"There is a wage gap with Latino workers that can only be explained by employment discrimination"
Carmen Sánchez Cumming is a Research Associate at the Washington Center for Equitable Growth, a nonprofit research organization dedicated to advancing evidence-backed ideas and policies that promote strong and stable economic growth. Before joining Equitable Growth, Sánchez Cumming, a Mexican born in CDMX, was a campaign assistant at Oxfam America and a research assistant in the Department of Sociology at Middlebury College.
With expertise in the labor market, wage inequality and market concentration, Sánchez Cumming - who has a BA in economics and sociology - spoke exclusively with LPO. The expert warns that although the United States has a low unemployment rate, around 3.4%, the rate for Latinos is almost 1 percentage point higher and that gap has widen in recent times, as has inequality from income. And she says that although she considers herself an optimistic and these inequalities can be improved, there is a part of that gap that seems to be structural.
Employment in the US is very strong and the unemployment rate is only 3.4%. Are Latinos also taking advantage of the employment boom?
When the coronavirus crisis began, Latino unemployment was the one that rocketed the most. After that, it had a very fast recovery, but for Latinos now the unemployment rate is 4.5% and for Americans it is 3.4%. It is a big difference and it has widen in recent months. In general, one way to explain this difference is by occupational distribution. Latino men are disproportionately represented in the construction and agriculture sectors; while Latinas are in industries such as hospitality and services that were hit hard by the pandemic.
Everyone talks of a recessive scenario that will be seen some time this year. That tends to impact faster on employment for Latinos...
Latinos are the first to lose their jobs when there are crisis. But I would be more cautious, because I am not so sure that we are going to enter a recession this year. International banks and organizations are less secure now than they were a few months ago. But speaking of industries like hospitality, which used to be a gigantic industry, it still has to recover from the pandemic. We tend to think that everything is fixed, but no, there are industries still affected by 2020 that have not recovered yet.
There is also divergence with other groups regarding salaries for Latinos.
On average, among the largest demographic groups, Latinos have the lowest incomes. That has to do with the occupations and the industries they are in. It also has to do with the fact that when recession passes, Latinos are fired very fast. But also when the economy recovers, they are the fastest hired group. There is some evidence that since Latinos have some concern about their employment situation, they are in a hurry to find a job. But that means that they take jobs that are not so well paid, and if they had the time and financial stability, they would find a good fit for them. That happens, and that is why unemployment for Latinos is quite volatile. It goes up and down a lot depending on the sector they are.
Can this inequality be reversed?
We would hope that this would change and that there would be less segregation between occupations. Much of it is complicated because also the jobs that people have have to do with social rules. But starting with having a support device like unemployment insurance and that everyone has access to it, Latinos could have a financial cushion that makes them feel more secure when demanding better jobs. When you are in a precarious situation, you feel you can demand less.
Speaking of the construction sector, where Latino men are highly represented, there is not only the issue of poor pay but also dangerous jobs. Something similar happens with drivers. All this represents an economic cost for the workers.
Is salary inequality just a matter for the sectors where Latinos are overrepresented, or is there another additional component?
There are certain statistical methods that explain the wage gaps between Latinos and white men, and the joke is that economists think that there are many things that explain people's salaries. But in a research carried out by colleagues from Equitable Growth, they also find that taking all the variables into account, there is a wage gap that cannot be explained. And it is the way economists say it is discrimination in the labor market because they are gaps that cannot be explained by any obvious thing. I do think that there is discrimination in the labor market.
And has this gap been decreasing in recent years? Do you think it is going to continue like that?
I would hope so. While those gaps have shrunk a bit, not as much as we wanted, they have been constant over the past few years. I think that certain institutions that work on no discrimination in the workplace would help. It is to guarantee that people feel empowered: if you think that if a colleague is earning more due to demographic characteristics, you do not feel less empowered to accuse him. A union is useful for this, a higher minimum wage is useful, giving the institutions more money and more people so that these things can be pursued is useful too.
Can it be reversed with more access to education, particularly for Latina women who are furthest behind?
There are some hopeful points. Education is not everything in the labor market, but for example, Latinas are increasing their level of education at very high rates and there are many more Latinas studying at universities. I hope those things start to have an effect on their salaries. Some things make me feel optimistic about the labor market in the coming years: sectors such as construction, manufacturing, and transportation. The government is investing a lot of money in infrastructure projects and cleaner energy. That means many more higher quality jobs for Latinos.