A Warning Signaled for Latinos and Texas

R.G. Ratcliffe, Houston Chronicle, May 17, 2010

If the American Dream is upward economic mobility and arrival in the middle class, the grim statistics show only a small percentage of Texas’ Hispanics are on the road to success.

As the state’s Latino population continues to expand over the next two decades, if current trends stay the same, Texas is in danger of developing what one academic describes as a “permanent underclass.” Widespread poverty could pull down the standard of living for all Texans.

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Data from a variety of state and federal sources show the Hispanic population in Texas is economically stagnating and may be falling behind Latinos in other parts of the United States:

* Texas Hispanics not only make less money than Anglos, they make less money than Hispanics living in other states. The wage gap is broadest for Hispanics living on the border with Mexico, according to a report of Southwest Economy published by the Federal Reserve Bank of Dallas.

* Hispanics make up a third of the manual laborers in Texas. But U.S. Census statistics show that even in construction trades Hispanics account for less than a fifth of skilled labor, such as an electrician.

* In February, 34 percent of all Texans receiving unemployment payments from the Texas Workforce Commission were Hispanic. The payments are not available for undocumented workers.

* Texas native-born Hispanics have a higher high school dropout rate and a lower level of college attainment than those living in other states, Southwest Economy reported. The attrition rate among Hispanic high school students was 42 percent last year.

* Hispanic girls accounted for 62 percent of all births to teen mothers in 2006, the most recent year reported by the National Center for Health Statistics.

* One of the few bright spots in Texas is in housing. The government mortgage lending company Freddie Mac reports that 58 percent of the Hispanic households in Texas own their homes. Nationally, only half the Hispanic households own their home. But almost three-quarters of the Anglo families in Texas and nationally are homeowners.

Wage gap constant

Pia Orrenius, an economist with the Federal Reserve and co-author of the Southwest Economy study, {snip} said the wage gap in Texas has remained rather constant.

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Orrenius’ report said Texas Latinos had median hourly earnings of $11.54 in 2007-2009, about 64 percent of the earnings of non-Hispanic whites. But in other parts of the U.S., Latinos earned $12.42, or about 71 percent of the non-Hispanic whites.

She said that is due in part to factors such as a higher minimum wage in California than Texas. She said it also is due to the fact that Mexican immigrants generally have less education and most immigration in Texas is from Mexico.

Orrenius said when statistical analysis is done to equalize education between Hispanics and Anglos, the wage gap dramatically decreases.

“It’s not like its racism, where people are paying Latinos a lot less than whites,” Orrenius said. “They’re paid less because they have less education.”

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Signs of growth

Van de Putte said studies have found the Latino high school dropout problem is driven by boys who quit to go to work to support their families and girls who become teen mothers for the second time. She said there is a need for alternative school programs to help those students obtain high school diplomas.

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But Murdock [Steve Murdock, a former state demographer and former head of the U.S. Census] said the real numbers of Texas Mexican-Americans older than age 25 who have not completed high school will have grown by more than 400,000 in the past decade. If nothing changes, the percentage of the Texas workforce lacking a diploma will grow from 18 percent in 2000 to 30 percent by 2040, he said.

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