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Recession Hits US Hispanics - 2002-01-29

A recession usually hurts the most vulnerable workers first, such as immigrant laborers with lower education levels and fewer marketable skills. A study published this week says Hispanic immigrants have been hard hit by the economic downturn and so have their U.S.-born children.

Hispanic Americans number about 35 million and represent the second largest ethnic community in the United States. Like other hard-working immigrants, they benefited a lot from the economic boom of the 1990s. Now the economic downturn has changed all that.

Roberto Suro heads the Pew Hispanic Center, a non-partisan research firm in Washington that tracks the Latino impact on the U.S. economy.

"In the five years before the onset of the recession, Latinos experienced very rapid increases in income, small business formation and very rapid drops in unemployment and poverty. That forward momentum is now stalled and some of those gains may turn into losses," he said.

Mr. Suro says Hispanic workers have been hardest hit by the downturn in the manufacturing, retail, hospitality and construction industries where 40 percent of all Hispanic workers are concentrated.

"So far as Latinos are concerned, this is a story of being in the wrong place at the wrong time," he noticed.

Ironically, the study also shows rising unemployment rates for more than 10 million first generation Hispanic Americans born in the United States who represent the fastest-growing labor source for an aging U.S. population.

Princeton University Professor Alan Krueger, who worked on the study, says the high jobless rate among Hispanic Americans will hurt eight U.S. states where three-fourths of Latino Americans now reside, especially New York, California, Texas, Florida and Illinois.

"If you have higher unemployment in a state, benefits paid out will be higher, taxes collected will be lower so it does have implications for state finances," Mr. Krueger said.

Mr. Krueger says the many Latino workers who work part-time or seasonally do not qualify for unemployment insurance or health benefits. Most families also have fewer resources to survive the hard times.

"The median Hispanic household has only $1,200 in financial assets. The median white household has $17,000. The median African American household has a little over $3,000. So to put this number into context, the median Hispanic household spends about $400 a week. So if the head of the household were to become unemployed, the median household would have about three weeks worth of money saved up," he said.

Mr. Krueger says jobless Latino immigrants will rely on extended family networks for financial support. But that also means they will send less money to needy relatives back home. And that, he says, could have a negative effect on other countries also trying to survive the global economic downturn.