The U.S. recently celebrated the rich contributions and diverse heritage of the Latinx community by observing National Hispanic Heritage Month.1 Diverse and fluid identity terms are a hallmark of the Latinx community and are often the subject of debate. This reflects the size and diversity of the Hispanic community, which is the second-largest ethnic and racial group in the United States, representing 19.1% of the population. In addition to their contribution to our nation’s social fabric, these workers continue to help power the U.S. economy and have the highest labor force participation rate among all racial and ethnic groups.

We find that following the severe impact of the pandemic, Hispanic workers have enjoyed a strong rebound as a result of a historic stretch of job creation. But persistent labor market disparities continue to translate into broader income and poverty disparities for Hispanic people. Narrowing these disparities, which leave Latinx workers and families vulnerable to economic shocks, will require a commitment to strengthen the U.S. social safety net once again and to bolster labor laws to protect the right of Latinx workers to organize and join unions.

The strong labor market recovery has boosted Latinx workers  

Hispanic workers and families were severely impacted by the pandemic and its economic effects. Yet, the bold policy response, which included relief measures and aid to state and local governments, helped improve the economic security of Hispanic families and drove a recovery several times faster than the prolonged recovery from the Great Recession.

Since its peak at the height of the pandemic, the Hispanic unemployment rate has declined by about three-quarters, from 18.8% in April 2020 to 4.6% in September 2023. The magnitude of the decline has been even steeper for Hispanic women, who were hit hardest by the pandemic recession because they are heavily represented in industries and occupations that leave them vulnerable to economic shocks. Overall, the share of unemployed Hispanic women has dropped from 20.2% in April 2020 to 4.3% in September 2023 (see Figure A).

Similar progress is also evident in more comprehensive assessments of the employment gains. Hispanic women experienced the largest employment loss during the pandemic contraction, as their employment-to-population ratio declined from 59.1% in February 2020 to 45.2% in April 2020 (see Figure B). But a historic stretch of job creation has restored the employment losses of Hispanic women as their employment-to-population ratio has fully rebounded to 59.1%. A similar recovery is observed for Hispanic women of prime working age (between 25 and 54 years old) with a job. While the overall employment-to-population ratio of Hispanic men in September 2023 (76.1%) still lags behind the pre-pandemic level of 78.2%, the share of prime-aged Hispanic men with a job has fully recovered to 87.6% in September 2023.  

While Hispanic men and women continue to benefit from the strong recovery after the pandemic, labor market disparities remain. As evidenced in Figure A above, Hispanic men and women are 22.9% and 53.6% more likely to be unemployed than their white peers, respectively. These disparities can be found across states. In the second quarter of 2023, 23 states had Hispanic unemployment rates above 4%, and in some states—like Rhode Island and New York—Hispanic workers were more than twice as likely to be unemployed than their white peers.

Hispanic adults and children face higher levels of poverty

Structural disparities in the labor market and the broader American economy leave Latinx households more economically insecure than their white, non-Hispanic peers. For example, the median annual household income for Hispanic families rose slightly from $62,520 to $62,800 between 2021 and 2022. Yet, Hispanic households still earned just 77 cents for every dollar earned by the median non-Hispanic white household.

These income disparities translate into broader poverty inequities among Hispanic individuals and children (see Figure C). The expansion of the social safety in response to the pandemic substantially decreased the share of all Hispanic people experiencing economic deprivation, with an even larger impact among children. However, the rollback of these public programs and benefits—including the expanded Child Tax Credit—led to a reversal of these gains. The Hispanic community was hit hardest, with poverty rates climbing from 11.2% to 19.3%—a figure surpassing the pre-pandemic rate of 18.8%. The poverty rate for Hispanic children jumped even higher, from 8.4% to 19.5%.  

Figure C shows that Hispanic individuals were about 2.1 times more likely to live in poverty than non-Hispanic whites between 2019 and 2022. Hispanic children were about 2.7 times more likely to live in poverty than non-Hispanic white children in 2022. Without intentional and specific policy interventions that have proven to effectively reduce poverty, the economic well-being of Latinx people will continue to be shaped by the structural inequities that reproduce disadvantages throughout the U.S. economy.  

Unions help narrow the economic disparities that hurt workers and their families  

Protecting the right of workers to organize and join unions is an integral part of empowering the Latinx community to forge political and economic power to make a fairer U.S. economy.

Union membership gives workers the legal right to collectively bargain over their working conditions, providing them with significant benefits compared with non-unionized peers. Research shows that workers covered by a union contract have higher wages, more benefits, greater job security, safer working conditions, increased job satisfaction, and more. The union advantage extends beyond individual workers as well. By lifting standards across industries, unions benefit all workers through higher wages and facilitating greater economic mobility for children in both union and non-union households.

In the Latinx community, unions are a pivotal lever for promoting equity, partly due to the transparent pay standards in union contracts that help reduce racial and ethnic pay disparities. Although Hispanic union membership is slightly lower than white union membership (8.8% vs. 10.0%), Hispanic workers see a more substantial union wage premium than their non-Hispanic white counterparts (17.6% vs. 10.4%) since collective bargaining raises the wages of Hispanic workers closer to those of white workers.

But without legislative action, the pathway to building union density in the Latinx community is under threat. Between 1973 to 2022, Hispanic union membership fell significantly from 31.2% to 9.0%. This isn’t because of a lack of union support—64% of Hispanics hold favorable views of labor unions. This discrepancy is the result of decades of intensifying employer opposition to unions, underscoring the need for robust legislative action. Policies like the Protecting the Right to Organize (PRO) Act would protect workers from retaliation, ensure a fair union election process, reduce the time needed to negotiate a union contract, and thus safeguard the Latinx community’s access to the empowering force of unions and collective action.

Conclusion 

The ability of Latinx workers and households to navigate more than three years of economic highs and lows since the pandemic underscores their resilience. Yet, resilience is not a stand-in for policy. There is an urgent need for policymakers to address the economic disparities that disadvantage Latinx people.

Equity-enhancing policies, like the expanded Child Tax Credit that reduced poverty among Hispanic adults and children, also illustrate that the mission to eradicate poverty is a policy choice. Bolstering the rights of Latinx workers to unionize also remains fundamental to ensuring access to higher-paying, quality jobs and to narrowing earning gaps. The bold policy response to the pandemic served as a reminder that we do not need to choose between growing the economy and expanding equity.  

Note

1. “Latinx” is a gender-neutral term that may be used interchangeably with Latino/Latina or Hispanic (more here).