National study finds 80% growth in Latino middle-class over past 20 years

A new national study released today by the Tomás Rivera Policy Institute (TRPI) reveals the facts of a burgeoning Latino middle class and its prospects for future growth, dispelling misperceptions that Latinos are mostly poor, uneducated and foreign-born.

The Latino middle-class grew at a whopping 80% the past 20 years. This is a rate three times higher than among non-Hispanic whites. The study was conducted by two nationally known scholars, Dr. Frank D. Bean, Professor of Sociology at the University of California, Irvine and Dr. Stephen J. Trejo, Associate Professor of Economics, University of Texas at Austin.

"Latino economic progress has been significant," said TRPI President, Harry Pachon, Ph.D. "Too often, we overlook this ever increasing segment of the Hispanic community."

The study also provides greater insight into this booming demographic. Growth in middle-class households was concentrated among U.S.-born Latinos. In comparison, the number of poor, foreign-born Latino households has increased almost threefold from 1979 to 1998.

Measuring discretionary income among Latinos - defined as income available for non-necessities -- the study found discretionary income had almost

doubled in the past decade to about 72 billion dollars, with the vast majority of the gain concentrated in the midge class.

The study found the percentage of native-born Latinos with a college education rose from 10.7 in 1979 to 15.4 in 1998, a gain of 43.9 %.

"Such increases are even more impressive given the relative financial cost of education to Latino households, " Professor Bean stated.

Still, a substantial income gap remains between Latino households and all U.S. households. That gap widened from about $12,000 in 1976 to more than $16,000 in 1998. At the same time, about 60% of all Anglo households had achieved middle-class status, but only 35% of all Latino households had done the same.

The TRPI study attributes this to a large growth in poverty households; a group the institution defines as having an annual household income under $20,000. Poverty households grew from 1.2 million in 1979 to 2.6 million households in 1998.

The major reason for this was immigration. Nearly 42% of native-born Latino households achieved middle-class status in 1998. While that rate remains lower than that of non-Hispanic whites, it is still higher than the 39% share in 1979. But among foreign-born households, the number of poor Latino households increased almost threefold from 1979 to 1998, from fewer than 600,000 to more than 1.6 million households. Most of that increase occurred during the 1990s. Professor Bean stated that observers of Latinos tend to blur national origin and other distinctions among Latinos. Some have seen the experience of Latinos as similar to that of other immigrant groups and argue that economic progress is mostly a matter of time: that Latinos will achieve economic parity with the mainstream by the end of the third or fourth generations.

Others view Latinos more as a disadvantaged minority and argue that discrimination has retarded economic progress and will continue to do so, absent policies to compensate for past adverse affects.

The TRPI study would argue that each of these points of views has its merits. "On the one hand, we recognize that a gap exists in the education and earning levels between immigrant and native-born Latinos, but that this gap has more to do with origin country levels of economic development than it does with discrimination," Professor Trejo observed.

The study is based on data from the 1980 and 1990 U.S. Census of Population and Housing, as well as several recent years of the U.S. Current Population Survey. The data have been statistically adjusted for inflation using the Consumer Price Index for urban areas.

Founded in 1985, the Tomás Rivera Policy Institute was established as a non-profit organization to conduct and disseminate objective, policy-relevant research and its implications to decision makers on key issues affecting Latino communities. TRPI has evolved into the country's premiere research institute focusing on Latino issues and garnering national recognition for its work in the fields of education, immigration policy, information technology and civic and social research.

For more information or for a copy of the study, please call the TRPI at (909) 621-8897 or visit its website at www.trpi.org.

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