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Recession Hurt
Hispanics in Middle Class USA (By Mercury News) October 18, 2004 - Hispanics were much harder hit than whites during the recent recession and lost substantial ground in wealth even as whites made slim gains, a new report shows. The findings from the Pew Hispanic Center suggest that while Latinos have made tremendous economic gains in recent years, their economic status still leaves them well short of whites and far more vulnerable during downturns. "This is a new population that is trying to move up,'' said Roberto Suro, director of the Pew Hispanic Center. "The downturn in the business cycle cost Hispanics a great deal.'' It certainly cost single mom Librada Garcia, 41. After taxes, she takes home about $1,300 a month from her job as a janitor in Palo Alto. Just three years ago, she was able to save as much as $200 a month. But recently, she has seen her savings dwindle. "Everything is much more expensive now,'' she said. "I used to be able to save a little in case of an emergency. Now, I'm lucky if I have enough to meet all my expenses.'' The study draws on the most recently available U.S. Census data from 1999 to 2002. Rather than look at incomes, the authors examined wealth -- assets like homes, cars and investments. The center did the study to test a sense that Hispanics were making great strides toward joining the middle class. Suro said the study found gains, but ones that were far shakier than expected. Key findings • The median net worth of Hispanic households in 2002 was $7,932 -- only 9 percent of that of non-Hispanic white households at $88,651. African-Americans were further behind at $5,988. Both minority groups made about two-thirds the incomes of whites. • Between 1999 and 2001, the wealth of Hispanic and African-American households fell 27 percent each. The wealth of non-Hispanic white households increased 2 percent. • While 74.3 percent of whites owned homes in 2002, 47.3 of Hispanics and 47.7 percent of African-Americans were homeowners. Suro noted several possible reasons for the Hispanic population's struggles. Latinos tend to be younger, less-educated and living in more expensive regions. Many newer immigrants also tend to send money to relatives in their home countries. But Suro said the gap in homeownership remains one of the biggest factors, even though Latino homeownership is on the rise. Assets such as homes protect a family during a bad economy and can help in retirement. For Latinos, the lack of assets in general meant they lost ground when the economy went sour and will have to work harder just to get back to where they were several years ago. "If you look at the number of people buying homes, you get an impression of an expanding middle class,'' Suro said. "But if you look at the value of those homes, the Hispanic middle class is a lot thinner and shakier.'' It has sure felt that way for Garcia, whose middle-class dreams seemed to be slipping further away in recent years. Because she can't afford a car, a friend drives her to work and Garcia pays for the gas. A year ago, she paid the friend $30 each paycheck for the ride. Now, it's $80. "A 20-cent increase in gas may not mean that much to most people. But to me it means I can't buy my son something he needs,'' Garcia said. Half her salary goes to rent. Three years ago, Garcia and her 4-year-old son moved from a rented room into an unheated garage. It cost more, but at least Cristian has room to play, says Garcia. She hopes her hard work will mean Cristian receives a good education and eventually a good professional job. She hopes he'll be able to someday afford a home. "Dreams don't cost anything, but I know I won't ever be able to buy a house for us.'' |
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