Friday, August 5, 2011

Hispanic wealth off a cliff

Princeton's Doug Massey opines about the reasons underlying the 66% decline in Hispanic households' wealth (as measured in the SIPP), compared with 53% for blacks and 16% for whites reported by the Pew Hispanic Center in The Toll of the Great Recession.

Massey argues that stepped-up enforcement of immigration laws probably kept a sizable number of undocumented Hispanic immigrants from leaving the U.S. and caught in a underworld with reduced options for legal recourse. Hispanic homeowners may have been particularly susceptible to predatory lending if they were undocumented. He also mentions that many Hispanics had construction jobs, which have taken a huge hit during the recession.

I'm a little skeptical whether legal status really explains that much of the statistic. If all 12 million undocumented immigrants were Hispanic, they'd represent about one quarter of the roughly 50 million Hispanics in the U.S. Assuming the SIPP captures undocumented immigrants (researchers seem to think they're underrepresented in the panel but still there), I think the experiences of legal Hispanics must be responsible for a substantial amount of the reported results.

It's very plausible that tendencies to hold wealth in the form of housing rather than financial investments might be cultural; it's also possible that the lower average socioeconomic status of Hispanics might explain some. And lower SES surely correlates with employment in heavily hit industries such as construction.

Viewed this way, I'm not sure the Toll of the Great Recession is a good argument for immigration reform, but I think there are others.