HISPANIC OUTLOOK
Feb. 27, 2006, Vol. 16, No. 10, pp. 37-39

Reprinted with permission of Hispanic Outlook in Higher Education Magazine, Volume 16, February 27, 2006 issue.

Hi$panic Women Exerting Economic Influence

By Marilyn Gilroy

Percentage Increase of US Female Population (CREDIT: HISPANIC OUTLOOK)

     "Hispanic women have emerged as one of the fastest-growing populations in the United States, exerting a powerful economic and cultural force across the country that is projected to increase dramatically." So says a recent market brief from HispanTelligence that presents a snapshot of the progress made by Hispanic women in business, education and overall standard of living. The data-rich report Hispanic Women in Profile 2005 offers a wide-ranging compilation of demographic and economic data and examines comparative trends.

Percentage of Hispanic Females Increasing

     Last year, Hispanics made up 14.1 percent of the total population, according to the U.S. Census Bureau. Hispanic females represent slightly less than half, 48.9 percent, of the total Hispanic population or about 20.5 million women. The distribution pattern for Hispanic females shows that the largest percentage lives in states such as New Mexico, California and Texas.

     While these statistics may not be surprising, the numbers to watch are those showing that Hispanic women make up a larger proportion of all women in younger age brackets. Specifically, they represent 21 percent of the age group under 5 years and that percentage continues through to age 39. As the report states, these figures have implications for both consumer and labor markets. Companies are scrambling to market products to this group, but the real significance is an underlying employment shift as younger Latinas join the work force in greater numbers while the overall U.S. population ages.

     "This is particularly notable in light of the aging of the U.S. population and the inversion of the population triangle," states the report. "Hispanics are making an increasingly large contribution to the number of workers supporting those near retirement."

     By 2050, Hispanics are expected to comprise nearly one-quarter of U.S. women, reaching 51 million. Many of these women will enter the labor force and by the middle of the century, the number of White workers will decrease and more Hispanics will be contributing to Social Security taxes.

Entrepreneurs Everywhere

Hispanic Women-Owned Business, 1997 vs. 2004 (CREDIT: HISPANIC OUTLOOK)

     One of the most significant findings described in the HispanTelligence report concerns the number of firms owned by Hispanic women, which increased by 63.9 percent between 1997 and 2004. The number has passed the half-million mark with 553,618 Hispanic women-owned businesses in 2004.

     Taking the plunge into entrepreneurship is motivated by several factors. According to Andrea Lehman, business economist at Hispanic Business Inc., and one of the authors of the report, Hispanic women see self-employment as a way of meeting personal and professional goals.

     "Many Hispanics face language barriers in the workplace if they are not fluent in English and, on average, their educational attainment levels are lower, thus making them less competitive in the job market," said Lehman. "In addition, Hispanics tend to have larger families.

     "For Hispanic women especially, starting their own business is a way around some of the obstacles they may face in the traditional labor market as well as allowing them more scheduling flexibility, which can be so important in balancing work and family."

     Another incentive is money. According to the U.S. Census, White women in the work force earn 77 cents for every dollar earned by White men but Hispanic women earn only 53 cents. The median income figures have improved but they are hardly encouraging.

     "From 1979 to 2002, Hispanic women realized a 10-percent gain in real earnings, increasing median annual earnings from $18,720 to $20,592," said Lehman. "The wage gap, the difference in earnings between men and women, is smaller among Hispanics than Whites, with Hispanic women earning 88 percent of Hispanic men's wages."

     Many Hispanic women think they have nothing to lose and everything to gain by starting their own businesses. The largest growth in Hispanic entrepreneurs has been in the areas of transportation, communications and public utilities. For example, in the category of transportation, there's Leticia Inc., a company in Hillside, N.J., owned by Leticia Rojas. Its primary business is waste-hauling services. Founded in 1994, it now has 20 employees and revenues of more than $12 million. Rojas learned the business from her father, Ramon, who emigrated to Newark, N.J., from Cuba in 1959 and became a subcontractor in the trucking business.

     As a young adult, Leticia Rojas did not intend to start her own business. She went to law school, graduated in 1991 and joined a large law firm. After a few years, she found the long hours and demands of the legal lifestyle were taking too much of a toll. When her father had a near fatal trucking accident in 1994 and was forced to retire, Rojas decided to buy his trucks, hire a network of drivers and start her refuse removal business. And although she sometimes has to work 100-hour weeks to stay on top of things, she doesn't mind because, as she explains, "Leticia Inc. is 100 percent mine."

     "It makes all the difference in the world when the company is 'your baby,'" she said. Rojas currently is expanding into the real estate development business and has just received approval to build a 100-unit condominium project in Elizabeth, N.J.

