July 1, 2014

Wage gap between high and low earners rising most among Hispanics

Growing Earnings Gap Especially Sharp among HispanicsThe earnings gap in the nation’s workforce has widened in recent years as the pay of high-wage workers has risen and the pay of low-wage workers has fallen. But while this double-edged phenomenon affects all racial and ethnic groups, Hispanics may be feeling the impact more acutely than others, according to a Pew Research Center analysis.

The median weekly earnings of Hispanics at the low end of the wage scale fell by 9.4%, from $278 to $252 (in fourth quarter 2013 dollars) between 2007 and 2013, years that span the Great Recession and the fitful economic recovery. Meanwhile, the median weekly earnings of Hispanics in the highest wage bracket increased 4.4%, from $1,604 to $1,675.

The earnings gap also stretched among other groups of workers, but to a lesser extent.

Among blacks, the median weekly earnings of those in the lowest wage bracket of the U.S. income distribution decreased 7.7% from the fourth quarter of 2007 to the fourth quarter of 2013 while the earnings of those in the highest wage bracket increased 1.9%. Over the same period, the pay of white low-wage workers fell 5.6% and the pay of white high-wage workers rose 3.4%. Among Asians, the earnings of low-wage workers were unchanged but the earning of high-wage workers increased 6.8%. 

High unemployment and a rise in part-time work are likely explanations for the large drop in the earnings of low-wage Hispanic and black workers. As noted in a recent Pew Research Center Hispanic Trends Project report, unemployment rates for Hispanics and blacks peaked at 12.7% and 15.6%, respectively, in the fourth quarter of 2009. By comparison, among whites and Asians, unemployment rates peaked at 8% and 7.8%, respectively. During the recovery, from 2009 to 2013, unemployment rates for all groups improved, but among blacks, the rate was still in double digits at the end of 2013, standing at 12.1%.

Because part-time employees work fewer hours and earn less, their growing presence within a group can reduce the median earnings of the group. Among employed Hispanics, the share working part-time increased from 13.6% in the fourth quarter of 2007 to 18.7% in the fourth quarter of 2013. Meanwhile, the share of black workers employed part-time increased from 14% to 18.9%. The rise in part-time work was more modest among white workers—from 18.6% to 19.7%—and among Asian workers—from 14.1% to 15.2%.

Topics: Economic Recession, Economics and Personal Finances, Hispanic/Latino Demographics

  1. Photo of Rakesh Kochhar

    is Associate Director for Research at the Pew Research Center's Hispanic Trends Project.

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5 Comments

  1. Indra4 days ago

    I understand and cfnoirm that seniors are using the internet/social networks more why? Due in part to Connected Living and the BTOP program giving them the opportunity to do so. As a Connected Living Regional Program Manager I have experienced a wealth of computer interest when it is presented in a manner they can understand. Most of my students are low-income African Americans who have a limited amount of educational experience. Once the program was presented to them, and taught at their individual levels of understanding, the excitement began! The key is to keep the excitement going once they have their own units in their apartments. Continued education is a must, explaining updates; memory usage; general care and cleaning of units. It is too easy to stop using the internet when you can just turn on the TV.

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  2. Richard Alba5 days ago

    It’s good to see that Hispanic workers in the top quintile are enjoying the income boosts that others there are receiving. But what share of Hispanics are in that quintile?

    Reply
    1. Rakesh Kochhar5 days ago

      In 2013, 9.4% of Hispanic workers were in the top quintile of the U.S. wage distribution. Also, 13.4% were in the second highest quintile, 20.6% in the middle quintile, 28.8% in the second lowest quintile, and 27.9% in the bottom quintile.

      Reply
  3. Charles Heatherly4 weeks ago

    Is there any data on the different wage gain/losses by native-born Hispanics compared to immigrant Hispanics?

    Reply
    1. Rakesh Kochhar3 weeks ago

      I am afraid we did not tabulate wages by quintile for foreign-born and U.S.-born Hispanics. However, a recent report we published has overall trends in wages for these workers from 2007 to 2013 pewhispanic.org/2014/06/19/latin…

      Reply