Second generation immigrants show improved socioeconomic outcomes over their parents. Despite America’s many challenges in creating equitable opportunities, it is a rare bright spot in the nation’s racial and ethnic landscape. New data added to the National Equity Atlas in July shows how U.S.-born Latinos trail U.S.-born Whites in education, wages, and poverty, but still fare better than their immigrant counterparts (with one notable exception).

The recently added nativity breakdowns in the National Equity Atlas allow users to compare outcomes for immigrants and U.S.-born people. In the analysis below, we compare the outcomes of Latinos and Whites with a specific focus on those who are U.S.-born across three socioeconomic indicators: median wage, educational attainment, and poverty, and suggest some reasons why this stratification might persist. For reference, two thirds of Latinos were born in the United States, while 95 percent of Whites are U.S.-born citizens.  

The White-Latino wage gap is smaller among the U.S.-born population

The median wage for Latino workers is $7 less than the median wage for White workers. When looking only at U.S.-born workers, however, the wage gap decreases: U.S.-born Latinos only trail U.S.-born Whites by $4. This narrower wage gap can be explained, in part, by the fact that U.S.-born Latinos earn a much higher median wage ($18/hour) than their immigrant counterparts ($13/hour).

Regions with the greatest numbers of Latinos have larger wage gaps

To better understand how this wage gap varies by region and with the size of the overall Latino population, we looked at the six U.S. metro areas with the largest numbers of Latinos: Los Angeles, New York, Miami, Houston, Chicago, and Riverside, California. Taken together, these six metro areas are home to 37 percent of the total Latino population in the United States.

In nearly all of these regions, the wage disparities between U.S.-born Whites and U.S.-born Latinos are higher than the national average. The wage gap in the Los Angeles and New York metros reach as high as $10/hour—$6/hour more than the national wage gap between U.S.-born Latinos and U.S.-born Whites. Only Miami has a wage gap comparable to the national average.

Why is the wage gap between U.S.-born Latinos and U.S.-born Whites so much higher than the national average in the regions where the most Latinos live? It is mainly being driven by the particularly high wages of U.S.-born Whites in these regions. As the chart above illustrates, U.S.-born Latinos in all six regions have higher median wages than the national average of $18/hour, reaching as high as $21/hour in the New York metro area. U.S.-born Whites in all six regions also have median wages that are above the national average of $22/hour, reaching as high as $31/hour in New York. As a consequence, the median wage gap tends to be significantly above the national average in these regions, despite U.S.-born Latinos also reporting higher median wages.

Both place and educational attainment affect median wages

Metropolitan regions attract high-skilled and educated workers, and the fact that these metro areas are home not only to the largest populations of Latinos but also to some of the biggest cities in our nation could help explain the wage gaps described above. But how do U.S.-born Latinos and Whites in these regions compare in terms of educational attainment?

The figure below reveals that the share of residents with at least a bachelor’s degree (BA) in most of these regions is much higher than the national average for both U.S.-born Whites and U.S.-born Latinos. In four of the six regions, a greater share of U.S.-born Latinos has a bachelor’s degree compared to the national average of 18 percent for all U.S.-born Latinos. There is also considerable variation in educational attainment among the U.S.-born White population. Only in Riverside is the share of U.S.-born Whites with at least a BA smaller than the national average of 34 percent.

A report from the Federal Reserve Bank of Philadelphia shows that workers with and without college degrees tend to earn higher wages in larger cities, but college graduates experience a much faster growth in their median wages in big cities. The big-city factor might be one reason for these above-average wages.

Comparing the data on wages and education levels for U.S.-born Latinos from the charts above reveal how Miami’s U.S.-born Latinos tend to be highly educated yet do not earn particularly high wages, while Riverside’s U.S.-born Latinos are less educated and earn particularly high wages.

The poverty rate is similar for immigrant and U.S. born Latinos

While U.S.-born Latinos do better than immigrant Latinos when it comes to median wages and educational attainment, when you look at poverty (at the 100 percent of the federal poverty level threshold), you will see a different story. As the chart below illustrates, U.S.-born Latinos and Latino immigrants experience poverty at about the same rate—24 percent—compared with 10 percent for Whites. This suggests that U.S.-born Latinos are not better off than their immigrant counterparts when it comes to poverty, and, in fact, the unrounded numbers show that their poverty rates are actually slightly higher—24.4 percent versus 24.0 percent. When looking at 200 percent of poverty, however, the trend is similar to one we saw with wages and education: U.S.-born Latinos are less likely than Latino immigrants to fall below 200% of poverty (51 percent versus 57 percent). Still, the fact that U.S.-born Latinos experience deep poverty at the same rate as their immigrant counterparts is troubling.