     And then there is Tina Cordova, president and CEO of Queston Construction Inc. in Albuquerque. She was a waitress and restaurant manager before she started a company in 1990 using her $5,000 savings. She learned the business by working as a laborer on construction sites with a friend who became her partner when they bought a small roofing company. At first, she ran the business from home and hired two carpenters. She struggled to get financing but eventually expanded and took on remodeling projects. Cordova was one of the first women in New Mexico to earn a contractor's license. Today, Queston employs 28 workers and, although the company still does residential work, it has been very successful in securing business from government contracts. Last year, the company had $25 million in revenue.

     The HispanTelligence market brief notes that Hispanic females have ownership in a number of communications and information systems firms, such as those that provide cell phone, VOIP or information systems, and public utilities that provide electricity or service infrastructure.

     No matter what type of businesses Hispanic women start, it is clear they are having an increasing impact on the U.S. economy. The U.S. Hispanic Chamber of Commerce says that Hispanic entrepreneurs are "no longer on the fringes and are an important part of what makes prosperity happen across the spectrum of American industry and commerce."

Educational Attainment Improves

     Hispanic women are surpassing Hispanic men in several categories of educational attainment. Last year, Hispanic women earned 60 percent of all bachelor's degrees awarded to Hispanics. The progress in this area has been rapid. While the number of bachelor's degrees conferred on U.S. residents increased 35 percent from 1976 to 2004, the number of bachelor's degrees earned by Hispanic women rose 430 percent. They also are more likely to graduate from high school than Hispanic men but they still trail White women at all education levels. The largest discrepancy is among those with no high school degree, a group that includes 42 percent of Hispanic women but only 11.1 percent of White women. Native-born Hispanic women have higher educational attainment and average earnings than do foreign-born Hispanics.

     Several organizations that have studied the problem say immigrant teens contribute disproportionately to the overall number of the nation's dropouts, a term that is defined as the number of school-aged teens not enrolled in school.

     Deborah Reed, an economist at the Public Policy Institute of California (PPIC), has co-authored studies on the education of immigrant youths.

     "The evidence shows that many of the Hispanic immigrants who arrived in the United States in recent years in their middle-to-late teens bypassed school to get jobs," said Reed. Parenting rates among young, late-arriving (older than age 10) Hispanic females are high, with nearly half of them living with their own children by the time they are age 19 to 24. The PPIC study titled Women, Work and Family in California shows that foreign-born Hispanic women have the lowest work participation rates due to the fact that they have more children on average and lower levels of education.

     If Hispanic women stay in school and go on to college, the payoff is evident, with college-educated, earning about the same as White women.

     While only 2.9 percent of Hispanic women have advanced degrees, the ones that do have higher average annual earnings ($58,623) than all women with advanced degrees ($50,756).

Standard of Living Progress Is Mixed

Median Income by Level of Education and Race (CREDIT: HISPANIC OUTLOOK)

     The good news overall is that there are improved prospects for Hispanic women, especially among those who are native-born and college-educated. Hispanic women have been making gains in the corporate world, surpassing Hispanic men in proportion in professional or managerial positions (21.4 percent vs. 14 percent of the work force, respectively).

     However, a much higher percentage of foreign-born Latin American women live below the poverty level than do U.S. Hispanic women as a whole. Among the foreign-born, 24.6 percent live in poverty as compared with just 10 percent of the larger group of Hispanic females. As the HispanTelligence report indicates, this is likely due to less lucrative employment opportunities for the foreign born as a result of educational and language barriers.

     In some categories, such as employment rates, differences are narrowing between Hispanics and national averages. Hispanic workers enjoyed significant gains in employment in 2004 and are a primary force of change in the labor market. The Bureau of Labor Statistics and the Census Bureau stated that nearly one million jobs went to foreign-born Latinos, leading to a decline in the Hispanic unemployment rate.

     Hispanic women have a higher rate of unemployment than Hispanic men; 75 percent versus 6.3 percent. Despite gains in employment, the downside is that many of the new jobs were in low-skill occupations calling for little more than a high school education and paying relatively low wages.

     In a similar good news/bad news scenario, more Hispanic women are moving into the middle class, but those shifts have been offset by larger increases in the number of Hispanics living below the poverty level. Some experts suggest that the situation will begin to "self-correct" as Hispanics gain more access to education and home ownership. They point out that Hispanics are relatively young, not as highly educated and concentrated in high-cost regions, such as New York and California, where home ownership often is less attainable for immigrants.

     "The wealth gap should shrink as the Latino population ages and acquires greater education, especially college degrees," said Roberto Suro, director of the Pew Hispanic Center. "The Hispanic population is also starting to penetrate into new settlement areas, such as Raleigh, Omaha and Nashville, and this trend may help more Latino households become homeowners."

     Overall, the 2005 HispanTelligence market brief agrees that there is reason to be optimistic about the future of Hispanic women. It concludes with an upbeat outlook and predicts that Hispanic women will have an "increasing impact on the face of the U.S. economy that cannot be ignored--especially in entrepreneurial and small-business ventures."