Hispanics faring worse on wages
 By Thomas Stauffer

They lag other groups with drops in pay for last 2 years, study says


Hispanics are driving U.S. job growth but are the only major group of workers to have suffered declines in wages for two consecutive years, a new study shows.
While Hispanic workers accounted for more than 1 million of the 2.5 million new jobs created in 2004, their average weekly wages fell 2.6 percent in 2004, according to the study, released Monday by the Washington, D.C.-based Pew Hispanic Center.
Wages also dropped 2.2 percent for Hispanic workers in 2003, when wages increased for whites, blacks and Asians, the study says.
"Recently arriving Hispanic immigrants were the leading source of new workers to the economy in 2004, so the most reasonable explanation would be that there is a lot of competition for unskilled jobs," said Rakesh Kochhar, a senior research associate with the Pew Hispanic Center.
A University of Arizona economist cautioned that the sample data used for the study are small enough to question their accuracy and added that immigrants arriving from any country face major barriers to earning good wages in the United States.
"A person today with Third World skills is going to work for the Third World wage, even in the U.S.," said Marshall Vest, director of economic and business research at the UA's Eller College of Management. "It just simply underscores the need for our educational system to work, and for people to gain all the employment skills they can."
Wages fall for three groups
Another surprise in this year's study for Kochhar was that despite impressive job growth in 2004, wages fell not only for Hispanics but also for whites and blacks, he said.
"Even though this was the first full year of job growth since the recession, it came packaged with wage declines for all three of those groups," Kochhar said. "What distinguishes Hispanics is that they saw a bigger drop in 2004, and also saw two successive years of decline."
Median weekly earnings dropped 1.8 percent for whites and 1.0 percent for blacks, according to the study. For Hispanics, weekly wages have fallen from $420 in 2002 to $411 in 2003 and $400 in 2004, the study indicates.
Low-skilled immigrants in general, and illegal immigrants in particular, face increasing obstacles to earning a livable wage, Vest said. The study did not offer separate results for legal and illegal workers.
"The takeaway from all of this should be that language deficiency and a lack of education and skills are major barriers for immigrants from any country, and an additional barrier is that illegals in many states are denied basic public services, including education," he said. "In that sense, the results are not surprising."
Sample "very, very small"
The center's results have to be interpreted with the understanding that the sample size for the study was "very, very small," Vest said. Most of the data in the report comes from the Current Population Survey, a monthly survey of about 60,000 households by the Census Bureau of Labor Statistics.
"It's such a small sample that it's hard to call it representative, and, on occasion, they end up with biased samples," Vest said. "So whenever I see the Current Population Survey as a source, that raises a red flag."
Kochhar said the survey is the official source of data for statistics published by the government and is "the best we have, and definitely the most comprehensive."
Other major findings of the report:
● Hispanic employment increased by 1 million workers, or by 6 percent, from the fourth quarter of 2003 to the fourth quarter of 2004.
● Gains in employment were driven especially by Hispanics who arrived in the United States in 2000 or later. The employment of this group increased by 914,000 in 2004 and accounted for more than one-third of the total job increases last year.
● Jobs requiring minimal formal education constituted 81 percent of the new jobs for foreign-born Hispanics and 76 percent of the new jobs for native-born Hispanics in 2004.
● Jobs requiring a college degree or more constituted 64 percent of the new jobs for native-born white workers in 2004.
Last May, Harvard University economist George J. Borjas released a report that concluded that two decades' growth in the supply of immigrant workers cost native-born American men of all ethnic and racial backgrounds an average $1,700 in annual wages by the year 2000.
The study found that U.S.-born Hispanics and U.S.-born blacks were the two groups that faced the most direct competition from foreign-born workers. Those groups had wage decreases of 5 percent and 4.5 percent, respectively.
Legal residents' competitors
"There is strong evidence that one of the groups most affected by continuing immigration is comprised of U.S.-born Hispanics and Hispanic legal immigrants that are already here," said Steven Camarota, director of research for the Washington, D.C.-based Center for Immigration Studies, which favors immigration restrictions. "The reason is you've got an increasing supply of labor where Latino employees are already heavily concentrated."
The study will no doubt be used by those who continue to play up immigration issues while at the same time downplaying important issues such as education and social services for U.S.-born Hispanics and legal Hispanic immigrants, said Lorraine Lee, vice president of Chicanos por la Causa in Tucson.
"The whole focus is about all these people coming across the border and taking advantage of us," Lee said. "We never hear about the U.S.-born Latinos and legal migrants that are participating in our system that have needs that we're not addressing in education, health care, health insurance and other important services."
● Contact reporter Thomas Stauffer at 573-4197 or at tstauffer@azstarnet.com.