Latinos and the Covid-19 Recession
October 20, 2020
The aim in this short essay is to address, at least superficially, some of the consequences of the ongoing Novel Coronavirus Recession on the Latino population. The definition of Latino for fiscal policy purposes has been established by the Office of Management and Budget (OMB) defining; "Hispanic or Latino as a person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin regardless of race". Consequently is also the one used for statistical purposes in the series for the populations 16 and 20 years old or older compiled by the Bureau of Labor Statistics and examined in the present brief document. Again the data corresponds to September of each year on a seasonally adjusted basis.
The top-left panel of Graph 1 shows the annual growth rate for the Latino population conveyed by the green bars and by the blue ones for the Non-Latino. While the average annual rate of growth between 1973 and 2020 for Latinos was 4.32% the one for Non-Latinos was 0.91%, moving to represent 17% of the total in 2020 from 4.1% in 1973, undeniably becoming an increasingly sizable minority, even without considering the large probability of significant under-counting over the decade of the 2010’s.
It seems that every ten years there is a large correction regarding the size of the Latino population. Definitely, in the graph (top-left panel) these very sizable abnormalities can be seen in 1980, 1990, 2000 and for 2010 it looks as if it was somehow delayed until 2012. This has a detrimental effect regarding public policy and legislative representation as the true number of Latinos appears to be always under-estimated. It is particularly distressing that amid the covid-19 crisis, the 2020 Census was conducted and even worse that recently an extension that would have recognized this obstacle allowing for a better count was disallowed by the Supreme Court, which will likely lead to a Latino under-count, being the population segment most negatively affected, throughout the 2020’s decade with a correction only possible until the next census in 2030.
The bottom-left panel of Graph 1 is about how Latinos have become an increasingly large portion of the U.S. population. The black line with the round marker shows the Latino population as a percentage of the total. The brown area represents Latino employment as a percentage of total employment while the light green area represents the Latino labor force as a percentage of the total labor force. Consequently, the difference between the green and the brown areas denotes a higher unemployment rate among Latinos than for the rest of the population. The graph also shows the problem of under-counting, with large corrections in all of the three variables, in the census years. Thus, undercounting not only affects population but labor force and employment. It is possible that the under-estimation is not proportionally similar for the three variables under consideration and therefore is leading to a Latino unemployment rate that may also be sub-estimated.
Notwithstanding the possible estimation problems highlighted in the previous paragraph, the Latino unemployment rate has been higher every year, since the existence of this series, than the one observed on the Non-Latino population as depicted by the red line in the top-right panel of Graph 1. This difference was highest in 1994, when Latino unemployment was 4.7 percentage points higher than for the rest of the population. As observed in other cases, when the Non-Latino population suffers the suffering is exacerbated among Latinos. That was the case in 1982 when the unemployment rate for Non-Latinos rose 32% while the rate for Latinos did by 51% to a record level of 14.4%. In 1994 the situation was even worse, as the unemployment rate for the rest of the population dropped to 5.5% from 6.4% in 1993, the opposite happened among Latinos with an increase from 10.0% to 10.1% as portrayed by the blue and green areas of the top-right panel of the graph. The gap between the two unemployment rates (red line) then fell to reach a low of 1.1 percentage points in 2006, rising again to 3.3 in 2009 and 2010 and dropping to its lowest level of only 1 point in 2019 which has since then climbed again to 3 points, similar to what was experienced during the Great Recession.
The bottom-right panel of Graph 1 portrays the Index of Participation for Non-Latinos by the blue line and for Latinos by the green line. The index corresponds to the change from year (t-1) to year t, from a base year equal to 100, of the share of population ith 16 years old or older employed in year t as a percentage of the total population ith 16 years old or older divided by the share of the population ith 16 years old or older employed in year t as a percentage of the total population 16 years old or older. In this case the base year is 1973 when the participation index for the two populations was set to 100.
