The strong labor market over the last two years has produced historic employment gains for Hispanic workers. In 2022, Hispanic workers achieved one of their lowest unemployment rates on record. Later in 2023, the share of the Hispanic population ages 25–54 with a job reached the highest point in recorded history.  

Behind these aggregate statistics, however, there is a more nuanced picture of one of the most diverse ethnic groups in the United States. This blog provides a brief description of how different groups of Hispanic workers have fared during the economic recovery from the pandemic recession.  

The unemployment rate of Hispanic workers from all backgrounds has declined, but notable differences remain  

In 2022, the Hispanic unemployment rate reached 4.3%, one of the lowest figures in recorded history. By 2023, the unemployment rate of both Latinos and Latinas had returned to pre-pandemic levels, below 5%. Though the economic recovery has been robust, noticeable differences in employment outcomes have remained depending on country of origin (see Figure A). 

Among Latina workers, those originating from Cuba had the lowest unemployment rate at 2.5% in 2023. However, unemployment rates were more than twice as high for Latinas of Dominican, Puerto Rican, and Central American (excluding Salvadoran) origin. While the unemployment rate for Latinas originating from Mexico, South America, and the Dominican Republic had fully recovered to pre-pandemic levels by 2023, the unemployment rate for Latinas of Salvadoran origin remained above the pre-pandemic rate.  

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Economic performance looms large in every presidential election year. In 2024, people’s perception of their own economic situation is high, yet their estimation of the economy’s performance more generally has been noticeably negative. It is often taken as given in economic commentary that the economy was stronger pre-pandemic. This impression is deeply mistaken.

The economy today is extraordinarily strong by nearly every historical benchmark, including relative to the years immediately preceding the pandemic. Unhappiness about the economy’s performance is mostly a hangover induced by the extreme shocks and aftereffects of the pandemic and the Russian invasion of the Ukraine. These shocks led to a pronounced “bullwhip effect”—the economy saw aggregate demand collapse which led to unemployment spiking (during the late Trump administration) and then demand snapped back as supply chains broke down which caused inflation to spike (during the early Biden administration).

By the end of 2022, the shocks had largely subsided and their economic effects were being quickly dampened. A serious assessment of how the economy is doing today should look past these short-term bullwhip effects and focus on comparisons of the pre- and post-shock “normal.”

The table at the bottom of this post compares economic performance along a range of measures across three time periods: since the end of 2022, the last full business cycle before the pandemic (2007–2019), and between 2017–2019—the tail end of that business cycle’s expansion that coincided with the Trump administration before the damaging pandemic effects were felt.

Compared with the other two periods, the second half of the Biden administration has seen pronounced economic strength. Each indicator is summarized below:

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December 31 is the deadline for states, cities, and municipalities to obligate their State and Local Fiscal Recovery Funds (SLFRF). The $350 billion program—part of the 2021 American Rescue Plan Act (ARPA)—has played an important role in rebuilding and sustaining public services over the last 3.5 years. However, the latest data show many recipient governments still have substantial sums left to obligate and, just as worryingly, some may mistakenly believe they have satisfied the obligation requirements even though they have not. Advocates, and all those interested in successful public services, should make sure their state and local government have plans to meet the obligation deadline.

As EPI has recently reiterated, the post-pandemic economic recovery is very much a success story, and that is in part due to SLFRF. It took a full decade for public-sector employment numbers to recover from the Great Recession, but SLFRF ensured that it happened in less than half that time following the COVID-19 recession.

SLFRF can be used in many ways—from recruiting and retaining workers to enhancing public health measures, building housing, installing broadband, and so much more. This flexibility has been key to SLFRF’s success, but also has created some challenges. In conversations with state and local advocates, policymakers, and researchers at EPI’s network of state and local think thanks, we have heard that policymakers in many governments have experienced a sort of “paralysis of choice,” unable to choose between the myriad good options available.

The time to choose is now. Any dollars not obligated by the December 31 deadline need to be returned to the U.S. Treasury (the funds don’t have to be spent until the end of 2026). Worryingly, the latest public data on SLFRF obligation and spending through March 31 suggest many state and local governments may not be on track.

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In a previous post, we highlighted the data indicating a shortage in teacher labor markets and offered solutions to address it. But closing the current labor shortage would not necessarily imply that we have invested enough of society’s resources in public schools.

A teacher shortage means that demand for teachers (proxied by vacant positions) is greater than the current supply of willing teachers (proxied by new hires). But the demand side of the teacher labor market is not set through any market mechanism. In this country, we rightly think that education is a public good everyone deserves and, as a result, rely on policymakers to decide how much society should invest in public education. If policymakers set the demand for inputs into public education (like teachers) to be low relative to the socially optimal level of investment in public education (by not allocating enough funding for public schools), shortages are easy to avoid. Yet the absence of a shortage would not mean we got the level of education investment right.

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The new school year has begun with some confusion over the state of teacher labor markets. News outlets have reported conflicting stories on the teacher shortage, with some saying it is over or improved, and others reporting still not having enough teachers to meet classroom needs. This two-part series looks at labor market conditions of educational professionals and teachers over time to make sense of these conflicting claims and dig deeper into how to diagnose and solve the teacher shortage.

