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Snapshot: U.S. Recessions Test Latino Advances

Latinos make up the largest ethnic minority in the U.S. (Chart 1). The majority are U.S. born, making their progress and well-being no longer just a question of immigrant assimilation but also of the effectiveness of U.S. educational institutions and labor markets in equipping young Latinos to move from the working class into the middle class and beyond.

Chart 1

Downloadable chart

One significant headwind to progress is recessions. Economic outcomes of Latinos are far more sensitive to the business cycle than are outcomes for non-Hispanic whites. Latinos also have higher poverty rates than whites, although the gap narrowed before the onset of the COVID-19 pandemic in early 2020.

Deep holes in the pandemic safety net further imperiled Latino progress in 2020 and almost surely will in 2021 as well. Policies that would help working-class and poor Latinos include immigration reform and education reform and broader access to affordable health care.

—Adapted from “How Foreign- and U.S.-Born Latinos Fare During Recessions and Recoveries,” a research paper by by Pia M. Orrenius and Madeline Zavodny.

Southwest Economy is published quarterly by the Federal Reserve Bank of Dallas. The views expressed are those of the authors and should not be attributed to the Federal Reserve Bank of Dallas or the Federal Reserve System.

Articles may be reprinted on the condition that the source is credited to the Federal Reserve Bank of Dallas.

Full publication is available online: www.dallasfed.org/research/swe/2021/swe2103.

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