Between 1973 and 1988 the Index for Latinos was on average 101 while the one for Non-Latinos was 102, leading to similar levels of relative participation, with a caveat. This caveat has to do with the fact that this participation index addresses only the problem of participation in terms of number of people employed (jobs held) and not with the quality of employment in terms of working conditions, types of jobs or relative remuneration. Despite these problems it begins to deal with the labor market problems faced by Latinos and the lag they face in terms of participation in just this respect.
The Latino index increased to an average of 102 between 1990 and 1999, while the one for Non-Latinos rose to 106 in the same period. After the 2000 census there was a substantive change in the Latino index reaching an average of 107 between that year and 2009 while the one for Non Latinos reached an average of 110 over the same period, showing a decreasing gap.
The positive trend was reversed between 2010 and 2019 when the average Latino index was 108 while the Non-Latino was 114 leading to an average gap of 6, the largest during the five decades since 1973. It further deteriorated in 2020 when the gap reached a record of 8 points between the Latino (108) and Non-Latino (116) indices, leading to lowers levels of welfare among the former population as their participation is hindered and as both income and wealth distributions surely worsened with respect to the rest during the last decade. No doubt that lower levels of participation as reflected merely by a persistent higher unemployment rate, without even beginning to address the problem of employment quality, will unavoidably produce the outcome just prescribed.
Table 1 compares the Labor market developments for the Latino and Non-Latino populations between 2019 and 2020. The current unemployment rate among Latinos, 16 years old or older, is 10.3% while the one for Non-Latinos of the same age cohort is 7.3%, with increases of 165% and 114% respectively, confirming the relatively larger effect of shocks to the economy on Latinos.
| Table 1 | |||||||||||||
| Labor Market (Population 16 years or older) | |||||||||||||
| September (Numbers in millions) | |||||||||||||
| 2019 | 2020 | 2020 - 2019 | 2020 / 2019 | Indicator | Latino | Non-Latino | Total | Latino | Non-Latino | Total | Latino | Non-Latino | Total | Latino | Non-Latino | Total |
| Total Population 16 years or older | 43.7 | 215.9 | 259.6 | 44.4 | 216.4 | 260.8 | 0.7 | 0.6 | 1.2 | 1.5% | 0.3% | 0.5% | |
| Employed | 28.2 | 130.1 | 158.3 | 25.8 | 121.7 | 147.6 | -2.3 | -8.4 | -10.7 | -8.2% | -6.5% | -6.8% | |
| Unemployed | 1.1 | 4.6 | 5.8 | 3.0 | 9.6 | 12.6 | 1.8 | 5.0 | 6.8 | 160.7% | 108.3% | 118.7% | |
| Labor Force = Employed + Unemployed | 29.3 | 134.8 | 164.1 | 28.8 | 131.3 | 160.1 | -0.5 | -3.4 | -3.9 | -1.7% | -2.5% | -2.4% | |
| Not in Labor Force | 14.4 | 81.1 | 95.5 | 15.6 | 85.1 | 100.7 | 1.1 | 4.0 | 5.2 | 7.9% | 4.9% | 5.4% | |
| Unemployment Rate = Unemployed / Labor Force | 3.9% | 3.4% | 3.5% | 10.3% | 7.3% | 7.9% | 6.4% | 3.9% | 4.3% | 165.2% | 113.7% | 124.0% | |
| Number of Jobs Lost | 2.7 | 8.8 | 11.5 | ||||||||||
| Jobs Lost % of Pop. 16 or older | 6.2% | 4.1% | 4.4% | ||||||||||
| Source: Bureau of Labor Statistics, Current Population Survey and Economic no nonsense calculations. | Note 1: Data is seasonnally adjusted by the Bureau of Labor Statistics. | Note 2: Non-Latino data and Number of Jobs Lost for Population 16 years or older were calculated by Economic no nonsense. | Note 3: Latino population includes persons of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin regardless of race. | ||||||||||
At the same time, of the total number of jobs lost between 2019 and 2020 (11.5 million), 24% (2.7 million jobs) were Latino despite being only 17% of the total population, again tolerating a larger brunt of the covid-19 recession. This calculation is conducted by assuming that if the participation and unemployment rates had remained stable while population grew 1.5% and 0.3%, then 28.6 million Latinos and 130.5 million Non-Latinos would be employed instead of the current 25.8 million and 121.7 million respectively.
