Latino Immigrant Earnings

How earnings for Latino immigrants vary in the top 100 U.S. metros

Maria E. Enchautegui
Topic: Employment
Data Source: ACS

U.S. cities have become symbols abroad of opportunity and prosperity. That's not surprising considering that 37 of the largest 100 economies in the world are U.S. metros. Immigrants to the United States often settle in these metro areas, but the opportunities available to them are not equal across cities.  Immigrants' economic achievement across metro areas could be affected by local economic conditions, the history of the immigrant group in that area and how the openness or restrictiveness of local policies toward immigrants influences their economic achievement.

Looking at Latino immigrants specifically, we find that 38 percent lived in the five most populous U.S. metros-New York, Los Angeles, Chicago, Dallas, and Houston-in 2010. Although Latinos have been dispersing to smaller metros and even rural areas, 88 percent of all Latinos still live in the largest 100 metros. So where are immigrant Latino communities thriving? And where, in comparison, are they struggling?

Latino immigrants in the 100 largest U.S. metropolitan areas earn an average of $26,497 a year, but this figure varies across cities and even within states. The map below shows average earnings of Latino immigrant workers age 18 and older, according to the 2008-10 American Community Survey. In only 10 metro areas do Latino immigrants make more than $30,000 on average. St. Louis boasts the highest average earnings at $35,556, followed by Poughkeepsie-Newburg-Middleton, New York, with earnings of $32,781. Latino immigrants earn less than $21,000 on average in five metro areas (Oklahoma City; Raleigh-Durham, North Carolina; McAllen-Edinburg-Pharr-Mission, Texas; Greenville-Spartanburg-Anderson, South Carolina; and Fresno, California).

In California, where the largest number of Latino immigrants lives, average earnings are highest in San Jose ($30,326), but lower than the national average in Bakersfield ($21,961) and in Fresno ($19,967). In Los Angeles, which has the largest population of Latino immigrants in the United States, average earnings are $26,032.

Using LA as a benchmark and taking into consideration age and educational level, we find that a Latino immigrant makes 20 percent more in Poughkeepsie-Newburg-Middletown, New York, than in LA. The Washington, D.C., metro area is also a good place to work, with average earnings 17 percent higher than in LA. In McAllen-Edinburg-Pharr-Mission, Texas, Latino immigrants earn 42 percent less on average than their counterparts in LA. In El Paso, Texas, Latino immigrants take home 28 percent less than they would in LA.

Compared with workers born in the United States, Latino immigrants make 37 percent less in all the top 100 largest metros. But it is important to take into consideration age and education in making these comparisons, because Hispanics are younger and also have a lower educational attainment than native workers.

When taking into consideration age and education, we find that Latino immigrants make 7 percent less than native workers, demonstrating how important education is to earnings. To narrow it down further, take a look at the 76 metro areas with large populations of Latino immigrants. In 40 of those metros, Latino immigrants make less money than natives of comparable age and education level. In the Texas border towns of McAllen and El Paso, wages are low for immigrants and native workers alike, but Latino immigrants still make 27 and 23 percent less, respectively. Rochester and New York City follow, with Latino immigrants earning 20 and 21 percent less than their native counterparts.

In three metro areas-Detroit; Omaha; and Greensboro, North Carolina-Latino immigrants fare better, earning 6 to 11 percent more than comparable native workers. In 33 metro areas, there’s little to no difference between the earnings of foreign-born and US born workers with similar age and education.

What should we make of this? Individual characteristics, like education level, matter, but don't fully explain the earnings gap. An immigrant group's history in the community also can affect economic achievement. Older, more established communities may be better able to navigate economic opportunities in the area, may have more organizations to help newcomers, and may have more inroads into local politics.

But place characteristics matter as well, including economic policies; demographic trends; and local immigration policies, such as whether Latino immigrants can get driver's licenses or can enroll in college, how employers verify an immigrant's eligibility to work, and what kind of access immigrants have to public benefits. Sorting out these place-based factors is increasingly important considering the growing diversity in state and local policies concerning immigrants. Policies restricting immigrant access to government benefits widen the economic distance between natives and immigrants, while policies such as local living-wage laws can reduce hardships on Latino immigrants.

Maria E. EnchauteguiMaria E. Enchautegui
Senior Research Associate
Income and Benefits Policy Center

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