico, Central America, South America and much of the Caribbean.
Latinos are one of the largest and fastest-growing communities in the United States with a population of 56.6 million people. As of 2016, roughly 63 percent of Latinos were of Mexican descent, 9.5 percent were Puerto Rican, 3.8 percent were Salvadoran, 3.7 percent from Cuba, 3.3 percent Dominican and 2.4 percent were of Guatemalan origin. Many Latin Americans tend to reside in California, Florida, New York and Texas. California alone has a population of 15.3 million Latinos, the highest in the United States, followed by Texas, with 10.9 million Latinos and Florida, with 5.1 million.
Though America’s Latino population is growing, it is still one of the most socioeconomically insecure. In 2016, Latino Americans had a median income (in 2016 dollars) of $46,882, about 20 percent less than the national median, which is $59,039. This is about $8,000 more than African American median income ($39,490) and $18,000 less than White median income ($65,041).
Interestingly, foreign-born Latinos (34 percent of total Latino population) and native-born Latinos (66 percent) have very similar median incomes: $44,338 and $47,400, respectively. But a closer look at earnings by national origin reveals more substantial differences:
The poverty rate for Latinos decreased from 23.2 percent in 2008 to 19.4 percent in 2016. Yet, the poverty rate for non-Hispanic White Americans is only 8.8 percent, less than half the poverty rate of Latinos. For almost 40 years, the Latino poverty rate has consistently hovered around 20 percent, with a 1980 “Spanish Origin” poverty rate at 21.3 percent, a 22.3 percent poverty rate in 1990 and a 20 percent poverty rate in 2000.
Employment and Unemployment
The Latino unemployment rate has dropped from 5.6 percent to 4.7 percent between 2016 and 2017 while the national average unemployment rate was about 4.4 percent. 2017 data from the Bureau Of Labor Statistics shows that native-born Latinos have an unemployment rate of 6.8 percent, whereas foreign-born Latinos have a lower rate of 4.7 percent.
The difference in employment rates between foreign- and native-born Latinos could be due to the steady demand for blue collar jobs foreign Latinos fill because they have lower educational attainment. With respect to labor participation, White Americans sit right above the national average with 62.9 percent participation, while Latinos and Black Americans participate at a rate of 65.9 percent and 59.9 percent, respectively.
Latinas and Gender Inequality
Beginning with educational attainment, Latinas hold more bachelor’s degrees (16.8 percent) or higher compared to Latinos (13.8 percent), but they don’t earn as much as Latino men. According to census data, Latinas have a median income of $30,482, versus $35,069 earned by males. According to 2016 data from the American Community Survey (ACS), 7.5 percent of Latinas are unemployed and 19.5 percent of Latino households are led by women. By comparison, 9.4 percent of African American women are unemployed and 27.4 percent of African American households are led by women. Asian women have a 4.6 percent unemployment rate and 9.1 percent of Asian households are women-led. White women have a 4.7 percent unemployment rate and 9.9% rate for White women led households.
Latinos have the lowest attainment of bachelor’s degrees or higher. According to 2016 data from the American Community Survey (ACS), as of 2016, only about 15.3 percent of Latinos had a bachelor’s or higher. In contrast, 35.7 percent of Whites had a bachelor’s degree or higher, and 21.6 percent of African Americans and 49.7 percent of Asian Americans had the same. Foreign-born Latinos had a higher proportion of adults with less than a high school education at 28 percent compared to native born Latinos at 8 percent. Interestingly, foreign-born Latinos were just as likely as the native population to hold an advanced degree: 13 percent versus 12 percent among native-born Latinos.
In 2016, the wealth of a Latino household was only $6,300 compared to White Americans, who held $140,500. However, in 2015, Latinos accounted for some of the highest increases in homeownership – 69 percent of the net growth in the US. Currently, about 46 percent of Hispanic Americans own a home. Nevertheless, Latinos still lag behind White Americans, 72% of whom own a home. The Latino homeownership is slightly higher than that of African Americans, which is 40 percent.
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