By the same token an "implicit unemployment rate" can be computed yielding 13.1% for Latinos and 9.9% for Non-Latinos. It can be interpreted as the unemployment rate if participation rates had remained stable, meaning that currently there are 17.3 million unemployed instead of 12.6 million. It would also mean that current the "true unemployment rate" for the population, 16 years old or older would be 10.5% instead of 7.9%.
The participation rate (labor force/population) tends to be larger in the Latino population than in the Non-Latino segment. The explanation may be related to the age distribution, given that Latinos have a relatively smaller number of people 65 years old or older who tend to be retired and therefore not working or looking for work. It may also reflect a relatively poorer population that in the absence of wealth is required to be part of the labor force in order to survive.
Table 2 is an expansion of Table 1 in order to consider the male and female portions of the Latino and Non-Latino population. However, the data here is only for the population 20 years old or older, thus it is not strictly comparable with the one used so far for the population 16 years old or older. Nonetheless, the tendencies are expected to be similar.
However, the data for the Latino and Non-Latino populations between the ages of 16 and 19 can be derived from the two tables (1 and 2) as can be seen on
Table 3 by clicking here. Not only is the unemployment rate for Latinos 16 to 19 years old significantly higher than for the Non-Latinos but the phenomena observed earlier of increased burden during bad times for relatively less powerful groups, is also present in here. In fact, while the unemployment rate for the Non-Latino 16 to 19 year old population rose by 14% the one for Latinos did by 22% as depicted on the
table.
| Table 2 | |||||||||||||||||||||||||
| Labor Market (Latino and Non-Latino Populations 20 years old or older) | |||||||||||||||||||||||||
| September (Numbers in millions) | |||||||||||||||||||||||||
| 2019 | 2020 | 2020 - 2019 | 2020 / 2019 | ||||||||||||||||||||||
| Latino | Non-Latino | Latino | Non-Latino | Latino | Non-Latino | Latino | Non-Latino | ||||||||||||||||||
| Indicator | Male | Female | Total | Male | Female | Total | Male | Female | Total | Male | Female | Total | Male | Female | Total | Male | Female | Total | Male | Female | Total | Male | Female | Total | |
| Total Population 20 years or older | 19.7 | 20.0 | 39.7 | 97.4 | 105.8 | 203.1 | 20.0 | 20.3 | 40.4 | 97.7 | 106.2 | 203.9 | 0.3 | 0.3 | 0.6 | 0.3 | 0.4 | 0.8 | 1.5% | 1.6% | 1.6% | 0.4% | 0.4% | 0.4% | |
| Employed | 15.3 | 11.7 | 27.0 | 65.8 | 60.3 | 126.1 | 14.5 | 10.3 | 24.8 | 61.8 | 56.0 | 117.8 | -0.9 | -1.4 | -2.3 | -4.1 | -4.3 | -8.3 | -5.6% | -12.1% | -8.4% | -6.2% | -7.1% | -6.6% | |
| Unemployed | 0.5 | 0.5 | 0.9 | 2.2 | 1.9 | 4.1 | 1.4 | 1.3 | 2.7 | 4.7 | 6.1 | 10.8 | 0.9 | 0.8 | 1.7 | 2.5 | 4.3 | 6.7 | 192.8% | 171.4% | 182.2% | 110.6% | 231.1% | 165.4% | |
| Labor Force = Employed + Unemployed | 15.8 | 12.2 | 28.0 | 68.0 | 62.1 | 130.2 | 15.8 | 11.6 | 27.4 | 66.4 | 62.1 | 128.6 | 0.1 | -0.6 | -0.6 | -1.6 | 0.0 | -1.6 | 0.3% | -5.0% | -2.0% | -2.4% | 0.0% | -1.2% | |
| Not in Labor Force | 3.9 | 7.8 | 11.7 | 29.3 | 43.6 | 72.9 | 4.2 | 8.7 | 12.9 | 31.3 | 44.1 | 75.3 | 0.2 | 0.9 | 1.2 | 1.9 | 0.4 | 2.4 | 6.1% | 12.1% | 10.0% | 6.6% | 1.0% | 3.2% | |
| Unemployment Rate = Unemployed / Labor Force | 3.0% | 3.8% | 3.4% | 3.3% | 3.0% | 3.1% | 8.7% | 11.0% | 9.7% | 7.0% | 9.9% | 8.4% | 5.7% | 7.1% | 6.3% | 3.8% | 6.9% | 5.3% | 191.8% | 185.8% | 187.9% | 115.7% | 231.1% | 168.7% | |
| Number of Jobs Lost | 1.1 | 1.6 | 2.7 | 4.3 | 4.5 | 8.8 | |||||||||||||||||||
| Jobs Lost % of Pop. 20 or older | 5.4% | 7.9% | 6.7% | 4.4% | 4.3% | 4.3% | |||||||||||||||||||