There are two key problems in the teacher labor market. Since at least 2018, and especially since the onset of the COVID-19 crisis, labor market data has clearly signaled a textbook labor shortage for public school teachers. Closing this shortage and attracting—and retaining—enough teachers to fill currently vacant positions should be a high priority for policymakers at all levels of government. To accomplish this, the obvious strategy is to increase the attractiveness of teaching jobs—both through higher compensation for teachers, but also via investments that make teaching easier and more rewarding.

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Last week, the Bureau of Labor Statistics reported that 254,000 jobs were created in September and that job growth in both July and August was stronger than initially reported. This report was just the latest confirmation of the extraordinary strength of the U.S. labor market in recent years. This strength is what led to real (inflation-adjusted) incomes recovering far faster after the COVID-19 recession than they have following previous recessions. Even better, real wage growth has been by far the fastest at the low end of the wage scale, which has reduced inequality.

This labor market strength was also 100% a policy choice. Unlike previous business cycles, policymakers passed fiscal relief and recovery measures at the scale of the shock, and it proved that low unemployment could be restored very quickly after recessions so long as this policy lever was pulled with enough force.

Public appreciation of this accomplishment has been blunted by the outbreak of inflation in 2021 and 2022. While inflation has been steadily reined in since early 2023, the public’s perception of the economy remains soured by it. In a strict economic sense, the public mood seems odd: If real wages are higher and more equal now than at equivalent points in previous recoveries, why isn’t the public mood much better?

One reason put forward as to why the public dislikes inflation even if real wages and incomes are rising is pretty persuasive: workers see wage growth as something they individually achieved while inflation was a policy mistake inflicted on them. This outlook is understandable, but it’s totally wrong.

Policy choices influence wage growth every bit as much as inflation—and sometimes more. When wage growth is slow, policymakers deserve blame—not workers. When wage growth is strong, however, it is because policy has done something right, not because workers spontaneously decided to become more productive or harder-working.

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Below, EPI economists offer their insights on the jobs report released this morning, which showed 254,000 jobs added in September.

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Political debates about the impact of immigration on the economy have often been at odds with the facts. But the consensus is surprisingly uncontroversial among economists: Immigration expands and strengthens the economy.

The Economic Policy Institute and the Immigration Research Initiative have come together to synthesize some of the most essential facts on immigration, immigrant workers, and the economy in a one-page fact sheet. We will co-release additional fact sheets summarizing state-by-state economic impacts in the coming days.

The fact sheets highlight the reality of how immigration benefits the economy and all workers. For example:

• Immigrant workers are a major and vital component of the U.S. workforce across occupations and industries, many of which would struggle without their contributions.
• Immigration expands U.S. Gross Domestic Product and is good for growth.
• Immigration overall has led to better—not worse—wages and work opportunities for U.S.-born workers.
• Immigration is enabling the United States to see continued economic growth despite an aging U.S.-born population and shrinking number of prime-age working adults.
• Immigrants play a key role in health care and home care jobs that help ensure retirement with dignity for seniors and independent living for people with disabilities.
• People who immigrate to the United States increase the economy’s stock of human capital and ideas, two crucial ingredients for long-run economic growth.

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It is indisputable that the U.S. labor market is strong. The share of the population ages 25–54 with a job is at a 23-year high, median household incomes rose 4.0% last year, and real wage growth over the last four years has been broad-based and strong. The economy has not only regained the nearly 22 million jobs lost in the pandemic recession, but also added another 6.5 million.

Are some folks still having a hard time? Absolutely. Even when the unemployment rate is low, there are still sidelined workers, and it remains difficult for many families to make ends meet on wages that are still too low. Unfortunately, that’s a long-term phenomenon stemming from a too-stingy U.S. welfare state, rising inequality, and the legacy of anemic wage growth during past economic recoveries. But when comparing the labor market with four years ago (during the pandemic recession) or even before the pandemic began, the answer is clear: More workers have jobs and wages are beating inflation by solid margins.

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The Federal Reserve belatedly began cutting interest rates two weeks ago, putting a quasi-official stamp on the “soft landing” with inflation nearly being brought down to the Fed’s long-run 2% target without any substantial weakening of the labor market. This milestone seems like a natural time to assess how well macroeconomic managers handled the past four years.

The answer—underappreciated by far too many—is very well!

In a nutshell, the Biden-Harris administration pushed a frontloaded and significant fiscal stimulus as the first major priority of their administration. The Federal Reserve accommodated this stimulus early on, and then began raising interest rates (more sharply than I would have) to try to rein in inflation. But they wisely never followed the advice of many to “keep raising rates until something breaks.”

In short, a return to full employment was prioritized in the Biden-Harris fiscal approach, and the value of low unemployment was clearly appreciated by the Fed. The results of this approach have been a clear success. There is no other plausible set of decisions about fiscal policy and interest rates over the past four years that would have led to lower inflation yet still would have seen real (inflation-adjusted) wages as high as today or as many people employed. That means there is no real argument against the assessment that macroeconomic policy has been a success.

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