Latinos’ Economic Gap Persists Over Time

Latino workers, who account for more than one-fourth of California’s labor force, lag far behind all other groups in wages and educational attainment, even through the third generation, according to a state report released Wednesday.

“So many of the issues that we all know about in the Latino community--the high dropout rates, the lower wage and employment levels--persist because so many folks falsely believe that time alone will solve them,” said Senate Majority Leader Richard Polanco (D-Los Angeles), who commissioned the report.

The 54-page report, “Latinos and Economic Development in California,” argues that it is in the state’s economic interest to encourage higher education for that growing segment of the work force.

If Latinos attained the same educational levels as the overall population, thus raising their wages, the state would gain $1.7 billion in income taxes from the additional $28 billion earned, according to the report. If educational levels were improved for just 5% of Latino workers, wages would increase by $1.4 billion.

The report, prepared by the California Research Bureau, was presented by prominent Republican and Democratic Latino legislators. It contradicts some widely held notions of Latino assimilation and movement into the middle class.

In 1998, Latinos accounted for 28% of California’s labor force but earned only 19% of its aggregate income. Earnings for Asians and blacks were at parity for their share of the population--12% and 6%, respectively. The gap was made up for by white workers, who were 53% of the state’s workers but earned 62% of its income.

Lower earnings and educational levels could not be explained solely by large numbers of Latino immigrants, although the gap was greatest for immigrants.

Native-born Latino workers also earned about $7,000 less than non-Latinos and were far less likely to finish high school or attend college.

Even in the third generation, there was a $5,400 gap between the median wage of Latinos and non-Latinos. Education accounted for most of that difference, according to the report. A high school diploma added about $5,000 in annual income for Latinos, and a bachelor’s degree added another $11,000.

In 1998, only about 10% of the state’s third-generation Latinos had a bachelor’s degree or higher, compared with 30% for non-Latinos. About 17% of third-generation Latinos had no high school diploma, compared with 6.7% of non-Latinos.

“The dropout rates were at crisis level when I was in high school and they are at crisis level today. Time alone will not change that. . . . And all Californians need to grasp why meeting these challenges is so important,” Polanco said.

Latinos are expected to comprise the largest group of workers by 2025, when they are projected to be 43% of the state’s population.

The report did not address reasons for the education gap, or possible remedies, beyond urging that the state set short- and long-term goals to encourage Latino students to graduate and attend college, and to help Latino workers return to school.

Although no legislation was proposed in conjunction with the report, the presence of legislators from both major parties, including the Latino Legislative Caucus and the Hispanic Republican Caucus, indicated a bipartisan willingness to back proposals addressing the problem.