| Source: Bureau of Labor Statistics, Current Population Survey and Economic no nonsense calculations. | Note 1: Data is seasonnally adjusted by the Bureau of Labor Statistics. | Note 2: Native and Foreign Born populations 20 years old or older. | Note 3: Data corresponds to September of each year. | ||||||||||||||||||||||
Coming back to Table 2 is easy to see the situation again. Here, Latino females endured the largest job losses, with 7.9% as a percentage of their own population cohort. For the population as a whole Latinos experienced a loss of 6.7% compared to 4.3% for Non-Latinos. A similar situation is present as regards to the unemployment rate suffering the largest increases in both cases, males and females.
Graph 2 complements Table 2 by representing the employment/unemployment situation in September of 2020 for the population 20 years old or older. The top-left panel corresponds to the entire population cohort, showing that 43% is not employed while of those employed (57%), approximately 10% are Latinos and 48% Non-Latinos. An alternative way to describe the top-left panel is to say that the U.S. population is composed of 10% employed and 7% not-employed Latinos and of 48% employed and 35% not employed Non-Latinos.
Notice, that the concept "not-employed" differs from the concept "unemployed" since for the latter to exist it is required to be a part of the labor, while the former simply refers to the number of people that are not employed or equivalently to the sum of those unemployed plus those not in the labor force, completely different situations.
The bottom-left panel of Graph 2 confirms the problem of Latino population undercounting. As can be seen in the left sub-panel (of the bottom-left panel) starting in 2008 there is a decrease in its growth rate which is only corrected well after the 2010 census in 2012. The right panels (top and bottom) mainly show that the percentage of the Latino population not employed (39%) is smaller than in the Non-Latino (43%), probably reflecting the questions of wealth and age distribution mentioned earlier in the case of the population 16 years old or older.
The graphical representation of the unemployment rate evolution among Latinos and Non-Latinos can be found on Graph 3 in this manner also complementing Table 2. The top-left, top-right and bottom-right panels show the unemployment rates for the Latinos and Non-Latinos, for females and for males Latino and Non-Latino respectively.
The bottom-left panel of Graph 3 plots the total number of not employed Latino males and females as percentage of the total Latino population. May be the most relevant aspect is how September of 2020 reached a record 39% of Latinos not employed, consistent with the observation on Graph 2. The previous record of 37% was achieved due to the Great Recession in 2009. Since that crisis, the percentage of Latinos not employed had been continuously declining until 2019 when it reached 32%.
Analogously to the population 16 years old or older, the unemployment rate for Latinos 20 years old or older has been consistently higher than the one for Non-Latinos. In the case of Latino males there were two exceptions in 2014 and 2019 when their unemployment rate dropped slightly below, being almost equal, the one borne by Non-Latino males (bottom-right panel) as depicted by the red line.
However, these are very uncommon exceptions to the normal situation where Non-Latinos have a considerable lower unemployment rate than Latinos. This consistency tends to worsen wealth distribution and overall well-being as a relatively higher number of people unemployed, belonging to a particular group of the population, are unable to take care of their basic needs and accumulate some wealth. The damaged caused by the anomaly is compounded considering that this population segment is the one with the largest proportion of children in the U.S.
