Document Type

Research Report

Publication Date

2-2020

Abstract

In 2018 a financial news and commentary website, 24/7 Wall St., ranked Massachusetts as the state with the largest economic and social disparities between Latinos and non-Latino whites. For example, median household income was shown to be slightly above $80,000 for whites and just under $40,000 for Latinos. Even more starkly, the rates of homeownership were shown as 69.3% and 26.0%, respectively.

The present report offers an in-depth look at one aspect of the disparity, namely, the difference between the median wage income of Latinos and non-Latinos (a great majority of whom in Massachusetts are non-Latino white). In 2017 Latinos in Massachusetts earned a median wage income of $29,324 compared to $47,526 for non-Latinos. Even when the comparison is narrowed to full-time workers, the disparity persists: $37,818 to $60,671.

This gap takes on some importance given that Latinos composed 12% of the state’s labor force in 2017, and their share is expected to increase to over 18% of the labor force by 2035. Their growing role in the state’s economy makes their labor market experience an important policy concern.

The report starts with an overview of Latinos in the Massachusetts labor force, including statistics on their labor force participation, unemployment, age structure, and gender composition – all of these in comparison with non-Latinos. The report then turns to wage comparisons, including comparisons within occupational categories. In each case, to arrive at the wage differential measure, we subtract non-Latino wage income from the Latino wage income, then divide this difference by the Latino wage to arrive at a percentage wage differential. In addition to occupational categories, we also provide wage estimates by age, sex, nativity, and education.

This analysis makes no attempt to control for other unobserved factors such as social networks or discrimination. Further research is needed to find the cause of this wage differential.

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