Slow economy hits Hispanics hard

from USA Today

By Sue Kirchhoff, USA TODAY
WASHINGTON — Unemployment is rising faster among Hispanics than the rest of the U.S. population as the economy slows, a development that has ripple effects across the nation and into Latin America.

The steep, continuing U.S. housing downturn has had a disproportionate impact on the Hispanic workforce, which is highly concentrated in construction. Because homeownership is also the major source of wealth for Latino families, falling house prices have made it harder for small-business owners to use their residences as collateral for needed loans to run or expand their firms.

Further, the weakening job market, and state and federal crackdowns on illegal immigrants, have reduced the number of Hispanics wiring money to Latin America. Millions of families who depend on so-called remittance payments could be pushed into poverty if current trends continue, according to the Inter-American Development Bank.

The U.S. Hispanic unemployment rate jumped to 6.9% in April from 5.5% in April 2007. The African-American unemployment rate is higher, at 8.6%, but has risen less sharply in the past year. The white jobless rate was 4.4% in April.

Housing market implosion takes a toll

The impact of rising unemployment is being felt at the Southern Nevada Hispanic Employment Program in Las Vegas, which offers about 150 scholarships annually for higher education, along with other job-related assistance.

About 60% of those seeking scholarships through the program are older students who have been in the workforce, many in real estate jobs that have disappeared.

"We're out there trying to hustle" for additional funding, says Leslie Valdez, president of the program. "Because of the economic situation, a lot of people got laid off from work. Everybody was a Realtor; everybody was a loan officer."

The housing bust and rising foreclosures have other economic impacts. Hard-hit lenders are setting tougher terms for products from home-equity to business loans. That's especially hard on the Hispanic population, where workers may have sporadic work histories and often don't have traditional credit scores.

"Rising credit constraints have had an impact on small businesses," says David Ferreira, vice president for government relations at the U.S. Hispanic Chamber of Commerce. "Hispanics have a higher rate of using home equity or credit cards for financing a business or expanding a business."

The Hispanic homeownership rate had risen to nearly 50% before the housing bubble burst.

Still, the picture isn't uniformly bleak. Latino workers with professional degrees, particularly in professions such as nursing, are in high demand. Companies want bilingual workers in order to reach out to the rapidly growing Hispanic market, as well as to meet internal needs.

"We haven't seen a decline in companies recruiting; there hasn't been a decline in the number of job positions," says Rob Steward, sales director at LatPro, an online employment site for Hispanic professionals. LatPro is working with the National Society for Hispanic Professionals to put together nine job fairs around the country this year.

"Major (companies), small and everyone in between (are) still recruiting for the skill set these workers provide," Steward says.

At the same time, official employment statistics may not fully reflect conditions in the Hispanic community. Because millions of Latino workers are in the country illegally, they may not show up in government data. They also have a smaller safety net during economic downturns.

Eligible Hispanics collect federal benefits such as food stamps at lower rates than other population groups, and are more likely than whites to lack health coverage. States that are forced to pare back budgets often cut health care to legal immigrants before trimming other health care programs, says Catherine Singley of the National Council of La Raza, a non-profit advocacy group.

Many not eligible for benefits

Political efforts to aid the unemployed are not always well tailored to the Hispanic community. One such case: Congress will soon debate a measure to extend unemployment benefits for laid-off workers who have already exhausted their initial six months of coverage.

"For the Latino community, (an extension) is not very effective because not many are eligible for unemployment" assistances, Singley says.

Many states require a certain level of wages or "consistent work history, and that just isn't a reality for a lot of workers who are either working on a contractual basis or taking odd jobs, day laborers. That describes a lot of Hispanic workers."

An Inter-American Development Bank poll of 5,000 Latin Americans living in the USA earlier this year found just 50% were sending regular payments back home to their families, down from 73% in 2006. Those sending money are sending greater amounts, but it's reaching fewer families.