One potential explanation for this could be that many U.S.-born Latinos belong to recent immigrant households whose socioeconomic status often has reverberating effects for their children and the generations that follow. Another possible explanation is that immigrant-headed households tend to be larger with more workers, raising their family-based poverty threshold while U.S.-born Latinos are more likely to be in smaller, nuclear families.

Inclusion and integration for the fastest growing community in the U.S.

The U.S. Latino community, the fastest growing group in the richest country on earth, should not be steeped in this magnitude of poverty. The astounding numbers of U.S.-born Latinos and Latino immigrants living under the poverty line underscore not only how great the challenges are to Latino immigrant integration and inclusion, but more shockingly how great the challenges are to achieving equity for their U.S.-born counterparts.

One starting point to address this lack of integration in the Latino community is to insure the children and youth within this community have access to quality education that could launch them on a positive trajectory to achieve economic success.

To learn more about how U.S.-born people and immigrants are faring in your community, go to the Indicators tab, select one of the eight equity indicators that have data by nativity (Wages: $15/hour, Unemployment, Homeownership, Wages: Median, Working poor, Poverty, Disconnected youth, or Education levels and job requirements), and click on the “By nativity” breakdown.

This blog post by Angel Ross was first published on the National Equity Atlas August 9, 2016.

Immigrants have been an integral part of the social, political, and economic fabric of this nation since its inception. But increasingly hostile local, state, and national policies and climates put many immigrants in precarious situations, restricting both their participation and potential, and ultimately hurting the economy as a whole.

In June, we released data on working poverty in the Atlas, and found the number of Latinos working full-time yet still struggling economically has increased steadily over the last three decades. Last week, we added breakdowns on immigrant status to eight Atlas indicators, including working poverty. This new data reveals the significant challenges of working poverty among Latino immigrants and the vast differences within the Latino immigrant and U.S.-born populations. For instance, nationwide Latino immigrants are twice as likely as U.S.-born Latinos to be working poor.

This analysis describes working poverty among Latino immigrants, examines the cities with the worst outcomes on this indicator, and highlights policies to support immigrant integration and ensure economic security.

Employed Latino immigrants have higher poverty rates than U.S.-born Latinos

One in four Latino immigrants between the ages of 25 and 64 is working full-time but has a family income below 200% of the federal poverty level, compared with just 12 percent of U.S.-born Latinos. Mexican immigrants, who account for more than half of all Latino immigrants, have the highest overall rate of working poverty among Latinos at nearly 29 percent followed by Guatemalans (28 percent) and Hondurans (26 percent). 

Multiple factors contribute to these numbers. In addition to lower wages and lower levels of educational attainment on average, another important reason is that immigrants, half of whom are Latino, are less likely to be enrolled in public benefits programs. Poverty is calculated based on family income, which includes earnings as well as sources other than work like the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF). Undocumented people are currently ineligible for many of these programs, but we see lower rates of enrollment even among eligible immigrant families. Increasing enrollment in these programs is one way to ease the burden that many low-income immigrant families face in the U.S.

Many immigrants are also part of mixed status families, which might include authorized immigrants, undocumented immigrants, and U.S. citizens. By 2010, close to a quarter of all children had at least one immigrant parent. But due to the precarious status of undocumented workers and discrimination against Latino immigrants, exploitation and wage theft is rampant.

The high rates of working poverty among working-age Latino immigrants translates into high levels of economic insecurity among Latino children, who are a large and growing segment of our future workforce. Nearly 63 percent of Latinos under 18 years old live below 200 percent of poverty as do two in three Latino children under 5 years old.

Where do Latino immigrants face the biggest barriers?

To better understand the geography of economic insecurity among Latino immigrants, we ranked the 100 largest cities in the U.S. by the rate of working poverty and the median wage among Latino immigrants. Because both citizenship and education are associated with higher earnings, we also looked at the citizenship rate and the percent without a high school diploma.

