Study: Hispanic Workers’ Wages Less than Whites

Dr. Alberto Dávila, dean of the Donald L. Harrison College of Business at Southeast Missouri State University, recently co-published a new study with the Economic Policy Institute (EPI) which examines the Hispanic-white wage gap among full-time workers.

In the study, Dávila and and his wife Marie Mora, professor of economics at the University of Texas Rio Grande Valley, determined the Hispanic-white wage gap has remained wide and relatively steady. Dávila and Mora examined earnings gaps between 1979 and 2016, including how they are affected by gender, Hispanic national origin, education level, birthplace, immigrant status and generational status.

Hispanics represent 18.1 percent of the U.S. population, which makes their labor market outcomes an important economic policy issue, Dávila and Mora said.

“Given that Hispanics make up nearly one of five people living in the U.S. and have been one of the fastest growing ethnic populations, it is important to understand how their labor market outcomes have fared relative to non-Hispanic whites,” Dávila said.

The study found that since 2000, the wage gap between Hispanic workers and their peers has remained practically unchanged. Hispanic men working full time made 14.9 percent less in hourly wages than white men in 2016, down marginally from a 17.8 percent difference in 2000. Hispanic women made 33.1 percent less than their white counterparts in 2016, down just slightly from a 35.1 percent difference in 2000.

The study examined factors that affect pay, including gender, education, experience and immigration status. While the wage gap between Hispanic men and white men narrows when these factors are controlled, the study found that wage gaps for Hispanic women remained steady.

“Having a better understanding about persistent male and female wage gaps is important because they reflect gender discrimination, and enforcing existing policies on such discrimination may improve the relative labor market outcomes of women,” Dávila said.

The study also found the level of education and types of jobs held by Hispanic workers made a difference in the wage gap. On average, Hispanics have less education than non-Hispanic whites, and this can affect the labor market, Dávila and Mora said.

“It is encouraging to see increases in their educational attainment over time, but they have not narrowed the gap with whites, who have also increased their educational attainment over time,” Dávila said. “Because the Hispanic population is growing faster than the non-Hispanic white population, we expect to see a larger share of the labor force lacking the skills employers might be looking for in many positions, which does not bode well for the future labor market.”

For further analysis, the study also examined how the earnings gap differs based on where Hispanic workers are from, including Mexican Americans, Puerto Ricans and Cuban Americans, as well as the difference in wages between men and women.

Their results highlight how Hispanics represent a heterogeneous population, Dávila said. This is important for future researchers and policymakers to understand that Hispanic subgroups can have stark differences from what is known about the overall Hispanic population, such as Mexican Americans versus Puerto Ricans or immigrants versus U.S. natives.

“A one-size-fits-all policy to address socioeconomic disparities for the overall Hispanic population would not be as efficient as more targeted policies, such as creating job training programs for Hispanic immigrants versus improving the quality of education for Hispanics born in the U.S.,” Dávila said.

The study’s findings can have a positive impact for researchers and policy makers in understanding wages, unemployment, labor force participation and education for Hispanics and encouraging further analysis.

“Given population projections, Hispanics are expecting to comprise an even larger share of the U.S. population in upcoming years, meaning their labor market outcomes will become an increasingly important component of U.S. economic growth and prosperity,” Dávila said.

For the full study, visit https://www.epi.org/publication/the-hispanic-white-wage-gap-has-remained-wide-and-relatively-steady-examining-hispanic-white-gaps-in-wages-unemployment-labor-force-participation-and-education-by-gender-immigrant/.