The cities with the highest levels of working poverty among Latino immigrants—with 38 to 40 percent of their Latino immigrants working poor—included the North Carolina cities of Winston-Salem and Greensboro, along with the Texas cities of Dallas and Irving, followed by Minneapolis, Minnesota. These cities also had lower median wages, lower levels of citizenship, and lower levels of educational attainment than Latino immigrants nationally. The national citizenship rate of all Latino immigrants, for example, is 30 percent and the median wage for full-time workers is $12.70/hour. Yet the citizenship rate among the five cities with the highest levels of working poverty ranged from 11 percent in Winston-Salem and Greensboro to 19 percent in Irving. The median wage ranged from $9.40/hour in Winston-Salem to $10.70/hour in Dallas. Similarly, just under half of Latino immigrants nationally lack a high school diploma, but that number goes as high as 68 percent in Dallas.

The cities with the lowest median wages among Latino immigrants—ranging from just $8.90/hour to $10.20/hour—are Raleigh and Winston-Salem, North Carolina, Indianapolis, IN, Plano, TX, and Columbus, OH. Indianapolis has the third lowest median wage but a significantly lower rate of working poverty than other cities. The wage difference in Irving and Plano, Texas show the extent to which labor markets are truly local: the median wage is more than a dollar lower in Plano than in Irving or Dallas even though both are part of the Dallas metropolitan area and educational attainment is higher in Plano. Importantly, Latino immigrants as a whole account for a much smaller share of the total population in Plano than in Irving (7 percent in Plano versus 20 percent in Irving).

Winston-Salem, NC is the only city ranking both in the top five on working poverty and in the bottom five on median wages. With roughly 36,000 Latinos, 20,000 of whom are immigrants, Winston-Salem is home to the largest share of Latinos out of all big cities in North Carolina while neighboring Greensboro has one of the smallest shares of Latinos. Yet in both cities, Latino immigrants face significant barriers to economic inclusion. Four in ten Latino immigrants ages 25 to 64 in Winston-Salem and Greensboro are working poor and half earn less than $9.50/hour in Winston-Salem and $10/hour in Greensboro.

Latino immigrants in the capital of North Carolina at the heart of the Research Triangle (anchored by North Carolina State University, Duke University, and University of North Carolina at Chapel Hill) have the lowest median wage for full-time workers of the largest 100 cities and even the largest 150 metropolitan areas in the country. With more than half of Latino immigrants in Raleigh earning less than $9/hour, combining the income of two working parents still doesn’t add up to a living wage for a family of three or four. Latino immigrants are more than three times as likely as U.S.-born Latinos in Raleigh to be working poor.

Interestingly, the median wage of Latino immigrants in Durham, also in the Research Triangle, is nearly $3/hour higher than in Raleigh even though a higher percentage of Latino immigrants in Durham lack a HS diploma and the citizenship rates in both cities are nearly identical. The Latino population also accounts for roughly the same share of the population in both cities, but Durham is majority people of color and Raleigh is majority White. Despite the higher median wage, 29 percent of Latino immigrants in Durham are working poor.

Municipal IDs and the state preemption of local policies benefiting immigrants

The North Carolina economy relies on immigrant labor, but last year Governor Pat McCrory signed a bill banning local governments from establishing “sanctuary cities” and preventing government agencies from accepting local or foreign-issued IDs. The mayor of Greensboro viewed this legislation as targeted towards their local efforts to welcome immigrants with one of the first programs in the South that offered ID cards to immigrants. Law enforcement officials successfully pushed back last year and the law only bars city officials from accepting the ID cards, not police or hospitals.

But this year, new legislation was introduced in the state that would prohibit law enforcement from accepting municipal IDs. This law was passed in spite of evidence that local ID cards help to foster a sense of community among all residents and that law enforcement has actually solved more cases due to increased trust from the undocumented community. This type of state preemption to local authority is a threat to equitable development, but continues to gain momentum across the country, particularly in more conservative states, curbing the ability of local leaders to build inclusive and equitable cities.

Immigrant integration is a moral and economic imperative

In an increasingly hostile political environment, one promising strategy for immigrant integration is increasing naturalization. Not only does naturalization strengthen democracy through voter representation, it also results in economic gains. A recent study by our partners at the Center for the Study of Immigrant Integration found that reducing the eligible to naturalize population by half over 5 years is estimated to result in a $75 billion gain to the national economy over ten years. Ending the criminalization of undocumented immigrants by providing a pathway to citizenship and increasing citizenship supports for authorized immigrants has benefits extending far beyond the immigrant population.

In additional to municipal ID cards, other state and local strategies include providing access to health care for undocumented people, as SB 10 did in California, and separating local policing from immigration enforcement as HB 13-1258 did in Colorado. Policies that contribute to the just and fair inclusion of those residents who are often left behind help to create thriving and sustainable communities. To learn more about these policies, visit our immigrant contribution to growth indicator.

To explore data on immigrants for your city, region or state, visit the National Equity Atlas. For more information on the nativity cuts, see our previous blog.

Dear Equity Atlas Users,

As Latinos drive population growth and change in America, their ability to thrive is increasingly critical to the health of our economies locally and nationally. Yet, new data on working poverty in the National Equity Atlas reveals the extent to which many Latinos are working full-time yet still struggling economically. In 2012, nearly one in three Latino full-time workers, ages 25 to 64, earned below 200 percent of poverty – up from 27 percent in 1990 and compared with 9 percent for their White counterparts.

This post takes a closer look at Latino working poverty across the nation’s largest 150 metropolitan regions. Working poverty describes full-time workers with a family income below 200 percent of poverty, and the rates of working poverty in this post reflect the working poor as a share of full-time workers ages 25 through 64. While poverty is defined at the family level, based on combined income from all family members, in this post we make reference to individual earnings for simplicity. Given that an individual’s family income must be as high or higher than their personal earnings, the rates of working poverty reported here understate the rates that would be found if only an individual’s earnings were considered.

Latino Working Poverty High and Increasing in Many Regions

Not only do many regions have high rates of Latino working poor, conditions are getting worse over time. This is shown by the scatter plot below, which plots the largest 150 regions by the share of Latino full-time workers who earn below 200 percent of poverty in 2012 and the percent increase in Latino working poverty between 2000 and 2012. The farther to the right, the greater the share of Latino working poverty in 2012. The higher up on the chart, the greater the percent increase in Latino working poverty between 2000 and 2012. As illustrated by the number of metros in the upper-right quadrant, there appears to be a positive relationship: the regions with higher rates of working poverty among Latinos also saw a sharp growth in Latino working poverty.

Regions in Tennessee and North Carolina have the highest rates of Latino working poverty

Mapping the data reveals additional geographic patterns, including the clustering of Latino working poverty in the South and particularly in the states of Tennessee and North Carolina. Of the largest 150 metro regions in the U.S., all nine in North Carolina saw substantial increases in working poverty among Latino full-time workers, ranging from a 23 percent increase in Greensboro to an 82 percent increase in Winston-Salem. Each region also had a Latino working poverty rate greater than the national average except for Fayetteville, which matched it. More than half of Latino full-time workers in Greensboro, Durham, Hickory, and Winston-Salem earned less than 200 percent of poverty.

Similarly, the four regions in Tennessee included in the Atlas saw higher than average increases in the overall rates of Latino working poverty. One in two Latino full-time workers in Chattanooga earned less than 200 percent of poverty in 2012, up from 28 percent in 2000. Over the same time period, the Latino population grew significantly faster than any other group in the region.

Tennessee and North Carolina are among the roughly 15 states that currently ban local governments from adopting their own minimum wage laws. Part of the controversial HB2 law passed earlier this year in North Carolina, which restricts usage of multiple occupancy bathrooms for transgender and gender non-conforming people, also includes state preemptions to local minimum wage increases. The current minimum wage in Tennessee and North Carolina is the same as the federal: $7.25 an hour. The MIT Living Wage Calculator, however, estimates that a living wage for a family of four ranges from $13 to $22 an hour in Tennessee and from $14 to $23 an hour in North Carolina. The state preemption laws also prevent localities from allowing workers to earn paid sick leave.

This is a growing and alarming trend: eight states have considered restrictions on local minimum wage increases this year and the story is often similar. When states fail to pass increases in minimum wages in step with increases in cost of living and inflation, some jurisdictions take matters into their own hands by increasing local minimum wages. State legislatures—especially those led by Republicans—push back by adopting laws preventing local action. Raising wages would be especially beneficial to workers of color. In North Carolina, for example, 11 percent of White full-time workers earn less than 200 percent of poverty compared with nearly half of Latino full-time workers. Even more striking, 12 percent of Latino full-time workers earn less than 100 percent of poverty.

Addressing working poverty is a moral and economic imperative. If Latinos, the fastest growing group in many regions, are unable to participate, prosper, and reach their full potential, the impacts will go far beyond the Latino population. To learn more about working poverty in your city, region, or state, and learn about policies that lift the wages of workers, explore the new working poor indicator.